Taking a cue from the Legislature, the Public Utility Commission of Texas has dropped a proposal that would have mandated that electricity generators buy renewable energy other than wind.
The three-member state commission in December published a proposal to require that generators get 500 megawatts, or about 2 percent of all the electricity generated in the state, from a renewable source other than wind.
Friday is the deadline to act on that proposal, but it is not included on the commission’s agenda, dealing a setback to solar, geothermal and other renewable energy sources.
“I was hoping and expecting that they would act on this long overdue rule,” said Cyrus Reed, the conservation director for the Lone Star Chapter of the Sierra Club. “They’ve lost an opportunity to jump-start this market.”
The 500-megawatt renewable energy target has been on the books since 2005, but there has been a dispute about whether the Legislature intended for it to be a mandate or just a goal.
In December, the state commission published the proposal, and it held public hearings during the spring, but always with an eye toward the Legislature.
“It’s worth teeing up,” PUC Chairman Barry Smitherman said at the time.
But Smitherman and Commissioner Ken Anderson talked of the need to have a diversified portfolio of generating fuels while expressing concerns about the price of renewable energy in a world of low natural gas prices.
“I am cautious,” Smitherman said. “It’s impossible to predict commodity prices.”
Commissioner Donna L. Nelson said she didn’t think the PUC had the authority to adopt a mandate.
“If we don’t have the authority, we should just wait and see what the Legislature does,” she said at that December hearing. “Just publishing (the rule) sends the impression we are moving forward.”
Texas adopted a renewable energy target for electric utilities in 1999, but wind has dominated the renewable sector because of its lower price and earlier start in the market.
This year the Legislature did not mandate the nonwind renewable energy target because some lawmakers feared it would increase electricity bills. A 500-megawatt mandate, echoing the PUC proposal, never cleared a House committee.
John Fainter, president of the Association of Electric Companies of Texas, said the PUC’s reaction is to be expected.
“It doesn’t surprise me that it is not on their agenda, given the Legislature’s attitude on renewable energy this session,” Fainter said.
He said his members’ enthusiasm for mandating more renewable energy as a generating fuel varies, depending on each utility’s investments in its fuel mix.
Russell Smith, executive director of the Texas Renewable Energy Association, said advocates would not give up. He said the PUC could always restart the rule-making process.
“There’s not an end to this issue,” he said.
“In a time of economic stress, it’s easy to say anything that might result in a slight increase in cost is not desirable,” Smith said. “But there’s a long-term economic benefit from renewable energy.”