Texas Public Utility Commission chairwoman Donna Nelson thinks wind farms might not be paying their fair share.
In a memo to the commission Thursday, Nelson said the federal tax credit for wind power was distorting the power market. She said that could potentially push base-load generation like coal and nuclear off the grid. And she ordered an examination of the costs to maintain and upgrade the power grid for wind farms and other renewable sources.
“While this commission has no ability to change what Congress does, we do have an obligation to Texans to periodically review whether our rules appropriately assign cost to those who cause those costs,” she wrote.
Wind power generation has increased by more than 1,000 percent over the last decade. Analysts widely agree the boom has pushed down power prices. Wind farms have at times even paid retailers to take their power to take advantage of the federal tax credit.
Last year, Texas completed a $7 billion ratepayer-funded project to build transmission lines connecting wind farms in West Texas and the Panhandle to the state’s urban centers to the east.
The new capacity, and the potential expiration of the federal tax credit, spurred a flood of projects late last year. The projects represent a 60 percent increase over existing capacity. But it is unclear how many will be built.
In her memo, Nelson said the influx of new power generation could weaken the grid and would require further construction.
“These potential grid stability issues raise fundamental policy questions. For example, should we ask electric customers to fund further investment in the transmission system to improve stability or should some of the risk be borne by generators?” she wrote.
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