Wind in West Texas blows hardest at night, sending the turbines that dot the landscape into a blurry spin. Electricity floods the grid. Power prices are cut in half, bedeviling rival power companies.
The insurgence of wind farms onto Texas’ power grid has pitted coal against wind, nuclear against solar. But recent efforts in Austin to rein in the renewable power sector have brought unexpected protest from the larger power industry.
The Texas Public Utility Commission is looking at whether to charge wind and solar farms higher transmission fees than fossil fuel plants. The premise is that renewable power is variable by nature, requiring more backup than coal-fired or natural gas-fired plants.
But companies including Exelon and Luminant are opposing any effort to shift the cost of new transmission lines from the wider customer base to individual operators. In memorandums filed with the PUC, industry attorneys question the fairness of such a move and urge the agency to back off.
The reaction has caught renewable energy advocates by surprise. They had presumed Texas power generators were behind the recent move to raise costs on renewables in Austin, said Charlie Hemmeline, executive director of the Texas Solar Power Association.
“Once the PUC laid out some specifics and the generators looked at how they would be assigning costs, it seems like their take was, ‘We don’t know where it’s going to go,’” Hemmeline said.
These are unsettled times for the renewable power industry in Texas.
Last month, Comptroller Susan Combs issued a report questioning the state’s recent $7 billion project to connect wind and solar farms in the west to cities to the east. And she urged lawmakers in Washington to end the federal tax credit that helps finance new wind farms.
“It’s time for wind to stand on its own two feet,” Combs said in a statement. “Billions of dollars of tax credits and property tax limitations on new generation helped grow the industry. But today they give it an unfair market advantage over other power sources.”
Renewable-power developers have had a charmed few years in Texas. Wind’s footprint has doubled since 2008. Last year wind-generated electricity accounted for 10 percent of the power sold on the grid, according to federal data. And large-scale solar farms, as seen in California, are starting to be built in Texas.
The criticism from Austin has inflamed the still young renewable industry. Jeff Clark, executive director of the Wind Coalition, an industry group, has been firing off statements over the comptroller’s report. He accuses Combs of playing politics as she prepares to leave office later this year.
“There are and have always been individuals and industries that have a vested interest in wind not succeeding,” Clark said. “This [report] reads like the talking points of our detractors.”
The more immediate threat to the industry is the PUC. Chairwoman Donna Nelson has asked staff to look into what proportion of new transmission lines are built to accommodate renewable power.
Nelson declined to be interviewed. But in a May memo she said the flood of turbines was distorting the power market and threatened to shut down coal and natural gas plants.
“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?” Nelson wrote.
The slowing of wind development would be likely to benefit coal and nuclear plants that have seen their margins shrink in recent years.
But while the established power companies report wind does require expensive backup power, they are not willing to shift the rules of the market.
“Consumers are the beneficiaries of these purchases, because [backup power is] needed to maintain grid stability, and consumers benefit from such stability,” attorneys for Luminant wrote last month.
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