Donna Nelson, chairwoman of the Public Utility Commission of Texas, told Texas Tech law students the U.S. Environmental Protection Agency’s proposed Clean Power Plan is really a carbon tax.
The EPA recognizes it doesn’t have the authority to pass such a tax, Nelson told students in the energy law lecture series at the Texas Tech University School of Law. So the EPA is trying to get states to come up with ideas to make it workable.
Nelson said the Clean Power Plan seeks to force power companies to use more renewable energy, like wind and solar, and fewer fossil fuels, like coal. She said this is a problem because wind and solar energy are inconsistent, and fossil fuels are needed to power the grid during times the wind dies down or the sun isn’t shining.
If the plan is put into place, Nelson said much of the state’s coal capacity will be retired, causing unreliable service.
Last year in Texas, Nelson said the state got 41.1 percent of its energy from natural gas, 36 percent from coal, 11.5 percent from nuclear, 10.6 percent from wind and 0.8 percent from hydro, biomass, solar and other sources.
“Texas has more installed wind capacity than any other state in the United States,” Nelson said.
She cited the Electric Reliability Council of Texas, or ERCOT, which operates the electric grid and manages the deregulated market for 75 percent of the state. ERCOT, Nelson said, must match supply and demand at all times.
“If they fail to match supply and demand at every moment and time, the grid goes down,” Nelson said. “They have to maintain that. When wind goes down unexpectedly, what happens is, natural gas fills in.”
The proposed Clean Power Plan has a disproportionate effect on Texas, Nelson said. Its addition of 3,600 miles of transmission lines at a cost of $7 billion since 2005 to get electricity from wind farms to load centers near more populated areas are ignored under the plan, she said.
“On top of that, they said, ‘OK, you guys really know how to do this, so we’re going to make you have 150 percent increase in your renewable resources,’ ” Nelson said.
Texas will be required to reduce coal emissions by 51.91 percent, greater than the next nine coal generators combined, she said, and to increase renewable capacity by 153 percent, greater than 29 other states combined.
Increasing renewable resources by the required 153 percent would mean that Texas would have more renewable resources on the grid than state usage in the spring and fall, Nelson said.
The cost of this to the state will be an increase of $10-18 per megawatt hour by 2030, Nelson said, citing a group called The Brattle Group. BUt she said she believes the increase will be closer to $35 per megawatt hour.
Nelson was asked to speak at Tech as part of the School of Law’s energy law lecture series. Nelson is a 1986 graduate of the Texas Tech School of Law and was appointed to the Public Utility Commission by then-Gov. Rick Perry. She has been the chairwoman since 2011.
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