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renewable energy

We can make the end of coal in Texas happen

It’s already happening. It just needs a bit of a boost.

Texas might have the perfect environment to quit coal for good.

Texas is one of the only places—potentially in the world—where the natural patterns of wind and sun could produce power around the clock, according to new research from Rice University.

Scientists found that between wind energy from West Texas and the Gulf Coast, and solar energy across the state, Texas could meet a significant portion of its electricity demand from renewable power without extensive battery storage. The reason: These sources generate power at different times of day, meaning that coordinating them could replace production from coal-fired plants.

“There is no where else in the world better positioned to operate without coal than Texas is,” said Dan Cohan an associate professor of civil and environmental engineering at Rice University who co-authored the report with a student, Joanna Slusarewicz. “Wind and solar are easily capable of picking up the slack.”

[…]

Coal still generates about 25 percent of the state’s power, but its share is shrinking. Since 2007, coal used in generating electricity has decreased 36 percent. Last year, Vistra Energy of Dallas shut down three coal-fired plants in Texas, citing changing economics in the power industry that make it difficult for coal to compete.

Texas has more than 20,000 megawatts of installed wind capacity, which could rise to 38,000 megawatts by 2030, according to the U.S. Department of Energy.

Solar energy, however, has developed much more slowly in Texas, despite the abundance of sunshine. Texas installed about 2,500 megawatts of solar capacity in 2018.

The research article is here. Texas has done well generating wind energy, but needs to step it up with solar. The Lege could provide some incentives for this, so maybe mention to your State Rep the next time you call their office that this would be a productive thing to do.

The war on coal is over in Texas

Coal lost, and good riddance.

Wind power capacity edged out coal for the first time in the Texas history last week after a new 155-megawatt wind farm in Scurry County came online. The farm in question is the Fluvanna Wind Energy Project, located on some 32,000 acres leased from more than 130 landowners.

Fluvanna pushed total wind power capacity in the state to more than 20,000 megawatts, while coal capacity stands at 19,800 megawatts and is slated to fall to 14,700 megawatts by the end of 2018 thanks to planned coal powerplant closures. Next year, Luminant will shutter three coal-fired plants—Monticello, Sandow, and Big Brown—and San Antonio’s CPS Energy will close J.T. Deely Station. Wind capacity in the state will reach 24,400 megawatts by the end of 2018, according to projections from Joshua Rhodes, a research fellow at UT Austin’s Energy Institute.

But capacity is one thing, electricity generation is another. In the first ten months of 2017, wind generated 17.2 percent of power in the state, and coal 31.9 percent, according to ERCOT. But wind should soon see large gains there. “By our analysis, in 2019 we’ll have more energy from wind than coal,” Rhodes said.

Don’t anyone tell Donald Trump.

Getting the (wind and solar) power to the people

It’s all about the transmission lines.

The Lone Star state is by far the largest state for wind power, with nearly 18,000 megawatts of wind generation capacity already built and another 5,500 megawatts—nearly equal to California’s total installed capacity—planned. The biggest driver of that wind boom was an $8 billion transmission system that was built to bring electricity from the desolate western and northern parts of the state to the big cities of the south and east: Dallas, Austin, San Antonio, and Houston.

Completed in 2014, the new wires—known as Competitive Renewable Energy Zones, or CREZ—have the capacity to carry some 18,500 megawatts of wind power across the state. That’s not enough to handle the 21,000 megawatts of capacity Texas expects to reach this year, and it’s creating a situation that’s straining the transmission system and potentially resulting in periods where the turbines go idle.

Now the state’s utilities and transmission companies are faced with spending hundreds of millions more to upgrade the system, demonstrating just how costly and complicated it is to shift from fossil fuels to renewable sources of energy, even where those sources are abundant.

EDF Renewable Energy, which owns five wind farms in northern Texas, and other operators have proposed adding second lines to existing transmission lines from the panhandle, where much of the new wind-farm construction is happening. Doing so, EDF says, will accommodate nearly 4,000 megawatts of new generation expected in the panhandle over the next several years.

“If some of these projects get developed in the panhandle and they haven’t done the upgrades to the grid, for sure those farms will be curtailed,” says Frank Horak, the CEO of Austin-based energy consultancy Astek Energy.

[…]

Another looming challenge is an expected surge in solar projects in Texas. The state ranks third in terms of total solar capacity, and another 6,000 megawatts of solar projects are planned. That will further strain the grid.

“Last time I looked there were 42 solar projects in far West Texas that were in the interconnection queue waiting for new transmission because there’s a bottleneck there now,” says Horak. Most of those projects will remain on hold until new wires are in place; some may never be built.

Seems to me to be a supply and demand problem, with the supply of transmission not keeping up with the demand of energy production. Texas’ population continues to grow, and the grid is increasingly dependent on wind and solar power to meet usage peaks, so it would be very shortsighted not to keep investing in more transmission capacity. This ought to be a no-brainer.

Pity the poor utilities

Sorry, but low electricity prices, especially when they are aided by record amounts of wind power generation, are good news.

ERCOT

Texas’ national lead in cheap wind power, combined with near historically low natural gas prices, mild weather, an abundant power supply and slower growth in electricity demand, can work to the detriment of power companies.

The combination weighed down wholesale power prices last year to their lowest averages since 2002. And the effects are only becoming more dramatic in 2016, even creating bizarre instances when, in the abstract at least, providers are paying to put electricity on the market.

“It’s pretty dire,” said Michael Ferguson, associate director at Standard & Poor’s covering utilities and infrastructure. “It’s a bad situation for gas generators, but for coal generation, it’s even worse.”

Texas’ wholesale power prices averaged $26.77 per megawatt-hour last year, down nearly 35 percent from $40.64 per megawatt-hour in 2014. The cost was more than $70 as recently as 2008.

While now is a good time for consumers to lock in cheaper electricity prices, well more than 25 percent of the state’s power plants are operating at a cash loss, especially the older coal-fired plants, power executives and analysts estimated. That’s before more stringent federal emissions regulations go into effect in coming years

Until coal plants start shutting down or the state tweaks regulations to artificially inflate prices, power companies will struggle, executives said. A new Moody’s Investors Service report concluded that Texas “power prices are unlikely to climb out of their doldrums.”

Already, less than a quarter of Texas’ coal fleet is operating early this spring, as more generators simply take their coal plants offline until the summer heat brings more demand, analysts from Tudor, Pickering, Holt & Co. noted.

In March, wind added to the grid more than coal power for the first time ever for a full month. Wind contributed 21.4 percent of the grid’s overall power, compared with 12.9 percent from coal, which used to be the dominant source of the state’s electricity generation, according to the Electric Reliability Council of Texas, which manages about 90 percent of the state’s electricity load.

“Ultimately, something is going to have to give here,” said Thad Hill, president and CEO of Calpine Corp., the largest power generator in the Houston region and owner of the nation’s largest fleet of natural gas-fired power plants.

[…]

Texas is home to nearly 20 coal-fired power plants and the near future of at least six of them are considered at risk.

They will require expensive upgrades to meet federal standards, according to a recent ERCOT analysis, and the costs could outweigh the benefits of keeping them open. That’s not even counting the effects of the federal Clean Power Plan, which is pending in court.

“Ultimately, we think the market could be a lot tighter than people think, particularly if people start mothballing or retiring units,” said Hill, whose Calpine would stand to benefit because it doesn’t own any coal plants.

At-risk plants include Luminant’s Big Brown, Monticello and Martin Lake coal plants in East Texas, half of Luminant’s Sandow plant east of Austin, NRG Energy’s Limestone plant east of Waco, and Engie’s Coleto Creek plant near Victoria that’s being bought by Dynegy.

It’s fine by me if those coal plants go the way of the dodo. It’s long overdue, and their demise will make meeting the Clean Power Plan benchmarks even easier. More investment in solar energy will help mitigate the low-wind periods and ensure demand can be met in the summertime. What’s not to like?

No idling

From the inbox, from last week:

Mayor Annise Parker

Mayor Annise Parker

Mayor Annise Parker and Houston City Council today approved two significant ordinances that will improve Houston’s quality of life and protect public health: an anti-idling ordinance for motor vehicles with a gross vehicle weight rating of more than 14,000 pounds; and a commercial Property Assessed Clean Energy (PACE) program.

“Adopting these ordinances are more key milestones for my administration,” said Mayor Annise Parker. “While we are excited to join the ranks of other Texas cities that have also passed idling reduction policies, we are proud to be the first city in Texas that has adopted a commercial PACE program. We all have to work together in improving our air quality and quality of life.”

Idling Reduction:

Idling is one contributor to air quality issues in the region. Nitrogen oxides (NOx), volatile organic compounds (VOCs), and particulate matter (PM) are emitted from vehicle engine exhaust and can form ground-level ozone, or smog. Diesel engines emit hazardous air pollutants which have been linked to serious illnesses, including asthma, heart disease, chronic bronchitis, and cancer. Children, elderly, and those with asthma and other chronic health problems are especially vulnerable to the health dangers of exhaust.

Property Assessed Clean Energy (PACE):

PACE is financing that enables Houston owners of commercial, industrial and residential properties with five or more units to obtain low-cost, long-term loans for water conservation, energy-efficiency, and renewable retrofits.  In exchange for funds provided by a private lender to pay for the improvement, the property owner voluntarily requests that the local government place an assessment secured with a senior lien on the property until the assessment is paid in full.  The benefits of PACE are multi-faceted, leading to a win for all stakeholders.

“We applaud Mayor Annise Parker and Houston for passing landmark environmental legislation that improves our quality of life,” said Luke Metzger, Director of Environment Texas. “Commercial PACE will make it easier for building owners to reduce energy and water usage and the anti-idling ordinance will clean the air and protect the health of families. It’s a double win.”

“These two ordinances have the potential to make a big impact on air quality and quality of life in Houston,” said Adrian Shelley, Executive Director of Air Alliance Houston. “Reducing idling and conserving energy and water help protect public health, as well as save money. We appreciate Mayor Parker’s significant commitment to improving our environment.”

This ordinance follows numerous other air quality initiatives and programs including:

  • Investing in electric vehicles and hybrids and a fleet sharing program
  • Investigating emissions from metal recyclers
  • Retrofitting over 6 millions square feet of municipal buildings to improve energy efficiency
  • Purchasing 50% green power for city operations
  • Retrofitting 165,000 streetlights to LED technology
  • Expanding bike share and bike facilities across the city

The Chron has a bit more about the anti-idling ordinance.

The anti-idling ordinance prohibits drivers of vehicles with a gross weight of more than 14,000 pounds from idling for more than five minutes when the vehicle is not in motion.

The law, however, exempts vehicles being used by military, emergency or law enforcement personnel, vehicles in the process of being loaded or unloaded, cars sitting in traffic jams, people defrosting their windshields, and various vehicles that must run heat or air conditioning for health and safety reasons.

Transit vehicles carrying passengers can idle for up to 15 minutes to use the heat or air conditioning.

Good. As we know, Houston has longstanding air quality issues, and as federal clean air standards have tightened we have been in greater danger of not being in compliance. There isn’t one single thing that can be done to fix this problem, but there are a lot of little things that can be done to move us in the right direction. This is one of them. Kudos all around for getting it done.

Not everyone wants Texas to sue the EPA again

It won’t mean anything to those that are hell-bent on suing, but it is worth keeping in mind.

President Obama is set to unveil the nitty-gritty of his sweeping, state-by-state plan to fight climate change this week — his most determined effort yet to tackle the effects of global warming by reshaping the nation’s power sector.

When he does, no one doubts that Texas will sue.

Taking the federal government to court over environmental regulations has been a palpable source of pride and political capital for Gov. Greg Abbott, who filed dozens of lawsuits against the U.S. Environmental Protection Agency as attorney general. Both he and his successor, Ken Paxton, have promised the same approach with the so-called Clean Power Plan, which seeks to drastically cut carbon dioxide emissions from the nation’s power plants.

But some of those who will bear the brunt of complying with the new regulations are calling that knee-jerk reaction shortsighted.

Some Texas electric utilities are joining environmentalists in hoping policymakers — after securing another campaign trail talking point — eventually will craft a strategy to meet the new requirements to avoid being slapped with a mystery plan devised by the EPA and to bolster regulatory certainty.

“I think it’s always better for the state to participate in the plan rather than having the feds do the plan and tell you how it’s going to be,” said John Fainter, president and CEO of the Association of Electric Companies of Texas, referencing a similar situation in 2013 involving greenhouse gas permits. “So I hope when the litigation is concluded that there’s time and willingness to do so.”

[…]

Under a draft proposal outlined last year, Texas — home to about 20 operational coal-fired power plants — would have to slash roughly 200 billion pounds of carbon dioxide emissions in the next two decades. The state’s ultimate target will become known when the EPA unveils its final rule, expected as early as Monday.

The plan already has drawn one lawsuit from more than a dozen coal-friendly states. But a federal appeals court dismissed the challenge in June, concluding it was premature since the EPA had yet to finalize the rule.

While not part of that early lawsuit, the Texas attorney general’s office has spent $24,000 devising another that it has yet to file, according to information obtained by the Tribune under a public records request.

Initially, states were to submit plans by next summer detailing how they would reach compliance with the new standards by 2020. Word on the street, said Fainter, is that the EPA may give states extra time, responding to concerns from some utilities and states.

An EPA spokeswoman would not confirm or deny that change, but if true Fainter said it would make even less sense for Texas not to come up with a plan. Some utilities agree.

“If, in fact, the states are afforded more time to craft their (implementation plan), it seems logical that they would want to avail themselves of this time to develop a solution which addresses the individual and unique situation of each state,” said Brett Kerr, a spokesman and lobbyist for Calpine, the largest independent power producer in the nation.

Texas doesn’t “necessarily have to stand alone” and could team up with other states to craft a compliance plan if it makes the process smoother, Kerr said. “We believe that the state would be best served by participating in the process.”

See here, here, here, and here for the background. It would be nice to think that Texas could participate in the process rather than file another pointless lawsuit, but then it would also be nice to think I could eat pizza and ice cream every day while losing weight. Fish gotta swim, birds gotta fly, Texas AGs gotta file lawsuits against the public interest. It’s the way of the world. The plan has now been released, so cry havoc and let slip the lawyers of war. We’ll know in a couple of years if this is going anywhere or not.

Texas sues the EPA again (and again, and again, and…)

Stop me if you’ve heard this one before.

Attorney General Ken Paxton on Wednesday filed a lawsuit over the agency’s rejection of parts of a Texas clean air program, launching the state’s second battle against EPA regulations in less than two weeks.

Texas has sued the agency 21 times since President Obama took office in 2009.

This challenge centers on how Texas handles pollution that spews from industrial plants during facility startups, shutdowns and equipment malfunctions.

Historically, regulators exempt pollution from those events from overall limits, letting plants to emit more than their federal permits allow. But environmental groups have protested this policy, claiming it has let plants discharge millions of extra pounds of dangerous air pollutants each year.

A federal appeals court in April 2014 found some of the environmental groups’ points valid, prompting the EPA in May to require Texas and 35 other states to revisit how they deal with such events.

The new state plans are due in November 2016.

But Paxton said that because the EPA had approved Texas’ plans in 2010, before the environmental challenge, the agency’s latest directive amounted to “an abrupt and unwarranted about-face.”

Whatever. I guess Paxton has to get all those lawsuits in quickly, before defending his own butt becomes his main job in life. As the story notes, Texas was one of several states to file suit over the EPA’s Clean Water Plan, and there will be another suit coming next month when the EPA’s Clean Power Plan rules get released. Too bad all this litigation isn’t an economic catalyst, we could use a little help on that front.

ERCOT acknowledges that meeting EPA clean air requirements won’t be that big a deal

From Texas Clean Air Matters:

ERCOT

Well, it didn’t take long before the Electric Reliability Council of Texas (ERCOT) released, at the request of Texas’ very political Public Utilities Commission, another report about the impacts of the Environmental Protection Agency’s (EPA’s) rules designed to protect public health.

This time ERCOT, which manages 90 percent of Texas’ electric grid, looked at the impact of seven EPA clean air safeguards on the electric grid, including the Cross State Air Pollution Rule (CSAPR), the Mercury Air Toxics Standard (MATS), the Regional Haze program (all of which go back before the Obama administration), the proposed Clean Power Plan, which would set the first-ever national limits on carbon pollution from existing power plants, and others. What was surprising to learn, though, is that after power companies in the state start complying with EPA’s other clean air protections, the proposed Clean Power Plan poses a minimal incremental impact to the power grid. We would only have to cut 200 megawatts of coal-fired generation, which equates to less than one coal-fired power plant.

For as much doom-and-gloom we heard last month in ERCOT’s report about the Clean Power Plan, they certainly seem to be singing a different tune this go-around. The new report shows that Texas can go a long way toward complying with the Clean Power Plan by meeting other clean air safeguards, for which Texas power companies have had years to prepare.

Very soon power companies in Texas will install control technologies to reduce multiple – not just one – pollutants, thereby making compliance with EPA’s subsequent regulations easier and more cost-effective. In the end, Texas will only need to take a minimal amount of additional aging coal plants offline by 2029.

Plus, other energy resources, like energy efficiency, rooftop solar, and demand response (which pays people to conserve energy when the electric grid is stressed) are gaining ground every day in Texas. They have proven to be vital resources on the power grid that help reduce electricity costs for Texas homes and businesses.

Energy efficiency, in particular, provides significant reductions in power plant emissions, including carbon dioxide, sulfur dioxide, and ozone-forming pollutants, and has a four-to-one payback on investment. This is the type of performance worth investing in.

See here for the background, and click over to read the rest. In addition to what the EDF says above, complying with the new regulations would also save a ton of water, which is a pretty big deal in and of itself. So let’s have less whining – and fewer lawsuits – and get on with the compliance. It’s a win all around.

EPA climate change plan would save water

Well, what do you know?

ERCOT

As state regulators fret about how President Obama’s effort to combat climate change would affect the Texas power grid, a new study says the rules would be simpler to adopt than those regulators suggest – and that it would save the state billions of gallons of water annually.

In an analysis released Wednesday, CNA Corporation, a nonprofit research group based in Arlington, Va., said the federal proposal – which requires states to shift from coal power to cut carbon emissions – would slash water use in the Texas power sector by 21 percent. That would save the drought-ridden state more than 28 billion gallons of water each year.

“It’s a surprising finding,” Paul Faeth, the report’s author, said in a statement. “People don’t often associate water conservation with [carbon] cuts, but for Texas, they work together.”

[…]

CNA Corporation’s analysis comes two days after the Electric Reliability Council of Texas (ERCOT), the state’s grid operator, said the proposal would threaten reliability and raise energy costs by as much as 20 percent by 2020 – not including the cost of new power lines needed to keep the grid running.

The CNA report, which relied on a model ERCOT has used in the past, said shifting away from water-guzzling coal power plants and boosting energy efficiency would ease Texas’ water woes.

Compared to Texas’ grid operator, CNA painted a rosier picture of price and reliability effects. With big investments in natural gas and wind power, Texas is already on pace to meet 70 percent of its target by 2029, according to the study. Improving energy efficiency could move the state the rest of the way.

The federal proposal would increase the per-megawatt cost of electricity by 5 percent by 2029, but cut total system costs by 2 percent, the group said.

“We find that the state will be able to meet the final and interim targets with modest incremental effort,” the study said.

See here for the background. The CNA report page is here, the press release is here, the executive summary is here, and the full report is here. It’s not clear to me if CNA was invited by someone to review the EPA plan as it affects Texas or if they did it on their own, but this is a strong argument for going along with what the EPA recommends rather than filing another frivolous lawsuit. The considerable water savings is enough by itself to make this worthwhile.

It’s OK if energy costs go up for now

That’s my reaction to this.

ERCOT

As Texas regulators weigh a response to President Obama’s proposal to combat climate change, the operator of the state’s main electric grid says the plan would raise energy costs and threaten reliability – particularly in the next few years.

In an analysis released Monday, the Electric Reliability Council of Texas (ERCOT) said the plan — which requires states to shift from coal-power to cut carbon emissions — would significantly increase power prices in the next few years. But those extra costs would fall in the next decades as Texans reaped long-term savings from investments in solar power and energy efficiency. 

Under the federal proposal, Texas would need to slash carbon emissions from its power plants by as much as 195 billion pounds of carbon dioxide in the next 18 years, according to a Texas Tribune analysis. That 43 percent reduction is among the larger percentage of cuts required among states.

The EPA suggests that Texas could meet its goal though a combination of actions: making coal plants more efficient, switching to cleaner-burning natural gas, adding more renewable resources and bolstering energy efficiency. Texas would have until 2016 to submit a plan to meet its carbon target.

The ERCOT analysis comes as Texas regulators prepare to file formal comments to the EPA ahead of the Dec. 1 public comment deadline.

[…]

“Given what we see today, the risk of rotating outages increases,” Warren Lasher, director of system planning at ERCOT, said Monday in a media call.

The changes would hit coal-dependent communities around Dallas and Houston particularly hard, Lasher said. Those areas would quickly need new power lines to connect with new power sources. That could prove costly. For instance, officials project a major transmission project for the Houston area to total $590 million.

“All of those costs could ultimately be born by consumers in the power bills,” Lasher said.

And I’m okay with that. The costs would be borne in the short run and would likely lead to lower costs as more renewable sources came online and became part of the statewide grid. As the Rivard Report reminds us, there’s a lot of that happening already. The pollution reduction benefit from the EPA’s directive would be substantial as well. If ERCOT is trying to scare me, it’s not working. I’m sure the EPA would be willing to be flexible with Texas on the schedule if Texas negotiates in good faith and demonstrates a real commitment to meeting the stated goals. Or Texas can sue and lose and get no help in getting this implemented as smoothly as possible. Seems like a pretty easy choice to me. Texas Clean Air Matters has more.

Google energy

Fascinating.

Google may not seem like an energy company, but it sure is acting like one.

Through more than $1 billion in investments and through large contracts for renewable power, Google has become the most significant player in the energy business outside of actual energy companies and financial institutions.

The Internet search giant’s efforts to transform the world’s use of power and fossil fuels have included a $200 million investment in a Texas wind farm and the purchase of a company that makes innovative flying wind turbines. It has invested $168 million in a solar project in California and is funding the development of an offshore grid to support wind turbines off the Atlantic coast.

In total, it has an ownership stake in more than 2 gigawatts of power generation capacity, the equivalent of Hoover Dam, said Rick Needham, Google’s director of energy and sustainability.

Google even has a subsidiary, Google Energy, that’s authorized by the Federal Energy Regulatory Commission to sell wholesale electricity that it generates from its power assets.

Analysts say it is the only company other than energy businesses and financial institutions that has taken large ownership stakes in major stand-alone power projects.

Read the whole thing – try this FuelFix link if the houstonchronicle.com one is not available to you – it’s quite a story. It’s great to see an innovator and big investor like Google pushing renewable energy for business reasons as well as altruistic ones. I hope a lot of other companies follow their lead.

West Texas wind

The wind energy business in Texas is going strong.

BP and other energy companies are funneling millions of dollars into building and operating wind farms in West Texas, helping to transform the oil country into one of the nation’s leading hubs for green energy production.

Skylines dominated by nodding pump jacks increasingly are spotted with spinning turbines. Economies tied to the ebb and flow of commodity prices are finding stability in supplying the power grid.

“We’ve been through lots of booms and busts with the oil and gas industry. The oil and gas areas deplete over time,” said Doug May, economic development director for Pecos County.

“The wind resource here is sustainable. We look at these wind farms as a long-term investment in the future of Pecos County.”

Recent energy analyses predict renewable fuels — including wind, solar and biofuels — will be the world’s fastest-growing energy source in coming decades. BP’s own outlook predicts the country’s renewable energy production will surge 252 percent over the next 20 years.

Wind and solar energy are potentially huge boons to West Texas, which is the perfect location in many ways for harvesting both kinds. There’s already a lot of investment out there, and more is to come. There are some obstacles, however.

West Texas wind farms are at the end of the state’s main electrical grid, managed by the Electric Reliability Council of Texas, or ERCOT. The Public Utility Commission of Texas has been working on plans to build a more robust network of power lines to bring more wind-generated power to major cities.

But those lines are still two years and nearly $7 billion away.

Meanwhile, the federal tax credit that gives wind power generators 2.2 cents for every kilowatt-hour of energy produced is slated to expire at year’s end unless lawmakers approve a renewal.

“If Congress chooses not to renew, there is no hope for the wind industry next year,” [John] Graham, the BP executive, said of the tax credit. “Without it, U.S. wind projects aren’t viable.”

BP has joined the pack of wind executives fighting to keep the production tax credit for renewable energy. Graham said he has traveled to Washington five times since October.

You’d think giving an energy company a tax break would come as naturally to Congress as breathing, but that renewable energy credit was a casualty of the payroll tax cut deal. It could be revived, and again, it’s hard to imagine a world in which energy executives have to go begging for bones from Congress. The ERCOT issue has been in the works for four years already. That will be a big deal when it’s done.

“How to Choose a Texas Electric Provider the Wrong Way”

Recently, my friend Dan Wallach wrote a guest post here about how to find the best deal on electricity in Texas. Robert Nagle, another friend of mine, took issue with some of the things Dan wrote and penned a response on his blog, called How to Choose a Texas Electric Provider the Wrong Way. A brief excerpt:

I am amazed at how easy it is to make a bad decision about electric providers.  A college friend with a PhD in Economics chose an expensive coal-laden TXU plan because he had just moved back to Texas and wasn’t aware that you had the ability to choose your provider – he just went with whatever someone told him about. (In two minutes, I was able to find him a plan which was 10% cheaper and 100% green).  Various acquaintances have chosen plans for the most illogical of reasons. One chose “Reliant” because it sounded “reliable” (Reliant-reliable – get it? I guess getting your name on the downtown stadium was good for something).  Another signed up for the coal-dirty Reliant because it had balanced-billing – never mind that it was significantly more expensive than the other plans. A friend chose a plan simply because a friend of hers had recommended it – that was also more expensive. Another friend opted not to choose the “renewable” plan because she didn’t want to have to renew it each time the fixed rate expired.  There are other not-so-obvious problems. When I had Dynawatt (a company I don’t recommend) I could not make head or tail of the bill (no matter how long I studied it). Everything on the printed bill contradicted what the terms of my contract were, and when I called telephone support several times, each agent quoted me a different rate on my current plan – something which didn’t exactly inspire confidence.

4 Things You Need to Know about Choosing an Electric Provider in Texas

This blogpost is going to ramble a bit, so I’ll summarize for people who are in a hurry and need some fast tips.

  1. Texas consumes more fossil fuels than any other state in the US. If Texas were a nation, it would be the 7th largest emitter of greenhouse gases. Electric plants in Texas (population 25 million) emit as much CO2 as electric plants in the COMBINED states of New York, California, Florida, Massachusetts and Oregon (population: 86 million)
  2. 1 year Fixed-rate plans for 100% green (renewable) energy plans are on average 5-10% higher than comparable coal/natural gas plans.
  3. Don’t choose an electric provider which has received too many complaints. (Check thecomplaint scorecards on the PUC site and also Yelp if you want).

You’ll need to click over and read the whole thing for the fourth point. My thanks to Robert for sharing his expertise.

On getting the best deal with variable electric rates

Note: The following was written by my friend Dan Wallach, who thought I might be interested in sharing it here. He was right. My thanks to Dan for putting this together.

Everybody in Houston has the ability to select any one of hundreds of different electrical pricing plans from a variety of vendors. If you visit the PowerToChoose.com web site, you can see all the different rates listed. Some are “variable” rate, with the lowest currently advertised at 5.3 cents/kWh. Others let you lock in a fixed rate for some period of time (the cheapest currently listed is 8.3 cents/kWh for a six month term). A few plans are “indexed” (meaning they track the spot price of natural gas), with the cheapest currently going for 10.7 cents/kWh. On top of all these different plan styles, there is also a significant variation in the “percentage of renewable content” from one plan to another, as well as variation in various freebies and incentives.

I wanted to keep it simple. Just give me the lowest price, please. I initially signed up with Amigo Energy, who in 2008 offered me something like 7.5 cents/kWh without requiring me to make any kind of deposit. At the time, they were one of the cheapest vendors around. That sounded great, and they even gave me free tickets at one point to a Houston Dynamo playoff game. Thanks! I didn’t really pay much attention to my electrical prices again until I noticed a recent bill was over 13 cents/kWh, earlier this summer, when the extreme heat was giving me some extreme electrical bills. I called them up and they said that they had discontinued the program I signed up for, so they unilaterally decided to raise my price to a much higher number. Oh, and would I like to switch to another plan? Lovely.

Lesson 1: “Variable rates” aren’t connected to much of anything beyond the whims of the executives who set these rates. If you read the legal verbiage closely, they can change your rate, at any time, to any price they want.

I want the lowest rate I can get. PowerToChoose.com listed several vendors offering 5.5 (give or take) cents/kWh, including one company I’d actually heard of before: Reliant Energy. Several of the vendors explicitly say that their cheap rate is “introductory” and you’ll be switched to the regular rate after one month. Reliant, however, makes no such caveat, at least not that was immediately obvious, so earlier this summer I dumped Amigo and went with Reliant. My first month was cheap. The bill that just arrived, however, averages to 7.5 cents/kWh (including taxes) on 2061 kWh of charges. That’s a $155.39 bill, which is still reasonable in the grand scheme of things for an August in Houston, but it wasn’t the $113.36 that I would have paid at my original rate, either. Oh, and if I call up Reliant on the phone to complain, the contract seems to say that they can charge me $5.95 to speak to a human being. No thanks.

Lesson 2: See lesson 1.

Challenge: how can I consistently pay these low advertised rates? Do I have to switch companies every month? As it turns out, every one of these companies is required to publish an “electrical facts label,” and those tend to include a pointer to a web page with their historical prices. The table below has the actual rates that I’ve been able to glean from these web sites. This was far more difficult to put together than it should have been. (Notes: all of this data was compiled on September 11 from PowerToChoose.com and the various vendors’ web sites. All prices are based on monthly rates at 1000 kWh usage and include CenterPoint delivery charges. If you’re outside of Houston and don’t have CenterPoint, your rates will be different. If you use less than 1000 kWh, many vendors tack on a surcharge that increases your effective electrical rate.)

Company / Product Initial Advertised Rate (at 1000 kWh / month) Historical Rates (at 1000 kWh / month)
First Choice Power (“First Choice Web Advantage Flex”) 5.3¢ No historical rates are on their web site for this specific product. Other products are much more expensive (all greater than 13¢).
Reliant Energy (“Basic Power Flex Plan”) 5.4¢ 8.2 – 10.0¢
Pennywise Power (“Wise Buy Monthly”) 5.4¢ 6.3 – 7.2¢
StarTex Power (“Promotional Month to Month”) 5.5¢ 11.3 – 13.8¢
Bounce Energy (“Thrifty Saver Promotional”) 5.5¢ 11.2 – 13.9¢, but with various promotions, coupons, etc.
Mega Man LP (“Mega Man Savings Plan”) 5.5¢ 11.8 – 12.5¢
Veteran Energy (“Freedom Month to Month”) 5.9¢ 12-13¢
Frontier Utilities (“Winter 11 Special Online Intro”) 6.4¢ 7.8-8.3¢ (only two historical prices are present, so this isn’t very meaningful)
APNA Energy (“Promotional Newcomer Variable”) 7.3¢ 12.3-13.1¢

Beyond this, prices jump two cents or so and we’re starting to see the various “renewable” energy products. What’s actually going on when you sign up for one of these plans is, at best, unclear. The electrons being pumped into your house are coming from the same power plants over the same grid, no matter who you’re actually paying for your service. (Hint: very few of the companies listed above actually own real electric plants. They buy power wholesale and sell it to you at retail.) What you are really doing, when you buy “renewable” power, is buying the same power as anybody else, plus you’re buying “renewable energy credits” (RECs). There’s a whole secondary market for RECs, which the “renewable” power generators sell and which you’re indirectly buying. In theory, this incentivizes power companies to increase their “renewable” capacity so they can capture those extra dollars themselves. In practice? There’s a very good 2009 study on the REC market. At one point, REC prices went negative! Suffice to say that the REC market is a work in progress.

If your goal is to reduce carbon emissions, you could buy “renewable” power, which might eventually do something, or you could invest in making your house more energy efficient, which does something right now. I’m going with plan B (“ask me about overpriced LED lighting!”), but you’re welcome to choose plan A if you want. So what do you pay for “100% renewable” power at variable prices?

Company / Product Initial Advertised Rate (at 1000 kWh / month) Historical Rates (at 1000 kWh / month)
Bounce Energy (“Organic Power Promotional”) 9.3¢ 12.9-14.4¢
Reliant Energy (“Monthly Flex 100% Texas Wind”) 9.4¢ no historical data provided for this product
Kinetic Energy (“Go Green Monthly”) 9.9¢ 7.5-13.3¢
Texas Power (“Promo Pure Variable Month to Month”) 9.9¢ no historical data provided for this product
Gexa Energy (“SmoothStart Green”) 10.4¢ no historical data provided for this product

Okay, let’s try to draw some conclusions. First, the low rates you see advertised on PowerToChoose.com are strictly for the first month of service. After that, your rates will go up, sometimes by a surprising amount. If you want to continue paying the low rate, then you’re going to have to be vigilant about what you’re being charged and you’re going to have to change companies every single month.

If you find that bothersome, then the best deal on the board today seems to be PennyWise. PennyWise is owned by NRG Energy, which also owns Reliant and Green Mountain Energy. In effect, PennyWise is their “discount” brand and Reliant is the “commercial” brand. Whatever. I’m switching to PennyWise and we’ll see whether they continue to have good prices or not.

Sidebar: What if I wanted to put in solar panels?

I’ve been pondering this for years. The front side of my house faces south. There’s a big area on the front roof, unobstructed by trees or anything else, that could well have some nice big solar panels on it. Reliant (but not PennyWise) offers two different programs, announced earlier this year. In one, you “lease” all the gear and in the other, you buy your own gear. Either way, you sell power back to the grid when you’ve got excess generation. Nowhere on any of their web pages are there actual hard numbers. If I buy, what will the gear and installation cost? If I lease, what do I pay up front and per month? Can I buy/sell power with any company on PowerToChoose or do I have to deal with Reliant? What do I pay on and off-peak for power under the variable plan? (I’ve only been able to find an old copy of their fact sheet which has uncompetitive prices.)

I don’t want to deal with a salesman. Please just post all the numbers online, maybe in a convenient Excel spreadsheet, so I can play with it on my own. If you want to be cool, put together an online calculator, like the banks do for mortgages, that asks you all the right questions and then estimates all the costs. Help me calculate when I break even on the deal.

Trash into treasure

Waste Management Inc. is looking at ways to turn trash into energy, which is the next best thing to actual treasure.

“In my mind, it’s pretty simple why we’re doing it: If we don’t figure it out, somebody is, and they’ll take the waste away from us. If we lose the waste, we’ve certainly lost the business,” said Carl Rush, vice president of the company’s organic growth group, the chief vehicle for its energy investments.

The shift in thinking comes at a time when U.S. landfill collections are hitting a plateau as Americans recycle more, consumer products makers reduce packaging and many large corporations adopt “zero waste” goals.

Demand for renewable energy and fuels also is increasing, in response both to regulations requiring them and to public concerns about the nation’s reliance on fossil fuels and their environmental impact.

The confluence of trends has pushed Waste Management’s leaders to take a hard look at where the company is headed, and has brought a slow and sometimes reluctant culture change to a business that had been set in its ways.

“Five years ago it would have been, ‘just put it in a hole and don’t worry about it,’ ” Rush said. Today, company officials try to avoid even using the term trash. Instead, it’s “materials” or “resources,” he said.

“It’s remarkable to me to see the change that’s taken place just in the mind-set of the people in this company.”

It’s amazing what a change in market conditions can do. Part of the issue is that there are fewer and fewer places to add landfill space that don’t run into stiff opposition from the locals, part of it is as mentioned the push everywhere to cut down on the amount of solid waste that gets generated. When faced with a declining revenue stream from an existing product line, what else is there to do but look for new ways to monetize assets? I commend Waste Management for seeking innovative solutions rather than trying to change the politics of it.

There’s more than one way to do it

Really interesting story about the different approaches being taken by Austin and San Antonio to draw clean energy jobs to their towns. While Austin has taken the traditional route of offering various types of incentives to help create a market for clean energy there, San Antonio has leveraged its ownership of its utility company to great effect.

While Austin has long worked to create a market to attract clean energy companies, San Antonio’s leadership is now using CPS Energy’s purchasing power to demand jobs as a condition of doing business with the utility.

If it can become a clean energy hub, the city might be able to lure hundreds — if not thousands — of new jobs, San Antonio Mayor Julián Castro says.

“San Antonio can be for the new energy economy what Silicon Valley is to software and what Boston is to biotech,” Castro said in June as he announced that five energy-related companies plan to relocate a couple of hundred jobs to San Antonio.

Whether hype or hope, San Antonio’s muscle-flexing has lit a debate among Austin’s clean tech advocates about whether Austin Energy is in danger of losing its leadership role in clean technology and whether the city-owned utility could do more to attract jobs.

When it comes to leveraging a utility into a job creator, “San Antonio is capturing the value of a community owning an electric utility,” said Mike Sloan, a renewable energy consultant and founder of the advocacy group Solar Austin. “In Austin, we’ve talked about it, but we haven’t really done it.”

[…]

CPS Energy has 717,000 electricity customers, second only to Los Angeles. Austin Energy, by comparison, has 411,000 customers.

Accessing San Antonio’s large customer base whets the appetites of companies.

In June, Castro announced five companies agreeing to relocate their headquarters or parts of their operations to San Antonio. They range from a solar developer to a truck assembly firm to a lighting company.

Jack Roberts is the CEO of Consert Inc., a developer of software that allows homeowners to manage their energy conservation through their home computers. Customers save money, and utilities have to build fewer generators.

Roberts is moving his Raleigh, N.C.-based company to San Antonio with 50 jobs by the beginning of next year and said he expects to hire hundreds more as it expands.

He came without tax breaks or cash incentives.

“People want to know what the city, county and the state gave us. Zero,” Roberts said. “It’s all about a business opportunity and a fabulous chance to demonstrate what we can do.”

Remember, CPS is a publicly-owned utility, meaning that the San Antonio market (Austin, too) was not deregulated like much of the rest of the state. Not that any of this will stop Rick Perry from claiming the credit for the jobs that are being created as a result of this, of course. There’s a clear parallel here to the longtime push to allow Medicare to use its bulk purchasing power to negotiate lower drug prices from pharmaceutical companies. Fortunately for the people of San Antonio, there was nothing stopping them from taking this approach. Austin’s more traditional approach has been very successful for them as well, and as the story notes there are limitations to what San Antonio can do. The point is that they have a valuable asset in their public utility, and they’re using it for all they can. It’s going to be very interesting to watch how this all plays out.

Now that’s what I call people power

What a neat idea.

When University of North Texas students work out at Pohl Recreational Center, they will be saving the environment as well as working off those extra end-of-semester calories.

UNT has installed the ReRev renewable energy system on 36 elliptical machines, turning the school into what the company calls “the largest human power plant in the world.”

The system converts energy from a typical workout into electricity and puts it back into the recreational center’s power grid, university spokesman Stuart Birdseye said.

There are 28 other health centers in the country using the ReRev technology, but UNT has more elliptical machines outfitted with it than any of them. Texas State University is No. 2 with 30 machines.

It sounds like this doesn’t generate a whole lot of electricity, but that’s all right. Taking advantage of what you’re already doing makes a lot of sense, and I expect we’ll see more installations like this over time.

Baby, you can charge my car

Plug it in, plug it in.

The city of Houston will make it easier for locals to buy and own electric cars, including speeding up permitting of home charging stations and opening up HOV lanes to the vehicles.

Mayor Annise Parker announced some of the measures Thursday at an event introducing power plant operator NRG Energy’s plans for a citywide electric vehicle charging system.

“I recognize that Houston is a car city,” she said. “But let’s make sure if you have a particular type of car you want to drive, and it’s an electric vehicle, let’s make sure it’s supported.”

The NRG network, branded eVgo, will begin with 150 charging stations throughout the city at retailers and offices.

Walgreens will have chargers at 18 of its local stores, HEB at 10 of its H-E-B or Central Market stores, Best Buy at up to 10 locations and Spec’s at eight.

Fifty of the public stations will be rapid chargers that can charge a vehicle fully in about 30 minutes. The other 100 chargers can do a full charge in about four hours.

OK, I think I’ve run out of cheesy musical allusions. It’s a small step towards a greener planet – it would be nice if we were doing more on the back end, to make sure that the electricity powering these cars comes from green sources and not just more coal-fired plants, for instance – but every little step is needed and helpful. Swamplot has a map of where you can go to get your recharge on, and Hair Balls has more.

Brown’s energy plan

Completing our trifecta of Mayoral policy examinations, we come now to Peter Brown’s energy plan. As with other policy matters, Brown goes into more detail than the others – David Ortez recently wrote that Brown is “winning the policy campaign”, and I think that’s a fair assessment. I’m just going to comment on a couple of points in Brown’s plan, which you should read in full for yourself.

MAKE THEM DELIVER

When Houston residents pay for something, it better be delivered. As Mayor, Peter Brown will stand up to local utility companies, demanding that they adhere to existing contractual obligations under the terms of their current franchise. Utility companies should be responsible for demonstrating compliance with the maintenance, grid-hardening, and energy-efficient investments they’re supposed to be making. No more double billing, no more corporate bailouts. Peter Brown will make sure we get what we pay for, and don’t have to pay for it twice.

One thing I find myself asking over and over again as I look over various policy statements from candidates is “How much of this is something they can do themselves, and how much would require coordination with or the cooperation of some other governmental entity?” I’m really not sure how to answer this question here, though my impression is that this is more of a state issue than a municipal one. And as always with these policy papers, it’s about the what they want to do and not the how they plan to do it, so there’s no help there. I feel confident that this is something that can be made an issue and a prioirity by Houston’s Mayor, and there probably are some things that could be accomplished by fiat or city ordinance, but more than that I couldn’t say.

Still, even if everything Brown proposes here requires the Lege or a state regulatory agency to accomplish, a Mayor Brown can still bring attention to these issues, and can pledge to work with or put pressure on whoever can get them done. Which suggests to me that how effective a Mayor may be in getting other elected officials or agencies to do things he or she wants to do is something that perhaps ought to be given more priority in how we decide who to elect. Perhaps the endorsements that a Mayoral candidate gets from other elected officials is a possible indicator of this, and should be given some weight as a means to guide one’s voting decision. Just a thought.

A BETTER DEAL FOR HOUSTON

As it is, we pay too much. Electricity in Austin and San Antonio is nearly half the price of ours. The City should use its leverage and drive a harder bargain, protecting Houston consumers and getting them a better deal. And we should explore creative ways to lower monthly electric bills, like an opt-in program that would allow residents – especially seniors and those on low or fixed incomes – to buy their electricity from the City and enjoy the discounted bulk rates the City already receives.

The question of why Houston’s electric rates are higher than those of Austin and San Antonio deserves more exploration. For that, I refer you to this 2006 Observer story about electrical deregulation in Texas:

What makes the Texas experiment with deregulation especially interesting is that a “control group” has survived—the municipal utilities and rural electric cooperatives. Nobody disputes that higher electric rates are partly due to the near-tripling in cost of natural gas, the fuel for 46 percent of Texas power generation. But the rates of still-regulated city-owned utilities and electric cooperatives, which also use natural gas power plants, are substantially cheaper almost across the board. A ratepayer in Austin—who must buy power from the city-owned Austin Energy—spends a little less than $95 each month for 1,000 kwh of electricity. In San Antonio, it’s about $72. Austin and San Antonio have the advantage of owning their own power plants, but the statewide average bill for customers served by municipally owned utilities is a little over $100 and is $97 for cooperatives, according to the PUC.

The cheapest service plan—one negotiated by the City of Houston—in the entire deregulated market is about 35 percent more expensive. What accounts for this difference? “[T]he energy being sold in the deregulated service areas didn’t cost any more to produce than in the regulated areas,” says Biedrzycki of Texas ROSE. “The difference is in the way the pricing is established.” In the deregulated market, economists and industry experts say, expensive natural gas-fueled plants generally act on the “margin” to set the wholesale price that retail power companies must pay for all power generation. Even though it’s currently much less expensive to create electricity from coal and nuclear generators, costly natural gas plants control the market price.

“[O]wners of nuclear and coal plants have no incentive to charge anything less than the gas-based market price [to retailers],” as the Association of Electric Companies of Texas explained in a presentation to lawmakers recently.

Again, one wonders what the Mayor can do on his or her own about this, and what would require legislative intervention. Regardless, one presumes that Brown or any of the other candidates would prefer not to rely on coal-fired plants to get a better deal for Houston consumers. Brown does talk about making a bigger investment in renewable energy in his plan. I hope we’ll see something like this as part of it.

EMPOWER HOUSTON TO HELP

Peter Brown will use the latest technologies to allow residents to instantly alert the City of poorly maintained infrastructure – including downed lines and poor maintenance – to keep our grid working and electricity flowing. Streamlined notification processes using smartphone applications enable quick and easy reporting to city departments, allowing residents to quickly collect and share photographic evidence of disrepair or neglect. We can also connect with residents via their existing social networks like Facebook and Twitter to enhance communication between residents and City departments.

I highlight this to show Brown’s commitment to better service through smartphones. Of which I definitely approve.

Overall, I like Brown’s ideas, and think that more attention should be paid to stuff like this. For all the talk we always get about “finding efficiencies” in government, this is exactly the sort of place that we should be looking for them. Of course, some of these things require an up-front investment, which may not pay off within the six years of a Mayor’s term in office. That doesn’t mean they’re not wise or necessary, but it does tend to warp the political dynamic of implementing them.

That wraps up this week’s look at Mayoral policy positions. I’m sure we’ll get more of these as we pass the tradiational Labor Day start of the campaign season. I’ll do my best to do more of these analyses as we do get them. Let me know what you think.

Monday Lege roundup

Lots of legislative action today beyond the voter ID vaudeville act. Here’s a quick roundup of some other bills of interest.

HB1736, also known as the Tim Cole Act for the man who was posthumously exonerated this February, has passed both chambers and is on its way to Governor Perry’s desk. The bill increases the compensation given to those who are exonerated after being sent to jail. Grits has the story, and more info is here and here.

– The statewide smoking ban is stuck no more.

A statewide smoking ban was endorsed by a Senate panel today, after authors agreed to exempt cigar bars, patios of restaurants and bars, and nursing homes.

Sen. Rodney Ellis, D-Houston said the compromises were necessary to resuscitate the measure, which he called a matter of life and death.

“It goes a long way toward reducing the incidence of cancer in Texas,” he said of his bill. It cleared the Senate Health and Human Services Committee on a 5-3 vote.

Committee Chairwoman Jane Nelson, R-Flower Mound, joined the panel’s four Democrats in voting for the bill, which Ellis praised as “much stronger” than a companion measure in the House that was watered down Friday to exempt 224 of the state’s 254 counties, limit enforcement and carve out many loopholes for bars.

So Sen. Nelson was true to her word. Kudos to her for that. SB544 still has to pass the full Senate and then get reconciled with the House bill, once it passes that chamber. There’s still work to be done, in other words.

Solar energy gets a boost.

[SB541] by state Sen. Kirk Watson, D-Austin, would provide so-called renewable energy credit incentives for electric generation from equipment manufactured in Texas and sets a goal for electricity generated from sources other than wind at 1,500 megawatts by 2020.

“This is designed to help bring large, industrial-size solar facilities to Texas,” Watson said. “This is about looking forward to the future — in alternative energy, jobs and manufacturing — much the same we did for wind a few years ago.”

Good. ACT Texas and Environment Texas cheer, and I join them in that.

– Finally, both strip club bills, Rep. Senfronia Thompson’s HB982, and Rep. Ellen Cohen’s HB2070 were scheduled for votes today, the former in the Senate and the latter in the House. You have to figure there can only be one, so we’ll see which one survives.