Following Winter Storm Uri, which left more than two out of three Texans without power at some point, the state’s leadership has been under pressure to strengthen the power grid. That pressure has grown with every subsequent winter freeze or summer heat wave as Texans are reminded of the fragility of our grid.
After two years of review from state officials and out-of-state consultants, the Public Utility Commission (PUC) of Texas now has a proposal before the state legislature to introduce a Performance Credit Mechanism (PCM), a system that would radically overhaul how our energy market functions, institute unprecedented government control, and leave consumers paying more to heat and cool their homes.
The PCM works by awarding credit to power plants that are available to produce power during strains on the grid, and then requiring electricity providers to buy those credits. The challenge, however, is there’s no guarantee the electricity that was paid for in advance will actually be available when needed.
If this is supposed to be an energy insurance program, it’s a terrible one.
One thing is clear: the PCM will raise energy costs at a time when 45% of Texans are struggling to pay their energy bills. It’s estimated to cost consumers about $5.7 billion annually, and as ERCOT CEO Pablo Vegas said, “in an energy market, all costs flow down to consumers… Generators would pass that cost down to consumers who pay for the energy.”
The facts behind the February 2021 and December 2022 outages have been intentionally misrepresented by those seeking to discredit renewables. As Matt Welch and Josiah Neeley recently wrote, “every single credible after-action report… concluded that the freezing of mostly thermal power plants and the natural gas system were to blame for the vast majority of the power failures.” In other words, the favorite talking point of state leaders that renewables were to blame is false. As for the Christmas Eve 2022 outages, they were caused by damaged power lines – not a failure of the grid.
The discrepancy between fact and fiction is important because the PCM would strictly benefit traditional energy sources like gas and coal; renewable energy is not eligible for these credits. This isn’t a mistake. The supporters of this system are seeking to create a market that favors the very energy sources that caused our blackouts in the first place.
Texas doesn’t need a top-down, Soviet-style takeover of our energy market. That sort of control should be reserved for states like California, which also picks winners and losers in favor of renewables by mandating 100 percent renewables by 2045. The legislature should instead spend their time and funding on strengthening and weatherizing our energy infrastructure. Our grid needs repair, but the PCM proposal is like buying a brand new car because your current car needs new tires.
As a conservative, I believe in economic freedom, competition, and American innovation. Despite what some Republican leaders are saying, the reforms before the Texas Legislature stand directly against those values. It would mean top-down control, with the government picking winners (power plant operators and traditional energy producers) and losers (renewable energy). Such an overhaul would ultimately undermine the competitive environment and the all-of-the-above energy approach that makes Texas so unique and attractive to millions.
The debate over how to fix Texas’ energy issues has been far from sober. Misinformation has dominated the discussion, renewable energy sources have been unfairly demonized, and the effect on consumers has been ignored. Supporters of the PCM seem to be intoxicated on the idea of government control.
Read the original here.