For Immediate Release:
Friday, June 1, 2012
Contact:
Cyrus Reed, Sierra Club, 512-740-4086; cyrus.reed@sierraclub.org
Report Finds Proposed Increase to Electricity Prices
Will Not Solve Texas’s Power Needs Sierra Club Says
Energy Efficiency, Clean Energy and Other Options Still Better for Texans
Austin, TX -- Today, the Electric Reliability Council of Texas (ERCOT) released a report
by the Brattle Group looking at investment possibilities for new electrical generation
in Texas. The report explains the effects of ERCOT proposed changes to the structure
of the Texas energy market, as well as additional policy options. Some of the changes
that ERCOT and the Public Utility Council (PUC) have been considering include
raising the maximum price that a generator can bid for one megawatt hour of
energy from $3,000 to as much as $9,000. 1 megawatt hour is enough energy to
power about 1000 homes for one hour. The plan has drawn harsh criticism from
some strange bedfellows, including the Sierra Club, the Cities of Austin and
Houston, the Office of Public Utility Council, a coalition of retail electric
providers, large industrial customers and the South Texas Electric Cooperative.
These groups and cities have all
publicly opposed a plan by the Public Utility Commission (PUC) to allow
electric power producers to raise the cost of energy beginning in August. The PUC
see these price hikes as a method to spur more electrical generation from
natural gas and coal-fired power plants.
"Texans shouldn’t take the bait, this is
worst possible time to put an extra burden on our families’ wallets," said Cyrus Reed, Conservation Director of the Lone
Star Chapter of the Sierra Club. "Instead of using our money to build
more coal and gas plants, the PUC should implement their rules proposed to raise
energy efficiency goals, goals which will reduce the demand for electricity and
decrease our electric bills. It’s also time they start investing in the future
of the Texas economy and approve rules that would require at least 500 MWs
(about 400,000 homes worth) of renewable energy from resources other than wind
be installed by 2015."
In comments submitted last month to the
Public Utility Commission (PUC), the Lone Star Chapter of the Sierra Club told
the Commission to choose faster, easier, and more cost-effective options.
The proposal by PUC to
raise the maximum bid from $3,000 up to $9,000 for one megawatt hour could put the squeeze on the average Texan’s wallet,
costing a household an additional $480 a year in electricity cost. An
independent analysis performed on behalf of ERCOT found that raising the
maximum cost of one megawatt to $4,500 would raise overall electricity prices
by some $15 per month on the average homeowner's bill, while PUC’s second proposal
to raise the maximum bid to $9,000 by 2015 could raise overall prices by $40
dollars on the average bill.
“Today’s Brattle Group report provides
some important information about market prices, investments and generation, but
it fails to adequately look at low-cost solutions that are already on the books,”
said Reed. “Energy efficiency programs, the potential for 1,000 of megawatts of
demand response (alternative ways to meet our electricity demand), and ways to
promote clean energy like solar are ways we can ensure the lights stay on while
reducing the cost to working Texas families.”
The Brattle Group reports found that even
if the price caps were raised to $9,000 per megawatt hour, there would not be enough
power added to the energy market to ensure we have the electricity we need in a
crisis. This concept, known as a reserve requirement, makes sure that if there
is a Hurricane, an extreme heat wave or other energy shortage that Texans can
keep their lights on. . The Brattle Group report does state that the Texas energy
market could consider different alternatives to its current form which relies
solely on electrical generation to meet energy needs as a way to ensure Texans
have enough power in a crisis, or when energy demand is at its highest.
Reed noted that the Commission has
proposed a rule to implement legislation that requires certain utilities in
Texas to meet 30% of the growth in their electrical demand through energy
efficiency programs, and that could potentially reduce electrical demand substantially
at peak times, like the middle of a hot Texas afternoon in August.
However, the rule has very tough
"cost caps", electricity rates that power companies cannot exceed,
which certain utilities like El Paso Electric and Texas-New Mexico Power say
are so low they cannot meet the goals required by the legislature.
"Let's give the utilities the flexibility they need to meet their
demand and energy savings goals for pennies on the dollar rather than raise
prices at certain times by $1,500 or even $6,000, raising everyone's
electricity bills," said
Reed. “Otherwise, this simply looks like a measure to promote building new
power plants for the sake of building new power plants. That’s not the right
solution for Texas."
Reed noted that the Sierra Club has hired
a national expert to look at potential ways to save additional energy through
these utility programs, and that analysis will be released next week.
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A full set of our initial comments can be found at:
http://texas.sierraclub.org/press/newsreleases/20120517PUCrateComments.pdf
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