EDF releases “The State of the Energy Crunch in Texas” report

(Austin, Texas – April 1, 2013) Environmental Defense Fund (EDF) today released a report titled “The State of the Energy Crunch in Texas,” highlighting the pressures facing the Texas electric grid, which include a shrinking water supply, growing population and rising summer temperatures. The report provides solutions to help keep the lights on in Texas, which is critical to retain and attract new businesses, and details legislation that will help meet future energy needs while providing direct benefits to customers and reducing water usage.

The ongoing drought puts Texas’ power plants at risk, threatening a return of the rolling blackouts caused by extreme winter conditions in 2011. Fortunately, many of the solutions that are available to keep the lights on also benefit people and the environment.  Our report focuses on solutions like customer, or demand-side, resources such as demand response (DR) initiatives (which allow customers to voluntarily reduce peak electricity use and received a payment for doing so in response to a signal from their utilities), energy efficiency programs and increasing renewable energy sources like solar and wind, all of which consume almost no water and can be built faster than gas and coal plants.

The report also provides an overview of Texas legislation currently being considered by several committees in the 83^rd Legislature. This includes bills that allow all customer classes to participate in electric markets, provide innovative clean energy financing mechanisms and offer fair compensation for customers who provide power back to the electric grid by generating excess electricity from renewables or conserving energy using demand response initiatives.

“It’s crucial that we take action now to preserve our electric grid, said Colin Meehan, policy manager at EDF “This report highlights several ways to protect customers from rising electric costs while keeping the lights on and protecting our limited resources.”

The Texas Public Utilities Commission (PUC) actions to date will lead to higher electric costs for customers, by 9 percent or more, according to economists at the University of Texas. In EDF’s opinion, the only other action seriously considered by the PUC was proposed by GDF SUEZ, an independent generator and retailer based in France, with U.S. headquarters in Houston.  As the author of this proposal noted in a public workshop, the concept is not intended as a direct solution to resource adequacy and is projected by the Electric Reliability Council of Texas (ERCOT) to cost up to $2 billion during a summer like 2011.  Yet, neither action is expected to ensure the state will meet its future energy reliability needs.