Houston Chronicle by L.M. Sixel 11/30/2018
Two of the nation’s biggest power companies have opened a new front in the battle with renewable energy, targeting Texas transmission rules with the goal of raising the cost of wind and solar electricity generated in remote West Texas and shipped to population centers such as Houston and Dallas.
Calpine Corp. of Houston and NRG Energy, of Houston and Princeton, N.J., have asked the state Public Utility Commission to change the way transmission costs are apportioned among power generators, a move that wold undo a key element of the policies that have made Texas the nation’s top producer of wind energy. Instead of using state tax credits, Texas has attracted billions of dollars in investment in wind energy by offering generators easy access to the biggest electricity markets through low-cost transmission.
Not only would the change proposed by Calpine and NRG increase the price of electricity from West Texas wind and solar farms, analysts said, it could also discourage new investment in renewable projects.
“This is the old energy industry fighting back,†said Ramanan Krishnamoorti, chief energy officer at the University of Houston.
The fight is part of a battle that has widened in recent years as wind, solar and other renewable technologies have become more competitive, gained an increasing share of power markets and cut into profits of traditional generators such as Calpine and NRG. Subsidies and other policies that have helped wind and solar energy compete with coal, nuclear and natural gas plants are coming under attack in Texas, other states and Washington.
Market distortions
In Texas, for example, Texas legislators voted last year to stop providing property tax breaks to wind farms built within 25 miles of military airfields, a measure passed ostensibly to address local concerns that the turbines could possibly interfere with radar and flight paths and make installations vulnerable if another round of base closings were launched. But the lobbying effort was financed by anti-renewable groups with opaque funding sources, said Jeffrey Clark, president of Wind Coalition, an Austin trade group representing the wind, solar and storage industry.
“They just capitalized on this issue,†said Clark.
Oklahoma, which is second only to Texas in wind generating capacity, last year ended state tax breaks for wind farms following a campaign backed by Harold Hamm, CEO of Continental Resources and an adviser to President Donald Trump, and other oil and gas companies. In Washington, the Trump administration has proposed, so far without success, deep cuts to renewable subsidies and research funding, while advocating for a bail out of coal and nuclear power plants that have been undercut by cheaper energy generated by renewables and natural gas.
Trump recently nominated a critic of renewable power and subsidies to the Federal Energy Regulatory Commission, which oversees power markets. Bernard McNamee, a former staffer at the conservative Austin think tank Texas Public Policy Foundation, has advocated for subsidies for coal and nuclear plants, arguing that they are victims of market distortions caused by government support for wind and solar power, while attacking renewables as unreliable.
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