Opinion

To solve energy crunch, focus on real solutions

The agency responsible for making sure we have enough power, the Electric Reliability Council of Texas (ERCOT), says that Texas will be able to meet its energy needs this summer without resorting to rolling blackouts. We hope the council is right, but a closer look at the facts shows that Texas should not be so sanguine. ERCOT's projection assumes slow economic growth as well as markedly cooler summer weather and none of the power plant outages we saw last year. This is in spite of forecasts predicting a warmer-than-average summer and continuing signs of accelerating economic growth.

Last summer the state came perilously close to blackouts or brownouts as a result of extreme weather, plant outages and decisions by power companies to hold off on building new plants. Continued low prices have made the problem worse, leading to an energy crunch. Additionally, record temperatures and the ongoing drought put existing plants - and the grid's ability to meet summer air-conditioning demand - at risk.

Instead of dealing with the problem, state leaders have used the energy crunch as a chance for political grandstanding, another opportunity to blame the Environmental Protection Agency (EPA) for their own failures. The EPA didn't create this situation, and it can't be solved with political posturing. Unsupported claims that future EPA rules might cause a few plants to close at some future date has no effect on the fact that we have an energy problem now. Texas requires real solutions and new ideas if we're going to keep the engine of our economy running.

Although the Public Utility Commission (PUC) and ERCOT recently moved to address part of the problem by raising artificial price caps, which distort price signals for customers, we cannot build plants fast enough to deal with the problems we face this summer and the next few. The good news is that there are solutions to keep the lights on, such as increasing energy efficiency, renewable energy and creating demand-response programs that work for all Texans, not just for industrial customers or only during emergencies. Demand response is any change a customer makes in normal electric usage patterns in response to market signals; well developed programs pay customers a market-based price for their actions, which improve grid stability. The Federal Energy Regulatory Commission (FERC) calculated that demand-response programs could provide enough resources to meet our energy needs for the next 10 years without building any new power plants. While ERCOT staff and others have taken steps to increase this resource, current programs are small in scale and limited to emergency use or large industrial customers, ignoring the lion's share of benefits to the grid and electric customers. ERCOT needs to remove outdated barriers that prevent entrepreneurs from using innovative technologies that allow aggregation of demand resources, such as turning off swimming pool pumps during peak hours.

Unfortunately, when it comes to energy efficiency, which is also a key resource for dealing with the energy crunch, the best one can say is that the PUC is sending mixed signals. This summer, PUC officials plan to ask Texans to voluntarily raise their thermostats by a few degrees, a commendable request. This same PUC has proposed rules that would decrease the effectiveness of current efficiency programs, adding unnecessary red tape and discouraging efficiency.

Likewise, the PUC is failing to take advantage of available Texas resources such as solar power, which produces the most power during the heat of the day when it's needed the most. PUC Chair Donna Nelson has acknowledged that the Renewable Portfolio Standard (RPS) is one of the state's few successful policies for driving investments in new energy resources. Seven years ago the state Legislature authorized the PUC to expand the RPS for nonwind resources, including solar. Although the PUC has held multiple hearings on the subject, it has been too timid to pass a rule that could expand solar in Texas like the original RPS expanded wind.

It's not enough to solve our problems by crossing our fingers and hoping for a cooler summer or praying for rain. Today, the Brattle Group will issue a report to ERCOT on solutions to help with the near-term energy crunch and prepare us for changing long-term energy needs. The group's previous analyses, including the FERC report above, suggest that demand response, efficiency and renewables can play key roles in meeting future energy needs. The state should quickly adopt policies that promote these real, long-term solutions instead of focusing on political grandstanding and short-term stopgaps.

Marston is vice president of energy and director of the Texas regional office of the Environmental Defense Fund.