Texas is a unique place. Within a land that celebrates great individualism, they came together to build a multi-billion dollar power grid that now allows free market capitalism to batter down the price of electricity. An interesting mix of socialism and capitalism.
In a few weeks, municipal utilities and electric cooperatives in the state of Texas will have legal confirmation on their right to own energy storage facilities that sell energy or ancillary services, while not having to register as an energy generator. Current policy in the state, Sec. 35.152, defines energy storage as a generation asset, which requires owners to register as power generators.
The act, 86(R) SB 1012, adds the below language to the above Sec.35.152:
(d) Subsection (b) does not require a municipally owned utility or an electric cooperative that owns or operates electric energy storage equipment or facilities described by Subsection (a) to register as a power generation company under Section 39.351(a).
The amendment is applicable on September 1, 2019.
In Texas’ ERCOT region (which covers 90% of the electricity demand in the state), the investor-owned companies that own the power lines aren’t allowed to own generation assets, and electricity users can contract directly with generators. However, per Texas expert Joshua Rhodes, municipality owned electric utilities and energy cooperatives are allowed to own generation assets if they choose to, and some in fact do. Which means this legislation merely reminds, and codifies what was already known.
This is a reminder of how the State of Florida and residential solar lease companies also didn’t change the law in 2018 when state regulators ruled that Sunrun’s 20-year solar equipment lease not a retail sale of electricity.
Very recently, the first co-op owned energy storage project was begun, with Pedernales Electric Cooperative (PEC) signing a deal with Aggreko for a 2.25 MW/4.5 MWh battery. The system will provide grid services, as well time-shifting solar from a nearby facility.
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With ERCOT as ‘overseer’ how does this effect the overall power mix? By that I mean that over the last few years, it seems like large energy companies like Duke, NRG, SEMPRA and maybe others have built or bought generation capacity in Texas and have PPAs with the co-ops and other entities, like the Duke Energy Los Vientos III and IV wind generation projects, where the power is sold to Austen Energy. It seems like there are a lot of big energy companies serving the ERCOT co-ops. Do you think their presents in Texas will change the “ownership” of assets over time? It seems a pretty easy for these large companies to insert themselves into the sphere of influence of these Texas power authorities. Sooner or later, it could be Duke Energy Texas or NRG Energy Texas without the ERCOT.
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