Texas Sunset Bill softens the blow from anti-renewables changes

May 30, 2023 Michael Schoeck

Invenergy's Samson Solar Energy Center (1.31GW) solar-plus-storage project in Texas.

Image: Invenergy LLC

The Lone Star State of Texas deployed a staggering 9,163 MW of solar, wind power and storage assets through year end 2022. That’s progress that’s hard to erase and felt across both sides of the political divide.

Texas politicians and lobby groups came to a resolution late Sunday night, May 28, which amends recently filed legislation from SB 624 designed to set severe restrictions on the permitting of wind, solar and clean energy assets in the coming year. The resolution, however, could still throw a wrench into the progress Texas has made in vying for the top state for renewable energy development after California.

Under HB 1500, the ‘PUC Sunset’ bill, renewable energy projects will have to pay higher transmission fees and, starting in 2027, all renewable energy projects will be forced to subsidize fossil fuels through “firming’ requirements. The Public Utility Commission of Texas will also study whether to make renewables pay higher “ancillary services” costs. However, the Legislature rejected a discriminatory permitting program for wind and solar.

The firming requirement applies to power facilities signed into interconnection after January 1, 2027, and allows generators to meet the requirement within their entire portfolio by utilizing on or off-site generation, including battery energy storage (BESS) systems.

Cost allocation, as passed by the state’s senate, is now included in the amended legislation package, and conducted by the Electricity Reliability Council of Texas (ERCOT), must be delivered to the state’s legislature no later than December 1, 2025.

Luke Metzger, executive director of advocacy group Environment Texas said, “In a legislative session that saw an unprecedented effort to hogtie the growth of wind and solar energy, we are thankful that the Legislature ultimately rejected the measures most damaging to clean energy. Renewable energy is reducing pollution, saving consumers money, and playing a critical role in powering the grid.

“The anti-renewable efforts were premised on a false claim.” In his press release declaring victory, Texas Lieutenant Governor Dan Patrick claimed that “renewable energy failed to keep the lights on for millions of Texans” during Winter Storm Uri. Multiple studies have found such claims to be inaccurate, Metzger said.

“We need, and Texans want, more clean energy, not less. More wind and solar energy, more battery storage, more energy efficiency, and more interconnection with the national grid,” Metzger said. “Unfortunately, the legislature ignored these solutions to strengthen our electric grid while protecting consumers and the environment.”

The PUC Sunset bill (HB 1500) now heads to Governor Greg Abbot’s desk. Since all three branches of the state were closely engaged on this bill, it is highly unlikely that the governor would veto it, though he has a veto period through June 18.

In early May, the state’s senate voted 21-9 in favor of SB 624, a bill that would place significant permitting restrictions and fines on solar and wind energy projects in the state.

Ongoing legislation from SB 2627 and SJR 93, provides $7.2 billion in low-interest loans to support the development of up to 10,000 megawatts of new gas power plants in Texas. Gas power plants are also eligible for tax breaks under HB 5, which provides abatements on school taxes for new manufacturing facilities.

Under the current legislation, renewable energy and battery storage projects are no longer eligible for such tax breaks.

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