A proposed change to the way the Texas power grid operates would cost households billions of dollars more each year — including $8.5 billion in 2025 alone — without doing much to ensure that the lights stay on, according to a new study.
State officials’ apparent favorite, the recommendation would have utilities such ascontract directly with power generators to ensure that they have enough electricity to meet demand.
The Texas Consumer Association’s report favored other potential tweaks to the power market operated by the Electric Reliability Council of Texas. One calls for “dispatchable energy credits” that would reward generators that own quick-start resources such as efficient natural gas turbines or utility-scale battery arrays.
The option to prevent plant retirements “would cost roughly 90 percent less than the LSEO and do more to increase the reliability of the state’s power grid,” the study’s authors found. It’s not clear how CPS Energy, a city-owned municipal utility, would be affected by any of the three policies. It’s also unclear whether the two aging gas-fired power plants that CPS is looking to close over the next half-decade would be forced to keep operating if the state adopted the backstop reliability policy.
While the favored LSEO proposal would bring 2.5 gigawatts of new natural gas-fired generation by 2030, the dispatchable energy credit option would incentivize 3.2 gigawatts of new battery storage. The backstop reliability system policy preserves 8 gigawatts of power plant generation capacity from closing down.
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