Steffy: Texas needs to make hay on power while the sun shines

If the state power grid were a highway, it would be a pricey toll road to nowhere

Last week, the Public Utility Commission, which is in the driver’s seat on this journey of contradictions, swatted aside a petition to set mandatory targets for solar power generation without allowing any public discussion. Earlier, in a written response to the proposal, it warned that a solar mandate would lead to higher electricity costs.

So will the commission’s own strategy of jacking up wholesale price caps, but more on that in moment.

“They chose not to look at the record and summarily dismiss the petition,” said Tom “Smitty” Smith, Texas director for Public Citizen, one of 13 consumer and environmental groups that submitted the petition. “We expected there to be some discussion before the commissioners.”

We all should have expected more discussion. Regardless of how you feel about solar power, you have already made an investment in it.

In 2005, the state approved construction, at our expense, of $8 billion transmission lines to bring wind power from West Texas eastward.

Much as lawmakers had done with wind power, the plan authorized the utility commission to mandate generating 500 megawatts of renewable energy from sources other than wind, which essentially means solar. That generation would then be tied into the new transmission lines.

The commission never followed through on that provision.

Part of the sales pitch for the transmission project was that the lines would be used not just for wind power, but solar power as well.

Coming our way

The cost of the transmission lines is already showing up on utility bills in the Dallas area as transmission companies pass on the costs, and it will hit Houston soon.

Solar, by the way, tends to be a more reliable source than wind for generating peak electricity, because the blazing midsummer afternoons are the times of greatest demand.

I have criticized the transmission project, calling it a massive corporate welfare effort, but that fight is over. We cannot simply roll up the lines and get our money back. We should at least try to get our money’s worth.

Make no mistake: Solar, like wind, is a more expensive generating source than natural gas or coal, but its costs have fallen 80 percent in the past four years, according to the Solar Energy Industries Association.

Smith argues that in rejecting the solar plan, the PUC is using old data that doesn’t account for price declines.

strong>Savings through solar

The solar association commissioned a study by the Brattle Group, the same consultants hired by the utility commission to study the impending shortage of generating plants.

It found that during the scorching summer of 2011, when wholesale prices peaked, the benefits of solar would have outweighed the cost, saving the state some $300 million in wholesale power costs.

As we struggle to find enough generation to keep the lights on summer after summer, we shouldn’t be so quick to dismiss a source that would use the infrastructure for which we’ve already paid.

Similarly, we’re already paying for smart meter
technology in the Houston area, yet for all its promised benefits, companies aren’t using the technology to promote flexibility or allow consumers to sell power back to the grid in times of shortages.

Instead, commissioners last week decided to double, once again, the wholesale price caps for electricity, to $9,000 a megawatt-hour from $4,500. It did much the same thing this summer, and it hasn’t encouraged the construction of power plants.

That’s nothing more than a stalling tactic, a let’s-wait-and-see-if-the-lights-stay-on approach that is likely to increase power costs without any tangible benefits for consumers.

Crossed fingers

We find ourselves crossing our collective fingers against the threat of rolling blackouts while paying, handsomely, for infrastructure that could help but that we refuse to embrace fully.

What we need is a utility commission that has the vision to knit together the existing elements in which we’ve already invested — renewable transmission and smart meters — and apply them toward the bigger problem of the looming generating shortage.

Instead, the commissioners have doubled down on failed policies, speeding us ever faster down the electric road to nowhere.

Loren Steffy, loren.steffy@chron.com, is the Chronicle’s business columnist. His commentary appears Sundays, Wednesdays and Fridays. Follow him online at blog.chron.com/lorensteffy, www.facebook.com/LorenSteffypage and twitter.com/lsteffy.