Steffy: Austin inaction clouds Houston company’s solar project

For Randle Taylor, it’s as if inaction in Austin has blotted out the sun.

Taylor has the permits, the engineering studies and the equipment needed to build one of the biggest private solar projects in Texas, yet his plans are stymied because the Public Utilities Commission hasn’t followed through on a requirement to encourage more solar generation in the state.

Under the 2005 law that approved construction of $8 billion transmission lines to bring wind power from West Texas eastward, the commission and the state’s grid operator, the Electric Reliability Council of Texas, are supposed to adopt a mandate to generate 500 megawatts from renewable sources other than wind – which essentially means solar – that would be tied into the new transmission lines.

The commission, though, has never followed through on that requirement.

“There’s no direction from the PUC or the legislature or ERCOT of the direction they want to go,” Taylor said. “That’s created a lot of uncertainty for the financial institutions, the developers, and everyone involved in the process.”

Taylor’s company, White Camp Solar of Houston, has plans to build a solar farm capable of generating more than 100 megawatts from an 844-acre site on a century-old cattle ranch about 100 miles east of Lubbock. One hundred megawatts would power typical consumption for about 50,000 homes.

The project is stalled for a lack of financing. Like many other generating companies, Taylor is having difficult finding lenders to underwrite the construction when there’s no way to forecast revenue from the power that will be sold.

Texas’ deregulated market has created a system in which power is sold on one-year contracts. Most finance companies want a five- or 10-year revenue forecasts to finance new construction.

The state’s solar generation mandate would bring some certainty to the White Camp deal by guaranteeing it would have commitments for its power for years to come, Taylor said.

Despite the clear open skies of West Texas, solar has been slow to catch on in the state. Like wind, it remains more expensive as a 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.

The White Camp project would be the first private solar venture of its size. A couple of larger ones are being developed in cooperation with the municipal utilities in Austin and San Antonio.

The crisis ahead

The projects are important because a generating crisis looms in Texas. The state is likely to face a capacity shortfall as early as next year if it can’t encourage new plant construction. The utility commission’s efforts so far have centered on raising limits on wholesale prices, which hasn’t resulted in more generation.

The same commissioners have said they’re reluctant to mandate solar generation for fear it will cause power costs to rise. They also have said they don’t want to favor one form of generation over another.

Yet state law has already done that by calling for the solar mandate in the first place. As I’ve pointed out before, regardless of how you feel about solar power or the idea of government subsidies to encourage it, we as taxpayers have already invested billions in the transmission system – and those costs are starting to show up on our utility bills. The utility commission should make sure we’re getting our money’s worth, which means encouraging as much renewable generation in West Texas as possible.

Can be built quickly

While it’s not a lot of generating capacity, the White Camp project has the advantage of speed. It could be built faster than a conventional natural gas plant, which might take four or five years.

“I could have this thing completely installed in 10 months,” said Taylor, who started working in the oil patch in the 1980s and has been involved in renewable energy projects for more than a decade. “We could start immediately. There is nothing else that can be built out quickly.”

The solar facility has another advantage. As Texas struggles with a devastating drought, the plant would require no water.

Solar power, unlike wind energy, is generated during the hottest part of the day, which is also the time of peak electricity demand.

Given the dire situation that threatens the reliability of the Texas power grid and the investment the state has already made in renewable generation, the utility commission needs to stop clouding the issue and act on the solar mandate so projects like Taylor’s can move forward.