Texas Senate bill affecting incentives causing concern in local wind industry

SB 931 would eliminate Renewable Portfolio Standard, which requires utilities to get a portion of electricity from renewable energy sources
 
Many on the South Plains may not be too fond of its windy conditions, but that wind has helped put West Texas on the map for wind energy production, especially with the help of state incentives.

Those state incentives may soon be cut off if the Texas House of Representatives approves a bill that helped get the Texas wind industry going.

Many wind industry experts said it isn’t a smart move. They said South Plains wind farms shouldn’t be impacted, but the future of wind development in Texas may be hindered.

Senate Bill 931

State Sen. Troy Fraser, R-Horseshoe Bay, introduced Senate Bill 931 on March 4 and it passed later that month by a vote of 22 to 9. The bill would eliminate the state’s Renewable Portfolio Standard, which was introduced in 1999 and implemented in 2001. The RPS requires utilities to get a portion of their electricity from renewable energy sources.

In 2005, the Legislature set a goal of 5,880 megawatts of renewables by 2015 and 10,000 megawatts by 2025. Legislatures also established the renewable energy credit trading program in the marketplace to help boost the wind industry. According to SB 931 and Fraser, the state met its goal earlier than expected and the RPS is no longer needed.

SB 931 would also put an end to the renewable energy zone (CREZ) transmission project. CREZ is a $7 billion transmission line project, paid by the state’s electric ratepayers, that was started to provide lines to deliver power from wind farms to cities across the state.

SB 931 has been sent to the House to be heard in committee.

Impact on West Texas

Jeff Clark, executive director of the Wind Coalition, said SB 931 is sending a message that Texas is not an “all of the above” energy supporter.

“Repealing the RPS is harmful to the investors who committed capital to our state and, because it focuses solely on killing incentives for wind and solar power, it sends the misguided message that Texas will continue to support its energy industries, just not its renewable ones,” Clark said. “Texas is an international renewable energy leader because of sound state policies. We should celebrate our success, not impede it.”

According to data collected by the Public Citizen Texas office, the wind energy industry has created more than 40 new businesses and about 30,000 construction jobs in 57 West Texas counties since 2001. Wind farmers also generate more than $85 million in taxes annually and provided more than $9 billion in new taxable assets in Texas in the last 14 years.

David Power, Public Citizen Texas deputy director, said the boom in the wind industry came with help from state incentives and to pull them now would be unfair for developers and may slow down the industry.

“The existing wind farms were financed with the expectation that they would have a robust renewable energy certificate market,” Power said. “By sort of finishing this up, it will remove about one-third of the trading in the market which will — like any market — collapse the pricing. We also don’t believe it is fair to yank the carpet out from underneath the people that brought their cash capital and employees to Texas without some sort of a warning.”

Lubbock Power & Light officials are anticipating House representatives will approve SB 931 and are helping the West Texas Municipal Power Association to maximize the value of RECs WTMPA currently holds before the bill is implemented. If SB 931 is passed by the majority of the Legislature the bill would take effect Sept.1. If it’s passed by two-thirds of the Legislature, the bill will take effect immediately after Gov. Greg Abbott signs it.

The RECs will not be worth much if the bill is passed.

John Billingsley, Tri Global Energy CEO and chairman, said the state should continue to invest in renewable energy and keep at the front of the wind industry.

“We’d like to see the state raise the goal for renewable energy,” he said. “Because Texas provides a great natural resource and is extremely good as far as wind characteristics, a higher goal is more in line with the state’s quality of available wind power. Because of our state incentives, Texas has blown past its wind goals. We’re proud of the work we’ve done that has helped Texas become first in the nation for wind power production.”

South Plains wind farms

Tri Global Energy’s subsidiary corporation, Hale Community Energy, broke ground on a wind farm in Hale County that would install about 600 wind turbines on more than 122,000 acres between Abernathy and Petersburg and north to Plainview. Billingsley said projects like Hale County’s will not be slowed down if SB 931 is passed, but said development on future projects in Texas may become an issue.

“For Tri Global, we don’t intend to slow down our efforts,” Billingsley said. “However, we believe the pace will slacken for the wind energy industry in Texas. We may have to take a second look at trying to start development of new projects in Texas.”

Mike Fox, Plainview and Hale County Economic Development Corp. director, has kept an eye on SB 931 since Transportation Technology Services broke ground on a regional wind turbine distribution center just east of Plainview.

The new wind project that is being developed will eventually generate about 5,900 megawatts of wind energy within a 100-mile radius of Plainview and bring 10 to 12 new jobs.

Fox said the impact of the passage of SB 931 is unknown, but said the new wind farm shouldn’t be affected.

“Whether we’re going to be impacted directly or not is kind of anybody’s guess,” Fox said. “We already have our CREZ lines in place and a lot of the wind farm projects in our region are at a point where they’re probably not going to be negatively impacted. I don’t think we’re going to be that impacted locally from what I can tell.”