The legislation, known as Senate Bill 7, seeks to finance the construction of a fleet of new and mostly gas-fueled power plants.
The legislation is part of a larger package of attempts to shore up the creaky state grid by encouraging more on-demand or “dispatchable” generation, as The Hill reported.
Under that broader package, these plants would be financed by making electric utilities help pay for them — costs that critics fear could be passed onto customers.
That’s why state Rep. Todd Hunter (R) introduced Senate Bill 7, which aims to set some boundaries within that full package. The bill would limit the costs that could be transferred to ratepayers to a maximum of $1 billion.
“If you go forward without S.B. 7, it will cost your taxpayers $9 to $15 billion a year,” Hunter told House members earlier this week, accusing utilities of trying to swindle the state.
“They should have called this the sugar daddy bill,” he added.
Oil companies and green groups have come together in an unlikely alliance in support of the proposed $1 billion cap.
Conservation groups like the Sierra Club and the Environmental Defense Fund are sandwiched between two frequent foes: the Texas Oil and Gas Association and Texas Chemical Council.
That’s caused bemusement on all sides.
The green groups agree on capping the amount that can be spent on building out more fossil fuel infrastructure, but so do the state’s oil and gas and petrochemicals industries. As some of the state’s biggest energy buyers, they stand to bear the brunt of any runaway costs.
When the Texas director of the Sierra Club saw the three organizations listed together on a statement of support for the bill, “he almost lost it,” according to Cyrus Reed, a conservation director for the group.
“Just want to be clear we will still sue refineries when they violate air quality laws, but we agree on keeping electric costs low for consumers large and small!” Reed tweeted.
Hunter shared similar surprise on the House floor: “I can’t believe I’ve got the Sierra Club and [the Texas Oil and Gas Association] on the same bill,” he said. “I had to go re-read the bill to make sure I was still for it!”
It’s a thin point of agreement. The broader package — which relies on a complex credit system to incentivize on-demand fossil fuel generation — has generated skepticism among Democrats and green groups.
The funding mechanism would require power producers that Texas deems unreliable — such as wind and solar providers — to pay into a system of tradable credits in exchange for setting up on-demand plants.
But Democrats like state Rep. Chris Turner have argued that such a mechanism could build up costs without boosting reliability.
Colin Leyden, with the Environmental Defense Fund’s Texas arm, echoed these sentiments, tweeting on Tuesday that the new funding mechanism “is the wrong policy to fix our grid.”
Nonetheless, Leyden shared some positive words for S.B. 7 and its unlikely ability to unite two factions that don’t typically see eye to eye.
“It’s meaningful when groups with such different priorities come together on an issue,” Leyden said.
