Study says Texas failing to save on power costs
Electricity consumers in Texas could save nearly $5.5 billion over the next decade if Texas regulators and utilities did a better job of integrating distributed energy resources such as backup generators, rooftop solar and batteries to reduce the need for building expensive peak power generation and transmission projects, according to a new study.
The Austin trade group Texas Advanced Energy Business Alliance estimated that Texas households could save an average of $456 over a decade if Texas did more to integrate backyard solar panels and quick-start natural gas micro turbines into transmission and distribution planning and allowing smallscale generators to participate in wholesale markets.
The small natural-gas-powered generation units
are the newest fixtures behind grocery stores, gas stations and factories as backup power generation. Many companies invested in the units to keep food cold and cash registers and manufacturing processes operating during storms and power outages. Other companies turn to backup power during times of peak electricity demand when companies are paid to reduce their power consumption from the Texas grid.
Companies in Texas are installing backyard backup power at such a rapid pace that state regulators are having a difficult time keeping up with how much generation might be available during periods when demand threatens to outstrip supplies. One estimate by the Boston consulting firm the Brattle Group is that by the end of 2018, Texas had about 1,300 megawatts of distributed energy resources. One megawatt is enough to power about 200 homes during a hot summer day in Texas.
But the planning process and market rules in Texas were designed for large generators and industrial customers and present barriers for small-scale generators from participating, according to the study. Consequently, Texas is missing opportunities to lower consumer costs.
Black box
The research found that Texas utilities don’t operate with enough transparency when planning distribution systems that connect to high-voltage transmission lines to deliver electricity to household and business customers. Planning is done behind closed doors, and then the investments are recovered during rate hearings, leaving no opportunity for other technologies and more cost-effective options to be considered, said Suzanne Bertin, managing director of the alliance.
“It’s a black box,” she said.
CenterPoint Energy, the regulated utility responsible for distributing power from generators to customers in the Houston area, said the company will facilitate easier and safe interconnection of private renewable energy resources with the smart grid as distributed energy grows.
The Public Utility Commission said it will work to integrate emerging technologies into the state’s power grid.
The state’s grid manager, the Electric Reliability Council of Texas, did not comment.