EDF Backs Texas Demand Side Energy Laws

by | Apr 10, 2013

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As economic growth continues to surge in Texas and the state suffers the effects of a shrinking water supply, growing population and rising summer temperatures, the Lone Star State urgently needs to approve energy policies aimed at reducing customers’ reliance on the grid and fossil fuels in order to retain and attract new businesses – and to simply keep the lights on, according to a report by the Environmental Defense Fund.

The ongoing drought puts Texas’ power plants at risk, threatening a return of the rolling blackouts caused by extreme winter conditions in 2011, according to The State of the Energy Crunch in Texas. Fortunately, EDF says, many of the solutions that are available also benefit people and the environment. The report suggests solutions like customer, or demand-side, resources such as demand response initiatives, which allow customers to voluntarily reduce peak electricity use and received a payment for doing so in response to a signal from their utilities, energy efficiency programs and increasing renewable energy sources like solar and wind.

A report by independent system operator the Electric Reliability Council of Texas suggests that the potential for achievable participation in demand response is 15 percent of capacity in Texas, making it the state with the most achievable potential energy from demand reduction potencial, EDF says.

The report also provides an overview of Texas legislation currently being considered by several committees in Texas’ 83rd legislature. Specifically the EDF supports the following recommendations for the 83rd legislative session:

1. Allowing all customer classes to participate in electric markets either directly or through aggregators as is done in other markets in the US.

2. Fair compensation for consumers that provide services including demand response and excess electric generation from distributed, renewable generation.

3. The development of financing mechanisms like Property Assessed Clean Energy to enable businesses to develop clean energy and reduce water usage.

In October last year, the Public Utility Commission of Texas unanimously voted to double the price cap for wholesale electricity over the next three years, in a move aimed at encouraging investment in new generation. The PUC voted to raise the the cap to $5,000 a MWh on June 1, 2013, $7,000 a MWh on June 1, 2014, and $9,000 a MWh on June 1, 2015.

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