A divided Texas confronts its power woes

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Jan 23, 2023 View in browser   By Arianna Skibell Presented by Natural Allies for a Clean Energy Future The Texas Capitol in the early hours of Feb. 15, 2021, amid extreme weather and forced power cuts. | Bob Daemmrich/ZUMAPRESS/Newscom Texas' grid is at a crossroads. Despite a statewide boom in wind and solar energy and a windfall of federal dollars to support battery storage technology, Texas regulators are moving forward with an untested plan that could add more natural gas to its power grid, writes POLITICO's E&E News reporter Jason Plautz. The push comes as the nation's top energy-producing state struggles to shore up its grid after a deep freeze in 2021 led to rolling power outages and the deaths of more than 200 people. A storm near the end of last year also saw some renewable and natural gas resources go offline, though the lights stayed on thanks to some reliability improvements. And the risks are only mounting. Demand for electricity in Texas is rising as the climate crisis threatens to bring more extreme heat and cold, further straining the grid. The fact that Texas' grid is isolated and does not share energy resources with other states only heightens its vulnerability. State regulators have proposed a framework that would create a novel system for adding power sources like natural gas, nuclear or battery storage to the grid during times when demand is high and planned supply is running out. It would require electricity companies to buy credits from power generators for the hours every year that demand exceeds supply. That would offer generators additional revenue to invest in energy sources that could be tapped in any kind of weather, including new or existing fossil fuel power plants. Skeptics fear that the plan could raise prices for consumers without guaranteeing reliable power during a crisis. Plus, the mechanism has never been used before, which has some analysts worried and other critics downright irate. "It's unacceptable," Republican state Sen. Charles Schwertner said on Twitter. He called the market redesign "a costly and complex proposal that is unlikely to deliver the dispatchable generation resources that Texas needs." The market analysts who initially proposed the new mechanism said that wind and solar would continue to grow under the plan, making up 50 percent of Texas' power supply by 2026. But some environmental groups contend that the proposal offers a cash cow for long-standing fossil fuel producers that won't actually fortify the grid. The plan is nowhere near final. It still requires approval from the state House and Senate, where — if Schwertner's tweet is any indication — the reception may be frosty.   It's Monday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net.   A message from Natural Allies for a Clean Energy Future: Let's get to work on reaching climate goals faster. With the power of clean natural gas, we can power our future reliably and affordably. Let's change the future today, together. Learn how natural gas partnered with renewables is accelerating our clean energy future at www.naturalalliesforcleanenergy.org.   Listen to today's POLITICO Energy podcast Today in POLITICO Energy's podcast: Catherine Morehouse breaks down how Sen. Joe Manchin is exerting influence on the Federal Energy Regulatory Commission. Inflation Reduction Act They didn't vote for it, they don't like it and they're working to undermine it — but Republicans are reaping the benefits of Democrats' climate law, write Kelsey Tamborrino and Josh Siegel. In the five months since the Inflation Reduction Act became law, companies have announced tens of billions of dollars in renewable energy, battery and electric vehicle projects that will benefit from incentives in President Joe Biden's signature law. Roughly two-thirds of the major projects are in districts whose Republican lawmakers opposed the Inflation Reduction Act — prompting a tricky balancing act for GOP messaging.   A message from Natural Allies for a Clean Energy Future:   Power Centers John Kerry, U.S. climate envoy, speaking at the World Economic Forum in Davos, Switzerland. | Markus Schreiber/AP Photo The offset gambit New outlines of a hotly debated carbon credit initiative involving the U.S. government and two major philanthropies are raising questions about its ability to generate money while lowering emissions, write Jean Chemnick and Sara Schonhardt.  Those come as the program's organizers seem to disagree about whether it is, in fact, a carbon offsets program. Farm bill's rough road New House Agriculture Chair Glenn Thompson begins faces significant challenges to make the the 2023 farm billbipartisan while managing pressure from his own party's right flank, writes Marc Heller. Issues such as climate change and low-income nutrition programs are likely targets for the party's most conservative members, and the Pennsylvania Republican has little room to maneuver with a thin majority. Oil concerns spill over COP The U.N. has sent a series of inquiries about the United Arab Emirates' decision to appoint the head of a state-owned oil company to lead global climate talks set to take place in Dubai this year, write Federica Di Sario, Gian Volpicelli and Karl Mathiesen. The secretariat of the United Nations Framework Convention on Climate Change is inquiring about whether the presidency will be independent of the oil company. in other news Exxon knew: The oil major's predictions about the climate crisis may have increased its legal peril. Post-Trump: Despite an injection of funding, a "traumatized" Environmental Protection Agency has still not recovered from the exodus of scientists and policy experts under former President Donald Trump. In the weeds: An unexpected barrier is preventing American small towns from accessing federal climate funds.   JOIN POLITICO ON 2/9 TO HEAR FROM AMERICA'S GOVERNORS: In a divided Congress, more legislative and policy enforcement will shift to the states, meaning governors will take a leading role in setting the agenda for the nation. Join POLITICO on Thursday, Feb. 9 at World Wide Technology's D.C. Innovation Center for The Fifty: America's Governors, where we will examine where innovations are taking shape and new regulatory red lines, the future of reproductive health, and how climate change is being addressed across a series of one-on-one interviews. REGISTER HERE.     Subscriber Zone A showcase of some of our best subscriber content. Republicans hope to unseat Sen. Joe Manchin (D-W.Va.) next year. | Francis Chung/E&E News Here are the three Republicans who could take Sen. Joe Manchin's seat as the political leanings of West Virginia shift to the GOP's favor. The E.U. antitrust chief Mario Monti warned that easing state aid rules to help European industry compete worldwide is a "dangerous" approach. Federal judges called for energy regulators to explain why processing rate complaints takes so long — delays the court said are costing customers "hundreds of millions of dollars." That's it for today, folks! Thanks for reading.   LISTEN TO POLITICO'S ENERGY PODCAST: Check out our daily five-minute brief on the latest energy and environmental politics and policy news. Don't miss out on the must-know stories, candid insights, and analysis from POLITICO's energy team. Listen today.       A message from Natural Allies for a Clean Energy Future: Everyone is focused on the next generation, and it's time to get real about climate change. Let's get to work and cut emissions now by investing in clean natural gas infrastructure. Natural gas is the best way to reach climate goals faster and power our future reliably and affordably. Natural gas, partnered with renewables, will power our world today — while laying the groundwork for tomorrow. Learn how natural gas is accelerating our clean energy future at www.naturalalliesforcleanenergy.org.     Follow us on Twitter Arianna Skibell @ariannaskibell   Follow us

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