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Texas Senate Votes To Add More Natural Gas Capacity To Fix Grid Issues

The Texas Senate voted this week to add more natural gas-fired capacity to the state grid to add more reliable power to the Electric Reliability Council of Texas (ERCOT) and make it ready to meet demand in any circumstances.

Since Winter Storm Uri crippled the Texas grid in February 2021, leaving millions of Texans without power for days in freezing temperatures, the legislature in the Lone Star State has been working to ensure that such an event will not happen again.

While the Texas power grid managed to avoid catastrophic failures during Winter Storm Elliott just before Christmas in 2022, ERCOT had underestimated power demand.

“ERCOT is keeping up with demand, but it looks like ERCOT way underestimated how much power Texans would use in the freeze. They were off by about 10,000 megawatts tonight - enough electricity to power 2 million homes,” Houston Chronicle’s Shelby Webb said on December 23.

Now the passing of Senate Bill 6, part of the grid reform package, establishes the so-called Texas Energy Insurance Program, outside of the competitive market, to operate 10,000 megawatts (MW) of natural gas or similar sources to ensure sufficient power is available at all times.

Senate Bill 6 also creates a low-interest loan program to maintain older dispatchable generation plants, similar to the State Water Implementation Fund for Texas (SWIFT) for water infrastructure, according to a statement from the office of Lt. Gov. Dan Patrick.

“This is not a tax on ratepayers. This is a smart usage of our multi-billion dollar budget surplus that will save ratepayers money over time by reducing interest rates from 6-7% to 0% for the financing of new generation plants,” the statement says.

Lt. Gov. Dan Patrick noted, “Since Winter Storm Uri, I have been abundantly clear that we must bring new dispatchable generation (primarily new natural gas plants) online as soon as possible to make sure that Texans have reliable power under any circumstance. The Senate’s grid reform package levels the playing field between dispatchable and renewable energy sources by elevating dispatchable energy sources to put ratepayers first.”

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By Charles Kennedy for Oilprice.com

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