The U.S. wind industry can now exhale, as the Texas legislature adjourned without repealing the state's renewable portfolio standard (RPS) and its Competitive Renewable Energy Zones (CREZ) transmission initiative.
The RPS and the CREZ were part of S.B.931, a bill introduced in March by Rep. Troy Fraser, R-Horseshoe Bay. Repealing the RPS would have also severely impacted the market for renewable energy certificates (RECs). RECs – which can be traded or sold on a secondary market – typically supplement project cashflow.
Adopted in 1999, the Texas RPS required 2,000 MW of new renewable energy capacity to be installed statewide by 2009. In 2005, the Texas legislature expanded the program to accommodate 5,880 MW by 2015 and included a target of 10,000 MW by 2025. Texas reached the 10,000 MW plateau in early 2010 – 15 years ahead of schedule.
Ironically, it was Fraser who championed Texas wind energy in its formative days. He reportedly told the Dallas Morning News the following: ‘Mission accomplished. We set out to incentivize and get wind started in Texas, and we far surpassed that goal. There's no state that's come close to what we've done.’
Jeff Clark, executive director at The Wind Coalition, a regional partner of the American Wind Energy Association, notes that the Texas legislature focused on what was working in the state as opposed to making radical changes. Therefore, the chamber opted for the staus quo.
‘Texas has a variety of incentives designed to encourage energy development in the state,’ Clark explains. ‘This year, legislation was filed to target the relatively minor portion of those incentives that encourage renewable energy development. After careful consideration, this legislation was rejected as unnecessary and ill advised."
Despite Fraser's claims, repealing the Texas RPS would have been the latest – and by far, the most damning – in a series of legislative tweeks. During the legislative season, key wind states, such as Kansas, Oklahoma and Nebraska, have altered their renewable energy policies.
Nonetheless, as the session dwindled down, Fraser tried unsuccessfully to amend the CREZ language from S.B.931 to a new bill, H.B.1926, dealing with municipal power.
Fraser then added a CREZ ending amendment to H.B.1926 (a bill dealing with municipal power) while it was passing through Senate on May 31. When the bill was returned to the House, it was sent back to the Senate most likely because some or all of Fraser's amendments were not germane. That bill was then moved back to the House by resolution on May 30 but for all practical purposes, it was dead.
Fraser turned his attention to S.B.776, a companion bill to H.B.1926.
According to a source familiar with Texas politics, when the bill came from the House back to the Senate, Fraser asked for a conference committee where he hoped to add his CREZ language and other amendments. The House then had the opportunity to send the bill to a conference committee, but opted against it. At that point, Fraser was left with two options: accept the municipal power bill as is or let the bill die.
Ultimately, Fraser allowed the municipal power bill to pass without including the CREZ language.Â
‘The RPS and the state's CREZ program have saved ratepayers money, grown rural economies, and made the state more energy-independent,’ Clark says. ‘Thanks to these policies, Texans' energy dollars are staying in Texas, working in Texas.’
‘We applaud those legislators who took time to carefully study these issues and who listened to the public as they voiced their concerns.’