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Texas's "Solar Session" Fails to Enact Renewable Mandate #3 (a reality check for a federal RES?)

“We can push solar, and that’s great. But somebody’s got to pay for it. You can’t have those who can barely afford their energy bills subsidizing it.”

- Texas Rep. Sylvester Turner, quoted in the Houston Chronicle

The Houston Democrat made a national statement, not just statewide one, in reference to proposed legislation to surcharge ratepayers to subsidize solar roofs. Such sentiment beat back a well-funded effort by national environmental pressure groups and the solar industry. Has the decade-old Enron-launched artificial stimulus to uneconomic, unreliable renewables reached its apogee? Might existing and planned renewable programs enacted at the expense of ratepayers and taxpayers be reconsidered by the Public Utility Commission of Texas and the 82nd Texas Legislature in 2011?

Background

The Texas Legislature, which meets every two years, fell to Enron and environmental lobbyists back in 1999 when the nation’s strictest renewable energy mandate was passed and signed into law by then Gov. George W. Bush. In 2005, the renewable quota was increased again, making Texas the national leader in industrial wind parks–and energy liabilities parading as assets (see here).

So not surprisingly, the national environmental movement and the national renewable business lobby targeted the 81st Legislative Session for major new mandates at the expense of the relatively unorganized consumers and taxpayers. The  opportunity was to increase the renewable mandate a third time–but require non-wind renewables to make Texas the solar capital of the nation (as wind). There were so many solar lobbyists  that the 81st was nicknamed the “solar session.”

Some 69 solar and other renewable-energy bills were teed up by the special interests, and virtually all failed. “This has been a disappointing session,” admitted Luke Metzger, director of Environment Texas. The rejected bills would have: 

  • Increased the renewable quota by 1,500 MW, with solar (rather than wind) targeted for a “Emerging Technology Renewable Standard”;
  • Created a $500 million solar incentive program; and
  • Forced utilities and retail electric providers to pay consumers “fair buyback rates” for excess electricity generation from renewable energy.

Cost-inflating energy-efficiency mandates were defeated as well that would have:

  • Raised the state’s minimum residential and commercial building codes from 2001 to 2009 standards;
  • Increased utility efficiency goals;
  • Adopted appliance efficiency standards for a variety of products, including pool pumps;
  • Required performance energy efficiency building standards for state buildings, including universities and public schools.

To be clear, to the extent that consumers wish to voluntarily invest in energy efficiency, they can do so. To the extent that consumers wish to erect solar panels, they can–unless prohibited by their homeowner associations.  Mandates or ratepayer cross-subsidies–where some involuntarily pay for the actions of others–is wholly another issue.

A Failed Effort by “Bootleggers and Baptists”

The Sierra Club, Environmental Defense Fund, and  Public Citizen, among other state and national groups, were camped in Austin. The solar industry was out in force, led by Enron-ex John Berger, CEO of Standard Renewable Energy. (Berger is also involved in Repower Texas, the Al Gore project that kicked off here in Houston last week.)

The solar lobby threw everything they had into the effort, including a television advertising campaign described in this press release by Environmental Texas:

TV Ad Campaign to Build Support for Solar Power in Texas State Legislature

Three leading Texas environmental organizations announced a new television advertising campaign today aimed at getting the Texas Legislature to support measures to make Texas a world solar leader. The commercials will run for a week in the Abilene, Dallas/Fort Worth, Tyler/Longview, and Wichita Falls viewing areas and call on the Legislature to support incentives to install solar panels on the equivalent of a half-million Texas rooftops by 2020. The ad can be viewed here.

“Texas has the right stuff to be a world leader in solar power, producing clean energy that will create tens of thousands of jobs and reduce pollution” said Environment Texas Director Luke Metzger. “But with other states moving aggressively to court the solar industry, we have a narrow window of opportunity to act. The Legislature should invest in making Texas the Silicon Valley of solar energy.”

Environmental Defense Fund Regional Director Jim Marston added, “To ensure that Texas gets the green collar jobs we deserve from solar power, we need to show national leadership. We did that with our original wind renewable portfolio standard, saving Texans money along the way, and we can do the same if we have a renewable portfolio standard for solar power now.”

“Texas needs a statewide rebate program to make it easier for homeowners and businesses to go solar,” said Tom “Smitty” Smith, Director of Public Citizen’s Texas office. “This will kick start a solar industry in Texas that will be a major economic driver for the next century and beyond.”

But, as Greenwire (June 1) reported:

Efforts in Texas to create incentives for solar power production died in the Legislature this weekend, dashing industry hopes that the huge, sunny state would see a surge in demand for panels.

Texas legislators could not agree on solar incentives, with last-minute maneuvering this weekend preventing the passage of $500 million in solar rebates. Measures that would have changed the state’s renewable portfolio standard to create extra requirements for solar, biomass and geothermal power had failed earlier.

Solar appeared to be on such a roll that the flood of bills in the Legislature led some to dub it the “solar session.” But the cost of the proposed rebates — although just 20 cents per month on homeowners’ bills — had worried some lawmakers. A separate measure that would have made it harder for homeowners associations to ban solar panels also failed.

The only solar legislation that passed was a measure to let homeowners finance their solar installations with help from the local government, and pay back the cost via extra property taxes over 20 years….

Reported Kate Galbraith in a blog for the New York Times:

Texas’s efforts to create incentives for solar power production are dead, dashing the industry’s hopes that the huge, sunny state would see a surge in demand for panels.

Legislators in Texas could not agree on solar incentives that were expected to spur the industry.

Last-minute maneuvering this weekend at the end of the state legislative session prevented the appropriation of $500 million for solar rebates. Efforts to change Texas’s renewable portfolio standard to create extra requirements for solar, biomass and geothermal power had failed earlier.

Solar had previously appeared to be on a roll, and so many bills flooded the state legislature this session that it was sometimes called the “solar session.”

“Is that how hope dies? With a whimper and a bang of a gavel?” wrote one disappointed environmentalist on Twitter.

Texas leads the nation in producing wind power but it is not even in the top ten for producing electricity from the sun, despite being the second-most populous state. (California, with the largest population, is the solar leader.) …

John Berger, the chief executive of Standard Renewable Energy, a Houston-based solar installer, said in an e-mail message that the failure of the solar legislation would have a “bad impact” on the state. He had previously told Green Inc. that the rebates could provide a major boost for business, as had another Texas installer, Meridian Solar.

A number of manufacturers, including Suntech Power and SunPower, have been watching Texas’s solar moves and evaluating the state as a possible site of manufacturing plants. Whether the legislative failure would affect their decisions was unclear, but Mr. Metzger was pessimistic.

“Texas will lose out on major opportunities for solar manufacturing,” he predicted.

Already this spring, a Texas solar start-up announced plans to move its headquarters to New Mexico and also open a manufacturing plant near Albuquerque, citing better incentives there.

The legislature in Texas, like a handful of other states, meets only every two years. So unless the governor calls a special session, solar incentives will not be considered again until 2011.

In  a previous MasterResource post, “A Texas-Sized Energy Problem: Republicans, Democrats, and ‘Baptists & Bootleggers’ Running Wild in the Lone Star State (Obama sends his thanks),” I speculated:

As reported by Russell Gold in yesterday’s Wall Street Journal, Texas, which has the strictest renewable energy mandate in the country, is about to increase its quota for the third time. Now the wind capital of the U.S., Texas’s new law would make the state the leader in solar power as well. Expensive and intermittent, wind- and solar-forcing will work only to increase electricity rates for captive consumers and reduce reliability on the grid. Taxpayers are on the hook as well.

After all, the whole solar industry was putting everything they had into it, as were environmentalists such as Ken Kramer (director of the Lone Star Chapter of the Sierra Club); Jim Marston (director of the Texas regional offices of Environmental Defense Fund); and Tom “Smitty” Smith (director of the Texas office of Public Citizen). Their Earth Day opinion-page editorial in the Houston Chronicle boldly opined:

Texas citizens get it…. State legislators can get it too. This session, they have an opportunity and responsibility to save us even more money on our electricity bills, create thousands of green jobs and reduce pollution across the state. Our representatives now have less than six weeks to pass the best of nearly 100 bills that have been introduced on clean power and green jobs. These energy efficiency and renewable energy bills set the stage for rebuilding, repowering and renewing our state’s economy during tough times. They will build a sustainable future for Texas.

Well no, the Texas legislature didn’t “get it” (a Jeff Skilling term from the Enron era), and Texas citizens are just fine without higher bills.

 The Good Guys

Two pro-freedom groups, the Texas Public Policy Foundation and the Texas chapter for Americans for Prosperity, were carrying the flag for consumers on a variety of issues, only one being energy. They were spread thin and were no match for the environmental lobby and the 500+ member Texas Renewable Energy Industries Association. The Texas Association of Manufacturers, however, while conflicted by the “green jobs” argument for subsidized solar, acted in the end as a consumer and for consumers.

The energy interventionist coalition is looking ahead to the 82nd session in 2011. But so are pro-consumer, pro-taxpayer, pro-free market groups who realized that they dodged a bullet this year. The battle is finally joined.

Appendix: Summary from Environment Texas

“Texas Legislature Advances Clean Power and Green Jobs, but Loses Steam in Political Wranglings”

(Austin)  Senate and House members from both political parties showed unprecedented support for developing more renewable energy and energy efficiency in Texas by filing a large number of clean power, green jobs bills in the 81st Texas State Legislature. A number of major bills passed either the House or the Senate. Ultimately, political disagreements over other issues and over the size and extent of the programs delayed and killed most of these excellent legislative initiatives. 

Environmental groups Sierra Club, SEED, Public Citizen, Environmental Defense Fund, and Environment Texas applaud the passage of some clean energy, green jobs legislation and view the Legislature as having laid ample groundwork for the future.

“The fact that both the House and the Senate passed major legislation on energy efficiency and renewable power with bipartisan agreement shows that Texas leaders are willing and able to develop clean power and green jobs for our state,” noted Cyrus Reed, Conservation Director of the Lone Star Chapter of the Sierra Club. “Nevertheless, leaders were distracted by undue influence from industry interests and by the Voter ID debate which hampered passage of clean energy bills and other more vital areas of legislation.”

“Texas is moving more slowly than a melting glacier toward developing global warming policy.  Rather than implementing already available energy efficiency and distributed energy solutions, Texas’ response to global warming is to develop futuristic industrial-sized solutions. As a result the state has legislation pending that may develop standards for large scale carbon sequestration projects and provide incentives to get companies to develop the technologies,” said Tom “Smitty” Smith, Director of Public Citizen’s Texas office. “On the positive side, the state has passed a study to develop a series of ‘no regrets’ solutions to global warming that the State can achieve at no cost.  Also, the Texas House, especially the House Committee on Environmental Regulation, should be applauded for their more open leadership style this session which lead to far more reasoned and less ideological bills being developed in the committee.”

Clean Power, Green Energy Bills that passed both bodies and will go to the Governor (as this release goes to press):

  • Green fleets legislation to promote low emissions and plug-in hybrid vehicles for fleets of major State Agencies (HB 432);
  • Legislation allowing cities to create financial districts to loan money for renewable power and energy efficiency (HB 1937).
  • Legislation setting a ‘no regrets’ strategy for greenhouse gas reduction in the State;  a study of the state’s energy use to find ways to reduce our emissions and save money at the same time (SB 184)
  • A coordinated green jobs strategy including funds allocated for child care programs, vocational training initiatives, energy efficiency measures, the Weatherization Assistance Program (WAP), and/or any other recovery funds (passed as a Rider to Article 12).
  • Green fee bill passed allowing governing board of public colleges and universities to institute an environmental service fee once approved by student body election.

“This has been a disappointing session,” said Luke Metzger, Director of Environment Texas. “However, with the passage of HB 1937, we can start the ball rolling on developing Texas’ solar future, working with local communities one at a time to start financing solar and energy efficiency projects.”

Factors which prevented bills with bipartisan support from making it across the finish line:

  • The issue of Voter ID, which put many major efficiency and renewable bills too far down the calendar for consideration in the House;
  • A disagreement over the germaneness and concern over the possible costs to low-income residents of adding the solar incentive bill (SB 545) to the surplus electricity bill (HB 1234), which led Representative Turner to ultimately kill consideration of the bill on the House floor;
  • The election of a new Speaker and the naming of new Committee Chairman understandable led to some delays in getting the committees up and running to begin to consider bills;
  • Disagreement between House and Senate on size and scope of goals set by solar and energy efficiency bills (SB 545 & 546);
  • Disagreement over the potential costs and benefits of the Renewable Portfolio Standard (SB 541);
  • Opposition from the Texas Manufacturers Association, the Governor and many utilities against the Renewable Portfolio Standard.

“We were happy to find some new allies this session including certain members of the legislature and some electric utilities that said they supported renewable energy and energy efficiency legislation,” said Jim Marston, Director of Texas Regional Office of Environmental Defense Fund.  “Sadly, some of the electric companies talked a good game, but their support evaporated when opposed by their affiliated retail electric providers or others in the industry. In the end, the Association of Electric Companies of Texas reverted to representing the interests of the regressive elements of their membership harming the ability of Texas to participate successfully in the new energy economy.

“Moreover, the Texas Association of Manufacturers (TAM) while acknowledging that an expanded renewable portfolio standard was the way to bring clean technology jobs to Texas, distributed false cost information about solar legislation that was repudiated by the PUC and others.  The bottom line, TAM fought legislation that would have brought new manufacturing jobs to Texas,” said Marston.

Nuclear Bills Blocked

Environmental groups blocked bad bills that would have removed citizen rights to contest permits and would have promoted nuclear power in the State which many view as a financial drain from investment in truly clean energy.  

“Nuclear power is expensive, consumes vast quantities of water, comes with serious security and health risks and creates radioactive waste, for which there is no good storage solution. We were happy to block two bad bills this session that were designed to benefit proposed nuclear reactors in Texas” said Karen Hadden, Director of the Sustainable Energy and Economic Development Coalition.

The nuclear bills that were blocked:

  • Fast tracked water permits for nuclear power plants and cut out contested case hearings (HB 2721 was left pending in House Environmental Regulation Committee)
  • Subsidies for proposed nuclear power plants in the form of tax rebates (HB 4525 passed the House and was blocked in the Senate.)

“Representative Flynn’s bill would have fast-tracked water permits for nuclear plants, an outrageous attempt in a time of statewide drought,” said Hadden. “It would also have denied citizens an opportunity to contest issuance of the permits through hearings, an assault on democratic process. The other bad bill that we defeated would have given massive subsidies to nuclear power in the form of tax rebates.”

Miscellany

  • A good bill to address the Compact Loophole for the Andrews County Low-Level Radioactive Waste Dump bill, HB 3423 Lon Burnam did not get out of Committee.
  • Environmental groups *blocked a bad provision that would have fast tracked water permits for “clean coal” plants in the final version of HB 469 and added cleaner emissions standards for those plants.
  • HB 821 passed, requiring television manufacturers that sell televisions in Texas to make free and convenient recycling available.  Texas Campaign for the Environment successfully advocated for this bill.

· Sen. Ellis used a threatened filibuster last night to kill HB 3827 which would have allowed oil companies to evade liability for MTBE water contamination;

· SB 2169 Sets up an interagency working group, co-chaired by the Texas Commission on Environmental Quality, the Texas Department of State Health Services, the Texas Department of Transportation with other agencies to discuss smart growth and make recommendations for developing the state in a sustainable way.

· An amendment to HB 300 creates a certification program for environmental coordinators in Texas Department of Transportation district offices.  This bill is still in conference committee as this release goes to press.

“As it concludes, environmentalists can view this legislative session with some hopefulness – the Legislature is definitely involved and interested in clean energy and green jobs and did move these issues forward.  But there is also some sadness – an opportunity to move significantly forward on clean energy was lost,” Cyrus Reed added. “Jobs that could have been created, and new sources of clean energy that could have been advanced in Texas were delayed this Session.”

7 comments

1 Paul Roberts { 06.09.09 at 9:58 am }

The push for a separate mandate for solar was ludicrous. I have no objection to solar energy and may, in fact, decide to install some myself. However, asking someone else to subsidize it is absurd.
Solar power has some real advantages (providing energy on-peak). The installation of new meters will lead to a pricing regime that raises prives for on-peak demand. That alone will provide additional incentives for solar power – so why create more mandates and subsidies?
Lastly, can you imagine the disputes over claime for damage to solar panels when the next hurricane arrives?

2 Barry Klein { 06.09.09 at 10:08 am }

Next session we will see the same sort of proposals. I would like to see a free market oriented campaign start now to educate and mobilize consumers about plans to raise their cost of living. I believe that this year that has begun, with a fee added to our electric bills to pay for transmission lines from wind farms to the power grid that was mandated in an earlier session of the legislature. Am I Correct?

3 rbradley { 06.09.09 at 10:35 pm }

Yes, $4.9 billion worth, or $4 per month for every Texas electricity ratepayer, like it or not. That’s $48 a year for all ratepayers for a transmission system that no private entrepreneur would ever build short of an inescapable surcharge.

The Texas PUC approved this last summer.

4 rbradley { 06.09.09 at 10:37 pm }

Paul:

Hurricane risk is a major risk for proposed offshore Texas wind farms, an issue that was debated in the 81st session (wind industry trying to get a state subsidy for wind insurance).

One government intervention begets another….

5 Florida, Like Texas, Rejects Renewables Push (solar and sugarcane proposals attract nuclear and offshore drilling tie-in’s in the Sunshine State) — MasterResource { 06.10.09 at 1:01 am }

[...] post at MasterResource described the failure of the 81st Texas Legislature (aka the “solar [...]

6 wildlillie { 06.12.09 at 10:49 am }

The cost per output ratio on solar doesn’t justify its use. We would be much better off giving property tax rebates on residential windturbines and cysterns. Also, the new generation nuclear plants use a fraction of the water and the technology to recycle vertually all waste from nuclear is operational now. What is not talked about by the evironmentalist is the amount of pollution caused by mercury strip mining which is needed in large quantities for solar cells and lithium batteries in electric cars. If we just switched from diesel generators and trucks to natural gas, we would cut the co2 emmisions almost in half at very little cost.

7 Nolan { 06.12.09 at 1:42 pm }

They should look at geothermal. It pays for itself in a short time. It’s explained in an article on this page http://geothermalservice.net/residential_systems.html .

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