A free-market energy blog
Random header image... Refresh for more!

Category — Texas wind issues

Texas Wind Power: New Record, Bad Economics (and capacity inhibiter for future reliability)

“Renewable energy subsidies harm the reliability of Texas electricity markets by resulting in artificially low sales prices, victimizing conventional energy generators and investors. Why build a new gas-fired plant when spot prices might be below production cost because wind receives a $0.02/kWh federal production tax credit?”

Last month, a cold front propelled Texas to a new record for wind power, according to the Electric Reliability Council of Texas (ERCOT). Wind-generated electricity provided 9,481 MW on Feb. 9, almost 28 percent of the power generated in ERCOT at that time. This surpassed the previous record of 8,667 MW set only two weeks earlier.

Hold the applause. These records are being set because of Texas’s renewable-energy mandate–the strictest in the nation–and a raft of special tax subsidies. This government largesse harms taxpayers, consumers, and businesses as documented in a study released by the Texas Public Policy Foundation (TPPF) last November.

Here are some key points to keep in mind when thinking about renewable energy and related subsidies: [Read more →]

March 12, 2013   6 Comments

Texas’s Solyndra: Will CREZ Launch Cruz to the U.S. Senate? ($7 billion wind transmission project a defining intra-Republican issue)

“The state’s Public Utility Commission, or PUC, approved the CREZ concept in 2008 in response to a directive [mandate] from the [Texas] Legislature in 2005.”

- Kate Galbraith, “Texas’ Wind Transmission Project Keeps Rolling,” The Texas Tribune, September 8, 2010

“Lt. Governor David Dewhurst was the largest recipient of [CREZ] contractor funds with $419,250 from January 2005 through February 2010. …. The CREZ project has turned out to be a money-making opportunity for many politicians and companies.”

- Dan Byfield, “The Politics of Transmission Lines.”  San Angelo Standard Times, June 29, 2010.

A political fight of national import is on in Texas for the U.S. Senate between Tea Party favorite Ted Cruz and Republican-establishment favorite David Dewhurst. Voting this week has put these two in a runoff come July 31st for the Republican nomination. The winner between newcomer Cruz and Lieutenant Governor Dewhurst is widely expected to beat the Democrat on November 6th. [1]

Candidate Dewhurst has some explaining to do to those of us who advocate free-market capitalism in place of political capitalism (aka crony capitalism). Obama has his Solyndra, the busted solar company to which Obama’s DOE lost $535 million; Dewhurst has CREZ. On paper, at least, CREZ is a thirteen-times-bigger problem for Texas ratepayers than Solyndra turned out to be for federal taxpayers.

CREZ, which stands for Competitive Renewable Energy Zones, is a $5 billion-turned-$7 billion project to get (uneconomic) wind energy from nowhere (where the wind regularly blows) to somewhere (population centers). Some of the wind capacity the line is counting on to carry may never be built due to the low cost of natural gas. [2] It will cost every Texas electricity ratepayer north of $5 per month for years to come on each electricity bill.

Critics may call the surcharge the Dewhurst electricity tax before this election is over. After all, it was under his direction that the Texas senate in 2005 enacted the mandate to launch CREZ. [3] [Read more →]

June 1, 2012   6 Comments

Texas Windpower: EU Energy, Enron Legacy

Texas and Europe don’t have a lot in common. But when it comes to government support for renewable energy, the Lone Star state has followed the same course as many European nations.

In the late 1990s, while the European Union was urging member nations to adopt targets for the percentage of their energy produced from renewable sources, Texas enacted a renewable portfolio standard (RPS) mandating that the state’s competitive electric providers buy a minimum 2,000 MW of qualifying renewable energy by 2009. The purchase mandate was part of a broad electricity restructuring bill sponsored by Enron Corp., parent of Enron Wind Corporation, a story detailed elsewhere at MasterResource.

The Texas Legislature, with the support of Governor Rick Perry, later increased the RPS to 10,000-MW by 2025. Texas met this target for installed wind capacity in 2010, a full fifteen years ahead of schedule. Subsequent attempts to increase the mandate, and to carve out a solar mandate, have been repulsed by a more free-market legislature.

Almost all of this renewable generating capacity comes from wind, and in particular from industrial wind parks in the rural West Texas. Texas is currently one of the world’s largest producers of wind energy, and home to the largest single wind facility in the world, the 781-MW Roscoe Industrial Wind Park.

Appendage Energy

In practice, Texas windpower offers much less energy than first appears. Texas’s wind farms are concentrated in the Texas Panhandle, far from the focus of the state’s electricity demand along the I-35 corridor. In addition, Texas wind tends to blow hardest at night and during off-peak (non-summer) months, when there is less overall demand absent air conditioning load. [Read more →]

February 9, 2012   14 Comments

Texas Wind Power (CREZ) Line Busts Its Budget (Blame Perry, not Obama)

[Ed. note: Previous posts at MasterResource have documented the landowner and budgetary problems of the Competitive Renewable Energy Zone (CREZ) transmission line.]

The cost of building transmission for expensive wind power in Texas is coming in nearly 40 percent higher than initially promised. Instead of $4.9 billion, as estimated in 2008, the transmission lines are now expected to cost $6.8 billion, according to a report prepared by the RS&H infrastructure consulting firm for the Texas Public Utility Commission.  This amounts to approximately $800 per household in the state, or at least $5 per month per ratepayer.

Cost Gaming

The report states several factors caused the initial underestimate of transmission line construction costs. For example, the initial estimate assumed transmission lines would be built in direct, straight lines from point to point. However, the new report notes transmission lines must often follow roads, fences, terrain features, or property lines instead of direct lines between two connecting points.

The initial cost estimates also failed to account for inflation and financing costs on loans to build the transmission lines.

The report warns the final price tag could rise still higher by the time the project reaches its estimated December 2013 completion date.

More Intervention; Good Money after Bad

The $800 per-household expenditure is merely the cost of building the transmission lines. Wind power is more expensive to produce than conventional power sources, so Texas consumers will also pay electricity premiums every year.

“This is the kind of situation that only happens when government mandates a technology that is not very useful and it’s too expensive for the market,” said Sterling Burnett, a senior fellow with the Dallas-based National Center for Policy Analysis. [Read more →]

November 10, 2011   7 Comments

Rick Perry’s $7 Billion Problem (Texas wind transmission project 38% over budget–$270+ for every citizen in the state)

“He has been a stalwart in defense of wind energy in this state — no question about it.”

- Paul Sadler, executive director of the Wind Coalition, quoted in Kate Galbraith, “As Governor, Perry Backed Wind, Gas and Coal,” New York Times, August 21, 2011, p. 21A.

Texas curtailed electricity customers this Wednesday in the face of abnormally high temperatures and insufficient capacity. And as is to be expected this time of year, windpower is producing at its yearly lows–on Wednesday, about 9 percent of capacity (880 MW out of nearly 10,000 MW capacity), down from 18 percent earlier in the week.

As Texas revs up mothballed plants, one can only imagine how much state-of-the-art, high-utilization capacity the state could have ‘bought’ instead of wind power, which produces most of its juice when it is not needed.

CREZ Transmission Project

New transmission to rescue wind power that cannot reach the cities? That introduces another problem–wildly uneconomic costs where good money has been thrown after bad.

The Competitive Renewable Energy Zones (CREZ) line, authorized in 2005, began at just under $5 billion and is now estimated to cost $6.8 billion upon completion in 2013. This bill comes to $270 for every Texas citizen—man, woman, and child—and counting.

Governor Rick Perry has a lot to do with the project. According to Texas’s State Energy Conservation Office: [Read more →]

August 26, 2011   16 Comments

The Great Texas Wind Swindle: Environment, Step Aside (Part II)

Editor Note: Part I yesterday examined the property-right and economics problems with Texas wind development.

“The government is using corporations as its arm. They’re not just destroying my land; they’re destroying my heritage. I was taught for as long as I can remember to be a good steward of the land. Now the government has given this company the right to take what they want and do whatever they want with it. Believe me, what they want will damage my land forever. It makes me feel helpless.”

- Mark Cadra, a Wheeler County rancher along CREZ route

As discussed yesterday, Texas landowners are fighting against eminent domain associated with a $4.9 billion (and counting) transmission line project to get the state’s wind generation from nowhere to somewhere. This project is hardly essential and is a case of throwing good money after bad. And government intervention begets more government intervention in the case of securing access to private land.

Land Grab

While projects such as the The Competitive Renewable Energy Zone (CREZ) line are legally obligated to do environmental impact studies, Cross Texas Transmission (CTT) may have opted to instead pay mitigation to the U. S. Fish and Wildlife Service. If so, these monies will likely be used to transfer more land from private ownership into the vast domain now ceded to the federal government. Private land owners generally see this as a system of payoffs that exempts favored companies or political backers from the requirements of the law.

“While no one knows the exact amount, it is reported that Texas remains nearly 97 percent privately owned and that’s a fact the federal government would like to change,” Dan Byfield, CEO of American Stewards of Liberty stated. “When companies like Cross Texas come along, federal land agencies see opportunities to charge fees or collect mitigation that brings huge sums of money into their agency to either regulate private landowners or buy up privately held land.”

Unlike Texas, the national statistics are grim. Federal ownership of land has now reached the 40 percent mark with the latest land grab device being conservation easements. Still, agencies like the U.S. Fish and Wildlife Service argue that government-owned property is entitled to greater protection under the law. [Read more →]

March 9, 2011   6 Comments

The Great Texas Wind Swindle: Property Owners vs. the State (Part I)

Editor Note: Sam Pakan (full biography below) is a rancher and writer living in Wheeler County, Texas. Part II discusses the environmental controversy regarding Texas’s latest wind development push.

The eastern Texas Panhandle, a land of rolling sand hills, tree-lined creek beds and tall grass vistas, may seem a desolate place to outsiders. Still, it has its beauty, especially to the cattle ranchers and wheat farmers who work and live on it. But not for long.

Much of this land–the fragile habitat of the Lesser Prairie Chicken and the Whooping Crane–is scheduled to become industrialized if the Texas Public Utility Commission (Texas PUC), the Department of Energy (DOE) and Federal Energy Regulatory Commission (FERC) have their way. Incongruously, the demolition of this mostly native grassland is being proposed in the name of green energy. And this project is wholly government-dependent in a sector where suppliers do not have to be taxpayer enabled.

The Competitive Renewable Energy Zone (CREZ), a name not without irony, was initiated by $10 million from DOE. In December of 2009, plans were expanded when Secretary Chu joined Jon Wellinghoff of FERC in a Memorandum of Understanding to coordinate efforts to interconnect several transmission lines. The CREZ line, part of the larger Electrical Reliability Council of Texas (ERCOT) system, is to help supply the Dallas/Fort Worth Metroplex with wind-generated electricity from the northern Texas Panhandle.

There are problems, however, with the multi-billion-dollar nowhere-to-somewhere transmission project. Protests from disgruntled landowners have greeted Cross Texas Transmission (CTT), the developer of the Gray-to-Tesla and Gray-to-White Deer lines.

Fanning that resistance, landowners received a “Access Consent Form” the day before Thanksgiving insisting that their lands be made available for survey. With the long weekend, landowners had only two working days to find representation, prepare a response, and still meet CTT’s deadline. [Read more →]

March 8, 2011   16 Comments