Irresponsible Spending and the Texas Energy Crisis | Citizens Against Government Waste

Irresponsible Spending and the Texas Energy Crisis

The WasteWatcher

During the days and weeks after a winter storm hit Texas on February 11, dozens died, millions were without power, and nearly half of the state’s residents were forced to boil their water.  The storm may become the worst disaster in the state’s history, surpassing Hurricane Harvey, which caused $125 billion in damage. 

The Electric Reliability Council of Texas (ERCOT) operates most of the state’s electrical grid and manages the market for around 75 percent of the state.  Its system is independent of the rest of the country and therefore could not use the national grid for help during this crisis, which is also true for future crises. While ERCOT is a nonprofit entity, it is still subject to oversightby the Public Utility Commission of Texas and the Texas Legislature. Hearings are already being held to determine how ERCOT should be held accountable for its blackouts and outages before, during, and after the storm.

Rep. Jared Patterson (R-Frisco), who is an energy industry professional, introduced HB 1951, a bill that would ensure that financial costs of the unreliable energy in Texas are placed on energy generators, rather than forcing Texas citizens pay subsidies to energy companies that will increase their tax burden.  In a press release announcing the introduction of HB 1951, Rep.  Patterson stated, "The situation from this week in which the Texas grid lacked sufficient power to provide necessary utilities to consumers was absolutely avoidable, and those with their hand on the switch will be held accountable. I understand that wind is not the sole cause of this issue, but it is one of the fundamental reasons that our market does not have sufficient generation capacity. As the ninth largest economy on Earth, it is past time to eliminate subsidies to the Green New Deal programs. Texans will no longer support, financially or otherwise, companies who cannot perform when they are desperately needed.”  

Another cause of the lack of power was the failure to utilize a taxpayer-subsidized biomass power plant in Austin.  In 2008, the manager of the city-owned energy company, Austin Energy, mapped out a plan with the Austin City Council to achieve certain renewable energy goals. The council agreed that taxpayers should fund a $2.3 billion contract for 20 years to develop the Nacogdoches Generating Facility and use the biomass energy the plant produced. 

In April 2019, the Austin City Council spent $460 million to buy out the biomass power plant contract in Eastern Texas to get out of the contract; $128 million had already been spent to build it and $54 million every year was being spent to maintain the facility.

The biomass power plant originally operated year-round until 2020 when the city reduced its operations to between May 15 to October 15.  The failure to use the plant during the winter storm caused problems for about 20,000 homeowners.

Paul Robbins, an environmental activist, stated that while he did not know how much time was needed to prepare the plant, he believed that it should be used for emergencies like the recent winter storm.  He said, “Maybe ERCOT thought they had it under control, and maybe it was not possible given the short emergency time, but it would seem to me that this (power plant) should be on call in emergencies like this.” 

Texas has a unique energy model that some other states are trying to emulate.  However, Ike Brannon, a senior fellow at the Jack Kemp Foundation, stated there are problems with the Texas model including miscalculations with wind turbine operators not adapting the turbines for the cold, natural gas producers not taking any measures to ensure that pipes did not freeze up, and power plants that usually run only during the summer being offline.  

The state should not suffer by having citizens pay for the subsidies of energy companies and projects, which led to the power outages during the winter storms in Texas.  These subsidies hurt Texans instead of helping them, especially since there is no obligation to provide reliable power tied to the funding.  States need to consider what happened with Texas before following its subsidized energy model.

Former Energy Secretary and Texas Governor Rick Perry called walking away fossil fuels and nuclear power a ‘recipe for disaster.’  He said, “Last week in Texas as people were losing their power, thank God we had fossil fuels in this state because if all we had had was the AOC Green New Deal plan, wind and solar, we would have had a massive disaster on our hands. As it was, fossil fuels are what really saved the day.”

Texas Public Policy Foundation Vice President Chuck DeVore made the same arguments as Rep. Patterson and Gov. Perry, noting that overbuilding wind power in Texas and favoring unreliable renewable sources of energy over reliability coal, gas and nuclear has “caused the grid to become increasingly at risk of blackouts at times when nature doesn’t cooperate.  As America builds more wind and solar – with a renewed push from the Biden administration – the costs to prevent blackouts will mound in the form of massive battery farms to store power or increasingly large numbers of backup gas power plants.  Instead, we should end subsidies for all energy sources while making wind and solar pay for the reliability costs they impose on the grid.” 

Subsidies and irresponsible spending are two of many reasons why states and the federal government should not implement the Green New Deal or other similar ideas.  Renewable energy mandates are unachievable and costly, and they both fail to provide energy when needed, and fail to help the environment.