Just in from Luke Metzger of Environment Texas:

I am writing to encourage you to attend an important hearing next week on two rules under consideration at the PUC which could further Texas’ investment in clean energy. The rules would help cut pollution, reduce need for new power plants and help kick-start a solar industry in Texas.

On June 30, the Public Utility Commission of Texas will hold a hearing on proposed rules to increase the requirement on electric companies to invest in energy efficiency and solar power. After the 2009 legislative session concluded, the PUC determined that, despite the failure to adopt clean energy policies (due to the voter ID meltdown), there was clear legislative intent for the commission to move forward administratively. The PUC staff spent almost a year meeting with stakeholders and drafting proposals. Early on, the PUC Commissioners showed enthusiasm for the measures (saying, for example, that the energy efficiency rule was a ‘no-brainer’). But months of lobbying by industry threaten to kill our one great chance during the legislative interim to make progress towards clean energy. We need Governor Perry and the PUC to stand up to industry and make smart investments in Texas’ energy future.

Please attend the hearing and speak in support of investing in energy efficiency and solar. The first part of the hearing will feature testimony only from invited reps from the utilities and the clean energy industry. However, at the end there will be an opportunity for members of the public to speak.

Details on Hearing

The Public Utility Commission of Texas (commission) will hold an open meeting/hearing regarding Project No. 37623 – Rulemaking Proceeding to Amend Energy Efficiency Rules and Project No. 35792 – Rulemaking Relating to the Goal for Renewable Energy. The open meeting/hearing will being at 10:00 a.m. on Wednesday, June 30, 2010, in the Commissioner’s Hearing Room, located on the 7th floor of the William B. Travis Building, 1701 N. Congress Ave., Austin, Texas 78701.

Questions concerning the workshop or this notice should be referred to Theresa Gross at (512) 936-7367 or David Smithson at (512) 936-7156, Competitive Markets Division. Hearing and speech impaired individuals with text telephones (TTY) may contact the commission at (512) 936-7136

Background on Energy Efficiency Rule

In 1999, Texas became the first state in the nation to establish an energy efficiency resource standard, "requiring electric utilities to offset 10% of load growth through end-use energy efficiency". The program requires electric utilities to reduce energy use through programs such as home energy audits and weatherization programs, switching out incandescent lighting for energy efficient compact fluorescents, providing rebates to consumers to replace old appliances with new energy efficient appliances, and providing incentives for manufacturers to replace inefficient equipment with more efficient technologies.

According to the Electric Utility Marketing Managers of Texas, in 2008, the efficiency program corresponded to a reduction of 882,519 pounds of nitrogen oxide (NOx) emissions per year, while saving consumers millions of dollars.

Given this success, in 2007, the Texas Legislature passed HB 3693 by then-Rep. Joe Straus, doubling the mandate on utilities to 20% of load growth by 2010. The law also directed the Public Utility Commission to study whether increasing the program to 50% of load growth is technically possible. In a December 2008 report, the PUC found vast potential for energy efficiency in Texas which, if tapped, could save Texans as much $11.9 billion on their electric bills.

Despite our progress, Texas has fallen behind in energy efficiency. According to the American Council on an Energy Efficient Economy, Texas ranks just 23^rd among the states for energy efficiency programs. As a result, we waste lots of energy – costing Texans in their pocketbooks and in their health.

In the 2009 legislative session, the House and Senate approved SB 546 to boost efficiency programs, but the bill ultimately died when a conference committee failed to reconcile differences between the two versions of the bill. The PUC staff has proposed a rule which would require utilities to offset 50% of load growth by 2015. This would boost current energy efficiency programs from a minimum of 100 megawatts of demand reductions per year to 300 megawatts per year. Unfortunately, the electric companies – guided by the desire to sell as many kilowatt hours as possible – oppose the rule and will testify in opposition at the June 30 meeting.

Background on Solar Rule

In 2005, the Legislature passed and the Governor signed SB 20 in to law, increasing the state’s goal for renewable energy. That law, and subsequent decisions by the PUC to invest in transmission lines, has played a key role in the development of wind power in Texas. SB 20 also included a goal to develop 500 megawatts of “non-wind” renewable energy technologies by 2015. Until now, that part of the statute (PURA 39.904) has not been implemented. In December 2009, PUC staff released a “strawman” proposal to create incentives to help promote the development of solar and other emerging technologies.

Texas has vast untapped reserves of solar, biomass and geothermal energy. In order to help maintain our leadership as the energy capital of the world and to help protect the environment, the state could benefit by expeditiously developing these clean resources. The implementation of the PUC rule is an important first step towards this goal and could improve the competitive standing of Texas in attracting renewable energy manufacturers to the state. It could also help the dozens of renewable energy companies and suppliers already located in the state, helping create jobs and boost the Texas economy.

The development of 500 MWs of non-wind renewables will help reduce wholesale costs due to less reliance on natural gas.  According to its 2009 Scope of Competition report, the PUC has found that “wind generation has had the impact of reducing wholesale and retail prices of electricity” and “For each additional 1,000 MW of wind that was produced, the analysis showed that the clearing price in the balancing energy market fell by $2.38.”  

The development of 500 MWs of non-wind renewables should produce local jobs in construction and maintenance and potentially produce manufacturing jobs. For example, the University of Texas’ IC2 Institute estimates “Texas could generate 123,000 new high-wage, technology-related, advanced manufacturing and electrical services jobs by 2020 by actively moving toward solar power” 

According to an analysis by the Environmental Defense Fund (see below), the highest possible cost to residential consumers of implementing the rule (using the cost caps included in the “strawman”), would only be 76 cents per month. The program would likely coast much less.

It's up to Governor Perry and the PUC to show leadership and adopt a strong solar program. Despite his bluster against the federal clean energy and climate bill, Gov. Perry has a strong record on renewable energy. It was his task force which recommended doubling the state's renewable energy mandate in 2005, which helped push Texas to national leadership in wind power. They were his appointees to the PUC who agreed to invest $5 billion for transmission lines to windy parts of the state - securing our leadership in wind for years to come.

And Gov. Perry recently told a group of renewable energy executives that “government mandates have a strategic role to play.” Republican primary voters agree with him. According a poll done by the Governor’s own pollster Mike Baselice:

•  “more than 79%, including 71% of Republicans and 73% of self-identified conservatives, support financial incentives such as loans, subsidies and temporary tax reductions to recruit renewable energy businesses and associated jobs to Texas” and
• “there is a statewide consensus to “require” electric companies to provide a certain percentage of their product from renewable sources such as wind and solar.  Support crossed party, racial and gender lines — 86% of Democrats, 59% of Republicans, 89% of Hispanics, 84% of females under the age of 55 and 61% of males over the age of 55. 

Sincerely,

Luke

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Luke Metzger

Director, Environment Texas

815 Brazos, Suite 600

Austin, Texas