Texas utility commission chair warns grid at risk for summer outages, pushes for gas-fueled power

Public Utility Commission Chair Peter Lake on Wednesday warned that Texas' main power grid is at risk for outages this summer if wind turbines don't produce enough electricity when it's needed. He yet again made the case that more on-demand power sources, such as natural-gas-fueled power plants or batteries, need to be built to make the grid more reliable.

Lake's statements, made in light of a new assessment of possible risks facing the grid this summer, echoed arguments he has made throughout the legislative session.

Lawmakers are evaluating a new economic tool that Lake's agency approved, called performance credits. The credits would increase electricity customer bills an estimated 2% and direct the funds to companies that operate on-demand power sources, with a goal of incentivizing them to build more power plants or keep existing plants in service longer.

"The Texas grid faces a new reality," Lake said Wednesday. "Data shows for the first time that the peak demand for electricity this summer will exceed the amount we can generate from on-demand, dispatchable power, so we will be relying on renewables to keep the lights on."

Lake based his statements on the grid operator's seasonal report that studies how much electricity the system is expected to be able to produce in various, low-probability scenarios, compared to demand.

The Electric Reliability Council of Texas found that the grid might not be able to meet a very high demand for power at the end of the typical work day if it coincides with extremely low wind and an extreme number of unexpected outages at other plants. ERCOT also found that low winds and very high demand after sunset could also cause power shortages.

The demand for energy has increased as the state's population and economy grow, Pablo Vegas, president and CEO of ERCOT, said at the news conference, and wind and solar energy production has increased much more than coal- and gas-powered production to meet the electricity needs.

"So as a result, we are expecting to have to rely more on renewables during peak conditions than we ever have before," Vegas said.

Renewable energy supporters pushed back on the characterization that the grid's reliability rests on renewables alone.

Environment Texas Executive Director Luke Metzger said in a statement that the growth of renewable energy in Texas "should be heralded and welcomed - not blamed, contrary to evidence, for grid problems."

Renewable energy is important to make the air cleaner, slow climate change and lower electricity bills, Metzger said. Environmental advocates say they want to see efforts to reduce electricity demand, such as by improving insulation in homes, rather than increasing reliance on fossil fuels for power - which is the direction that several bills pending in the Legislature are moving.

Judd Messer, Texas vice president for the Advanced Power Alliance, which advocates on behalf of renewable energy, called Lake's warning another example of anti-renewables politics entering a discussion that should be just about facts.

"The reality is that the grid will require all its resources to keep the lights on this summer," Messer said.

After the grid nearly collapsed during a February 2021 winter storm, leaving millions without power or heat and causing more than 200 deaths, Gov. Greg Abbott and other Texas leaders quickly blamed renewable energy for the power failures - although later analysis showed that all types of power generation faltered in the storm.

Katie Coleman, who has advocated on behalf of companies that use a lot of electricity and oppose the performance credits, said this is not the first year that the system has relied on renewables to meet high demands.

"We do not believe this new release materially changes things or justifies (the performance credits) without strong cost protections for customers," she said.

Disclosure: Advanced Power Alliance has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

The Texas Tribune is a nonprofit, nonpartisan media organization that informs Texans - and engages with them - about public policy, politics, government and statewide issues.