Written on: June 1, 2012
If you’ve been reading along lately, you know that Texas regulators face some very difficult decisions relating to the state’s energy reserves. At issue is the manner in which Texas ensures it has enough power to meet its future needs — and at what cost. On Friday the Brattle Group economic consulting firm released a much anticipated report on the issue. You can find a link to the report here.
In response, Geoffrey Gay, general counsel of the Texas Coalition for Affordable Power, has released the following statement on behalf of TCAP:
While TCAP sees much in the new Brattle Group report to commend, we nonetheless are disappointed that it does not include any in-depth consideration of potential costs to homes and businesses. Texans do not like writing blank checks, but in essence this is what will happen if any of Brattle’s policy options is chosen without further analysis. Determining the relative costs and benefits for end-use consumers should be the first and most important step in this debate.
Some of the options set forth by Brattle, such as the creation of a capacity market in Texas, likely would be seen in a very different light if customer costs were taken into account. We at TCAP are concerned that moving to a capacity market may be the most expensive of the options set forth by the Brattle Group.
However, we do see several worthwhile recommendations in this report. For instance, we agree that the PUC and ERCOT may need to revisit its reliability targets. The Brattle Group report notes that the current reliability targets are interpreted very stringently in Texas compared to how such objectives are interpreted elsewhere.
TCAP agrees with Brattle Group’s caution to policymakers to not proceed too quickly, and to not make crucial decisions without sufficient analytical support. This is especially relevant with regards to the proposal to increase the system wide offer cap by 50 percent this summer. There has been no analysis as to how that change will impact consumers or the overall economy, and there is nothing in the Brattle Group report to support fast-tracking this increase by Aug. 1.TCAP is a coalition of more than 160 cities and other political subdivisions that purchase electricity in the deregulated market for their own governmental use. Because high energy costs can impact municipal budgets and the ability to fund essential services, TCAP, as part of its mission, actively promotes affordable energy policies. High energy prices also place a burden on local businesses and home consumers.