On Monday, the Texas Senate Business and Commerce Committee took up the critical issue of the impact of extreme drought conditions on electric generation capacity and state officials’ plans to respond to those risks. A number of important issues and policy solutions were raised, from on-bill financing of energy efficiency to renewable energy to send the right ‘market signals’ to incentivize the construction of new power plants. Public Utility Commission (PUC) Chair Donna Nelson singled out, in particular, the state’s energy efficiency and renewable energy goals. These policies have helped reduce pollution, saved customers money and have the added benefit of reducing our dependence on water for electricity production.

Another important part of the solution discussed was raised by a number of panelists: demand response (aka load management). The ability of end-use customers to reduce their use of electricity in response to power grid needs or economic signals has helped the Electric Reliability Council of Texas (ERCOT) avoid rolling blackouts and, in other regions of the country, it has helped markets avoid the need for new capacity. As ERCOT CEO Trip Doggett and PUC Chair Nelson pointed out in their testimony, demand response is a market competitive resource that uses no water and, as such, it may prove to be a valuable resource in view of the state’s record drought.

Full article at blogs.edf.org.