“Corporate Welfare” — that’s how Texas Public Utility Commissioner Kenneth Anderson has described controversial proposals being pushed by some of the state’s biggest generators.
At issue are proposed capacity subsidies, which big generation companies say will give them the extra incentive they need to keep up with energy demand. Generators want these subsidies on top of whatever revenue they already collect from selling power.
Anderson has never disputed that Texas should protect itself against needless outages. But speaking during a recent meeting of the Dallas County Council of Republican Women, the state regulator said he instead favored a “pay for performance” model that would reward generators for the ability to come on line within 20 minutes.
Anderson said that just having a generation plant built does not mean it can run when needed. He noted, for example, that the state’s two major brownouts since deregulation were not due to inadequate capacity, but rather due to the fact that generators were not adequately prepared.
Commissioner Anderson also took up the touchy subject of smart meters, which have been the target of hundreds of complaints filed at the agency. The state’s transmission and distribution utilities, with the authorization of the PUC, have been installing these advanced digital devices since 2005. But many Texans have expressed health and privacy concerns, and want to opt-out of the smart meter network.
Commissioner Anderson told the Republican group that he supported smart meters for two main reasons — reliability and to facilitate competitive choices. With regards to reliability, Anderson noted that the new meters allow utilities to know immediately who has lost power during an outage and also to know the moment the power is restored. He said the meters facilitate customer choice by speeding up the switching process between providers because the meters allow for rapid meter reading.
Commissioner Anderson recognized that not everyone is pleased with the smart meter system, and that Texans should have the ability to opt out if they desire. But Anderson said if a resident opts out, he or she must understand that manual reads by the utility then become necessary. This requires personnel, vehicles and gasoline. That’s why a new PUC rule going into effect next year will require residents who opt-out also to sign an acknowledgement that they face extra costs as well as potential loss of benefits.
Commissioner Anderson finished his talk by discussing cyber security. He said the PUC has learned that the threat of a security breach is greater not with smart meters, but rather with smart thermostats connected to the Internet. Commissioner Anderson said his staff is studying this and other security issues in collaboration with electric companies.