By Tom Kleckner
HOUSTON — The Gulf Coast Power Association’s annual spring conference drew almost 400 attendees to the so-called Energy Capital of the World to participate in discussions on retail markets, distributed generation, competitive transmission and separate roundtables featuring RTO CEOs and market monitors. (See related stories, RTO CEOs Trade Quips, Thoughts on Future at GCPA and Market Monitors Debate Their Roles, Effectiveness of Programs.)
‘New-day Democrat’ Houston Mayor Recalls Legislative Career
Houston Mayor Sylvester Turner, a Democrat, broke character as he reprised his role in Texas Senate Bill 7, which deregulated the state’s electric industry in 1999 and set up a fund to help low-income consumers.
“I remember my sparring partner [Dallas Republican Steve Wolens] asking me whether Democrats would support deregulation. We’ll deregulate anything,” he said, as the ballroom erupted in laughter.
Smiling sheepishly, Turner regained his poise. “We are new-day Democrats!”
It turns out that Turner, a 27-year member of the Texas House of Representatives, was a new-day Democrat back in the 1990s. “I said, ‘I’m not opposed to deregulation, especially if it will spur technology and innovation and new ways of doing things.’”
Turner’s only request was the creation of the System Benefit Fund, which collected about $800 million in fees from customer bills. While the Legislature did use the fund to help the state’s budgets meet the legal definition of balanced, Turner was able to ensure the fund disbursed the remainder to low-income customers in its final three years of existence, he said. The fund was wound down in 2017.
“This doesn’t mean elderly, low-income consumers don’t exist,” Turner said. “They’re still there, and the need is still there. I hope we will always be sensitive to those that are vulnerable.”
Industry Analysts: Expect Low Prices in SPP
A pair of industry analysts agreed that SPP will “by far” be offering lower wholesale prices than any other RTO over the next five years.
“There are a couple of things in SPP that will be coming down the pipeline in the next couple of years,” said Brian McIntosh, product director at Genscape. “With Mountain West [Transmission Group]’s integration, you will have a ton of hydro and baseload generation that would be added into SPP with a limited load. You’ll be adding more supply to the system with more wind growth.”
Bojana Popovic, vice president of strategy and product development for EDF Energy Services, agreed, suggesting attendees look at the power purchase agreement prices for wind in SPP. “They still have four years of [production tax credits] … just look at where it’s cheapest to contract renewables,” she said. “It’s SPP.
“I do have a question about how long SPP can sustain low prices and maintain that level of investment.”
McIntosh cautioned against placing too much stock on future predictions.
“It looks like a future with super low natural gas prices, but if you think that’s the future we’ll end up with, you can shoot yourself in the foot.”
DG Panelist: You Can’t Stop the Technology
Patrick Reinhart, El Paso Electric’s assistant vice president of Texas external affairs, told his fellow DG panelists that, “I think a lot more customers are going to want DG on the system. They want storage on system. They want the grid to back them up,” he said. “It goes back to who pays for it. For 100-plus years, energy flowed in one direction. Now, it’s flowing back the other direction. I’m an opponent of toll roads. We can argue about whether to go in that direction.”
Meghan Nutting, vice president of policy and government affairs for solar developer Sunnova, agreed DG is coming. Just don’t listen to the naysayers, she said.
“It’s interesting to me to see all these discussions happening for a technology with a penetration of 1 to 3%. They say it’s a very small part of the system right now,” Nutting said. “I think before we try to limit this technology, let’s give it a chance for success. And not just solar, but energy efficiency, [electric vehicles], microgrids … rather than limit or stop these things now, let’s see what we can do with these technologies.”
As an example, she pointed to California, where she said CAISO recently canceled $2.6 billion in transmission projects no longer needed because of the state’s abundance of rooftop solar.
“It’s important to keep that in mind when talking costs and benefits,” Nutting said.
