AUSTIN, Texas — State regulators have opened a docket proposing changes to peak-demand reduction, energy efficiency goals and related programs following a petition from the Lone Star Chapter of the Sierra Club.

The environmental group filed its request with the Public Utility Commission on Aug. 17, asking it to open a rulemaking that would amend a market rule related to load management and energy efficiency goals, programs and cost-recovery mechanisms managed by the state’s eight private transmission and distribution utilities (TDUs) (53971).

“We recognize that this proposal would require substantial changes … but believe it will be in the interests of Texas commercial and residential consumers and the larger resilience and reliability of the grid,” the Sierra Club said in the filing.

The petition would double TDUs’ required peak-demand goals and increase the energy efficiency of the overall savings goals for both for summer and winter, Cyrus Reed, the Lone Star Chapter’s conservation director, told the PUC during its Thursday open meeting.

The Sierra Club is calling for the TDUs to meet a new peak demand goal of 0.5%, or 40% of load growth, for residential and commercial demand by 2024 and 0.7% (50% of load growth) by 2025, and that they meet both and winter and summer peak with demand-reduction programs. It also asks that utilities increase their spending on hard-to-reach and low-income programs from 10% in 2023, 15% in 2024 and 20% in 2025.

The organization designed its petition to be implemented in three phases, with goals and metrics increasing modestly in a stagger-stepped approach in 2023 through 2025.

Reed reminded the commissioners that their blueprint for a redesigned ERCOT market, released last December, included an item to look at the TDUs’ energy efficiency and demand response programs. (See PUC Narrows Options for ERCOT Market Redesign.)

“No one’s taken action yet” on that, Reed told the commissioners. He was the first of 16 Sierra Club and affiliated speakers that took advantage of the PUC’s public comment agenda item Thursday to lodge their dissatisfaction with the lack of energy efficiency measures and high energy bills.

Protester’s sign at the PUC’s open meeting | © RTO Insider LLC

Residential customers in the ERCOT market have seen their bills rise about 70% over last year’s, thanks to high natural gas prices, inflation and power plant weatherization costs that have been passed on to consumers. In addition, ERCOT’s conservative posture and reliance on having generators available to run more often, have created more than an additional $1 billion in market costs, according to the Independent Market Monitor.

“We don’t think the commission up to now has really centered on solutions that will help residential consumers with these rising bills,” he said.

Reed noted that municipal utilities Austin Energy and CPS Energy have already met the Sierra Club’s suggested goals.

“We think private utilities should have similar goals. You guys have a lot of room to operate,” he said. “We’re concerned about any solutions to the grid that’s going to put the burden on residential ratepayers without offering us solutions on how to lower those potential costs through energy efficiency, demand response and distributed generation.”

As they normally do, the commissioners did not respond to the comments, but they did thank the speakers for their three-minute statements.

Stakeholders have until Sept. 16 to comment on Sierra Club’s proposal.

First Meeting for Commissioner Jackson

The meeting marked newly minted Commissioner Kathleen Jackson’s first as a member of the PUC, which now sports five members for the first time. A professional engineer and a member of the Texas Water Development Board (TWDB), she was appointed to the commission on Aug. 5 by Gov. Greg Abbott. (See Abbott Fills out Texas PUC with 5th Member.)

PUC Chair Peter Lake welcomed Jackson by asking her to take the lead on the commission’s energy efficiency responsibilities and efforts, pointing to her involvement on water conservation while at the TWDB. Jackson is expecting to evaluate the PUC’s energy efficiency policies and procedures and recommend actions to improve energy efficiency.

“Water and electricity are certainly different resources, but the principles of conservation and efficiency are very similar: Don’t waste critical resources, and get the most out of every bit of your existing resources,” Lake said.

“I really look forward to the work ahead,” Jackson said. “We all know that people need a reliable water supply, and they also need a reliable power supply. I’m very much hoping that I can bring to this work effort a scientific analytical mind.”

“Take me at my word, she’s a very sharp lady,” Lake said.

Jackson was also welcomed by Reed. Sierra Club members worked closely with Jackson on water conservation issues during her time on the TWDB.

“I’m thrilled that you’ve been tasked with looking at energy efficiency and … demand response issues,” Reed said.

Commissioner Jimmy Glotfelty jokingly admonished the other commissioners for not wearing a tie “on our fifth commissioner’s first day.” The PUC has been operating under a casual summer dress code that allows male staffers to skip tying knots around their necks.

“We’ll try harder next time,” Lake said, noting the PUC’s next meeting will be in September and business attire will return.

New Office of Public Engagement

The PUC is also creating an Office of Public Engagement that will provide a single point for Texans who wish to participate in electricity, water and telecommunications issues before the PUC.

Michael Hoke, who has worked with legislators and stakeholders to resolve issues under the commission’s regulatory authority as its government relations director, will lead the office. When fully staffed, it will include three other staff members.

“We are constantly exploring ways we can improve and enhance assisting consumers … in a way that emphasizes collaboration among everyone involved and ultimately benefits customers and ratepayers,” Lake said.