The Exchanges

Q And those two guys set in motion this boom in Texas for renewables that surpassed all expectations, and this was not until recently considered part of the woke agenda. What has happened in the years since?

A Well, it's, it's the energy marketplace, right? Because in the late 19 nineties, early 2000, it appeared that the Permian Basin was running dry. We weren't going to be able to produce that much oil. The natural gas was running out. A company called Chenier was building a natural gas import facility on the Gulf Coast to bring natural gas from Qatar. Uh, it was gonna cost Texans a huge amount of money, and we realized that the one thing Texas has is a lot of wind and a lot of, ah, sunlight. And wind, of course, was the first technology to be able to produce energy at a reasonable rate. You also had the federal, ah, tax incentives, the production tax credit that helped to bring down the cost of, ah, wind energy. So, Sure. I mean, it was a Republican national security issue to produce energy at home and not rely on imports. But a guy named George Mitchell from here in Houston perfected, uh, hydraulic fracturing, which was able to go into the source rock Shatter the shale that, that created oil and gas and bring even more oil and gas out of the ground than anyone ever thought was imaginable. Uh, that crashed the price of both oil and natural gas in Texas and set off a fierce competition between, uh, natural gas and renewables to supply electricity to the state of Texas.

AI assessment note: “crashed the price of both oil and natural gas in Texas and set off a fierce competition”

Q And then there are some other pieces of the legislation around interconnection and capacity requirements. Can you explain those as well?

A Sure. So one measure that, two measures that passed that are going to hurt the renewable industry. One is the cost of transmission lines. Up until now, um, connecting a wind farm to the grid through transmission lines was covered by all the rate payers everywhere in the state. Now, if your wind facility or solar facility is more than a certain distance from From, from the interconnect, you're, you're going to have to pay for those extra miles to connect. And it's about a million dollars a mile to run a transmission line in Texas. Uh, that's going to put significant cost on new facilities, because frankly, all the places convenient to interconnection, they're already taken. Um, the second thing that's going to happen with every new facility after January one, Is something called a firming requirement, and what this says is that when supplies are super, super tight for electricity, the Public Utilities Commission is going to sign every generator by portfolio, not by individual facility, but by their portfolio of facilities, a certain amount of electricity they're expected to produce in an emergency. And if you're a wind or solar facility, and you're not confident you're going to be able to supply that quota of power in an emergency, you're expected to go find it somewhere else. You can either build a battery facility and provide your quota that way, or you have to go out and cont…

AI assessment note: “One is the cost of transmission lines... The second... is something called a firming requirement”

Q And renewables have held their own. Texas Now builds more wind farms and utility-scale solar projects than any state in the country. What has been the impact, the economic impact of renewables across the state?

A Well, you know, the Texas Consumer Association says that we saved about thirty-one billion dollars on our electricity bills over the last decade, thanks to wind and solar. That's not counting, ah, the trillion or so dollars that have been invested In constructing these plants and developing them across the state. And for this, we have the Republican mindset to thank. I mean, Texas is a low regulation state. We don't have a lot of permitting rules. We have almost no federal lands whatsoever. Everything is owned by the state or private individuals, and it's just dead easy to build here. You add on to that the Grid operated by the Electric Reliability Council of Texas. We call it ERCOT. The ERCOT grid is, uh, wide open. Anyone who can generate can, can come to Texas and generate and sell electricity, and it's a competitive wholesale market. So the light regulation, the wide open laissez-faire approach to electricity markets really allowed, um, renewables to take off here, and so that's why you have, Major corporations like Facebook, Amazon, you know, Microsoft, Google, all coming to Texas, building, you know, signing power purchase agreements to support massive renewables development.

AI assessment note: “we saved about thirty-one billion dollars on our electricity bills over the last decade”

Q You have the Republican-dominated government putting all these bills forward, many of them making it almost impossible to build renewables in the state. Can you characterize that frenzy of legislation? What was some of the most extreme stuff you saw, and how did it start to shake out?

A Well, I mean, there was one bill to ban all future renewable energy development. One of my other favorites was a bill to forbid ERCOT from purchasing power from offshore wind facilities. Those were outliers. There were posturing bills that gave lawmakers a chance to issue a press release, and they never went anywhere. The big, nasty bill that was You know, still alive as of Saturday until it was ripped out by negotiators was something called Senate Bill six 24. And it creates a list of places where if a wind farm is within 10 miles or a solar facility is within five miles of one of these places. And it's every, Historic site, every river, every state forest, every state park. I mean, essentially, when you get done with the list, it covers the entire state. Um, And says that if you want to build something within the, within the state of Texas, you basically have to go through an extremely onerous and expensive permitting process that would allow anyone living within 50 miles to effectively block the development of that facility. And we know where that comes from. It's a coalition of wealthy landowners Uh, it's the Bass Brothers from Fort Worth. It's, uh, Dan Friedkin, who's a Hollywood producer and, and, and banker. We know about the, the folks down in South Texas. These are people who own hobby ranches. Really beautiful fake ranches where they have a few cows, and they have a b…

AI assessment note: “Well, I mean, there was one bill to ban all future renewable energy development.”