Texas has prided itself as avoiding the heavy hand of federal regulation in electricity generation by choosing not to interconnect with neighboring power grids, which exempted Texas from regulation by the Federal Power Commission starting in 1935. Texas has steadfastly rejected calls to become part of the national grid. Just last month, MIT released a study titled “Connecting the Texas electric grid to the rest of the nation could prevent power outages affecting millions of people during extreme weather events similar to the deadly 2021 Winter Storm Uri.”
Unfortunately, remaining independent has not insulated the ERCOT power grid from federal intervention. The EPA and other federal agencies have relentlessly assaulted the Texas power market with various regulations. EPA declared war on fossil fuels used in power generation in their recent plan that should be called the “Obama Clean Power Plan 2.0” but is officially titled “New Source Performance Standards for Greenhouse Gas Emissions from New, Modified, and Reconstructed Fossil Fuel-Fired Electric Generating Units; Emission Guidelines for Greenhouse Gas Emissions from Existing Fossil Fuel-Fired Electric Generating Units;” and Repeal of the Affordable Clean Energy Rule.” Just the title wreaks of obfuscation and malintent.
The real purpose of the recent EPA rule is to immediately make coal and natural gas power generation illegal, although the rules say that doesn’t happen until 2039. All free market forces were destroyed when the EPA set that mandated “end date” for coal and natural gas power generation. EPA and other federal agencies continue to promote the lie that the power sector has until 2039 to find alternatives to natural gas and coal for power generation or use carbon capture and sequestration, which they know is not up to the task.
Those arbitrary end dates mean that private financing for new natural gas generation stops immediately because the economics of generating plants are based on 25 or 30-year project life spans. The EPA rule immediatly spells the end of private financing, and they know it but choose to lie about it as reflected in the long title and thousands of pages that no mortal can read and comprehend. The EPA staff is undoubtedly celebrating their success in hoodwinking the public while getting accolades from their colleagues in the anti-fossil fuel NGOs.
Luckily for Texas residents, the State recognized the potentially dangerous and economically devastating problem that EPA was creating and established a $10 billion Texas Energy Fund, which taxpayers approved as Proposition 7 in the May 2023 statewide elections. Texas residents agreed such funding was necessary and overwhelmingly approved the fund’s creation.
When the State of Texas created the Texas Energy Fund, they hoped to attract 10 gigawatts of new power generation. On Friday, May 31, 2024, 125 notices of “intent to apply for funds” from the Texas Energy Fund to build a new power generation totaled 55 gigawatts, which is almost equal to the existing natural gas generation. Those seeking low-interest loan guarantees to finance up to 60% of the cost of their project were required to file a notice of intent by Friday before applications opened the next day on Saturday, June 1.
The proposed projects are impressive. An industry group, Powering Texans, announced that its members had submitted plans to construct 5,000 megawatts of natural gas-fired generation, including 1,000 megawatts from Houston-based Cappine, 1,600 megawatts from Houston-based NRC Energy, and 2,000 megawatts from Irving-based Vistra, including plans to convert a coal-fired plant to natural gas.
My take: The EPA’s latest attack on natural gas generation will likely be struck down by the Supreme Court, as was the Obama version, in West Virginia vs EPA in 2022. More importantly, if the upcoming presidential election goes the way polls suggest, voters are also likely to vote against the EPA with their choice of President. Nevertheless, states should follow Texas’s lead and do whatever they can to protect their power grids from the out-of-control EPA and other federal agencies.
The move by Texas to create the Texas Energy Fund is proving to be exactly what needed to be done to preserve the power grid of the fastest growing State in the U.S. As the word spreads that the Texas power grid will expand to meet the almost doubling power demand in the next six years, more industries and people will choose to move to Texas. The State of Texas may well find that the size of the Texas Energy Fund needs to be increased.
Texas is showing other states that they, too, can fend off attempts by the EPA to destroy America’s power grids and regain control by unleashing the power of free markets.
God Bless Texas!
Source: Edireland.substack.com
