Electricity Concerns Persist After Pollution Ruling

With temperatures projected to soar during the final days of August, the reliability of the Texas electric grid is once again on policymakers’ minds. Grid managers can, for now, count on the continued operation of some of Texas’ oldest coal plants, now that a federal court has vacated the Environmental Protection Agency’s cross-state air pollution rule, which could have impacted those facilities.

Had that rule taken effect, ERCOT, the grid operator, had predicted that as much as 1,400 megawatts — about 1.6 percent of the grid's total capacity — would have had to go offline during the summer months of peak demand. Luminant, a power company at the center of the furor over the rule, said when the original EPA rule was published that two units at its 1970s-era Monticello coal plant would have had to close, and some other coal-plant units would have had to switch from using Texas lignite to a cleaner type of coal from Western states. "We are supportive of the court's ruling and are focused on safely helping power Texas during this high demand period," said Allan Koenig, a spokesman for Luminant, in an email after this week's decision.

Despite the cross-state ruling, the reliability issue isn’t going away, given the state’s growth and the lack of construction of power plants. Donna Nelson, the chairwoman of the Public Utility Commission, has proposed a meeting on September 6th to discuss how to bring about more investment in power plants and ensure reliability. The Gulf Coast Power Association is holding a luncheon in Austin on September 14th to address the much-discussed topic of “demand response” — i.e. cutting electricity demand at peak times. And controversy over EPA rules will doubtless continue; look for power companies and policymakers to start studying the knock-on implications of the cross-state ruling on a different EPA rule about regional haze, which had delegated some of its regulations to the cross-state rule. A rule to limit mercury emissions from power plants is also in the offing.

Renewable energy — both hopes and struggles — will also be a key topic in the coming month. San Antonio is hosting a solar forum on August 28, to examine the potential contribution of solar to meeting peak demand (and no doubt showcasing the city’s own substantial solar commitments).

Wind energy is continuing to brace for a tough run. Advocates are focused on persuading Congress to extend a key tax credit, which expires at the end of the year. Republican presidential nominee Mitt Romney opposes its extension, while the Obama administration supports it, making the credit something of an election-year political football. Wind-power manufacturing activity is slowing down, given the uncertainty over the credit; Vestas, a major global turbine manufacturer, recently announced several thousand layoffs; it is also closing a research and development arm in Houston. And Texas, which has more wind farms than any other state, experienced the unusual indignity of being passed by California in terms of the amount of wind being installed last year.