Texas Lawmakers Want to Support Gas Power by Crippling Renewables

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--If you are a fan of Project 2025, the Heritage Foundation's blueprint to dramatically shrink the size and functioning of the federal government, you're probably cheering about draft energy bills moving through the Texas state legislature. In the same way that Project 2025 has targeted, among other things, renewable energy at the federal level, bills moving through the Texas Senate and House are also taking aim at renewable generation such as wind and solar.

One of the organizations pushing these bills is the Texas Public Policy Foundation (TPPF), a conservative think tank that said it was part of Project 2025, according to its website. Texas lawmakers supporting these bills cite a study from that group issued earlier this year as a reason for their support.

"Over $130 billion in private capital and nearly $30 billion in state and federal subsidies have poured into wind, solar and energy storage infrastructure in Texas, yet Texans are only seeing higher costs and lower reliability," said Brent Bennett, policy director for TPPF's "Life:Powered" initiative that seeks "to raise America's energy IQ," according to the TPPF's website.

Texas lawmakers have considered several electric reliability bills in the current session, which ends in a few weeks, not to return until January 2027. One draft bill, Senate Bill 715, and its virtually identical companion in the House, H.B. 3356, would effectively require all renewable generation in the state to arrange for dispatchable back-up generation, effectively meaning gas-, coal- or nuclear generation. Or they could pay a hefty fine. Or they could shut down their generators.

S.B. 715 passed the Texas Senate May 7.

The bill's drafters argue that electricity produced by wind and solar generation is intermittent, depending on the good graces of Mother Nature. When the wind doesn't blow or the sun doesn't shine, these facilities don't generate electricity. That's not good enough for a state with sharply rising peak electric demand, where a highly reliable source of electricity is basic table stakes to sustain life and economic growth.

Many of the large electric loads driving projected peak electric demand in Texas are highly power sensitive, such as data centers, semiconductor manufacturing and other types of high-tech manufacturing. Demand also is projected to surge from the state's oil and gas operations. For more on the state's projected surge in electric demand, which caught regulators and lawmakers by surprise, see April 25, 2024, article - Data Centers, Oil & Gas Industry to Drive Surge in Texas Electricity Demand.

Texas' elected officials responded by creating a $10-billion fund to support the construction or refurbishment of dispatchable (effectively, gas-fired) generation. For more on that, see June 9, 2023, article - Texas Legislation Would Give $10 Billion Boost for New Dispatchable Generation and June 18, 2024, article - Was $10 Billion Enough? Texans Face Another White-Knuckled Summer. While that $10-billion fund was wildly oversubscribed, some projects have been dropped from the list. For more on that, see September 16, 2024, article - Texas Regulators Reject One Proposed Power Project.

Despite efforts to elevate the competitiveness of gas-fueled dispatchable capacity, Texas continues to be a leader in construction of wind and solar generation. According to the state's grid manager, the Electric Reliability Council of Texas (ERCOT), renewable generation totals about 71,169 megawatts (MW) of installed generation capacity while dispatchable generation (nuclear, coal and gas) totals about 86,290 MW, according to the agency's Monthly Outlook for Resource Adequacy for July 2025. Those totals reflect installed generation capacity, not what can be relied upon in a searing summer day, the agency said.

Nonetheless, S.B. 715 and H.B. 3356 would require all existing renewable generation facilities and all future ones to contract for back-up generation so the state could reliably count on output from those facilities during peak electric demand periods. Failure to make those arrangements would expose asset owners to heavy fines. Alternatively, those renewable generators could simply close their facilities.

The renewable energy community said those bills, if passed, would likely put them out of business. They point to how solar generation surges during times of peak demand, typically late afternoons in the summer, helping keep the lights and air conditioners on during summer days. They can claim, with some justification, that solar energy kept the grid from failing during the state's searing summers.

A report in the Houston Chronicle quoted industry leaders as saying that the provisions of those two bills could be so cost-prohibitive that thousands of megawatts of existing renewable energy projects in Texas might shut down, and companies wanting to develop new ones would go elsewhere.

The Chronicle quoted Mark Stover, executive director of Texas Solar and Storage Association, a trade group, as saying: "I cannot recall legislation as damaging to our industry and to the energy market as House Bill 3356 and Senate Bill 715 being considered in both chambers this late in session."

Another source, Doug Lewin, president of Stoic Energy Consulting, told the Chronicle that electric "prices would skyrocket. Our grid would become less reliable. Our economic growth would be choked off." The two bills could "break the Texas grid."

State Representative Jared Patterson (R), author of H.B.356, said his goal is to "level the playing field" against "highly subsidized renewable energy" so more natural gas power plants can be built in Texas.

"Crippling existing renewable generation, and effectively foreclosing future renewable generation, is not the way to fix Texas' electric challenges," said Britt Burt, Industrial Info's senior vice president of research for the Electric Power Industry. "Killing those resources will not get gas-fired generation built any faster. And it certainly seems like it would increase the likelihood of rolling blackouts."

"I'm more of a fan of dispatchable generation than I am of renewable projects, but all of them have their place," Burt continued. "For decades, electric utilities across the nation have practiced an 'all of the above' portfolio strategy. Not putting all your eggs in the same basket has worked for the industry, and its customers, for a very long time. A well-crafted mix of generation resources, including dispatchable resources such as coal, gas and nuclear, intermittent resources such as wind and solar and customer programs like demand response, is the bedrock of a stable, affordable, and reliable electric supply."

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).