Texas Plan To Ax Renewables Standard Imperils Development
Texas Plan To Ax Renewables Standard Imperils Development
By Jess Davis
Law360, Dallas (April 16, 2015, 8:40 PM ET) -- Renewable energy developers will have to reconfigure project financing and may shy away from placing new projects in Texas if state lawmakers approve a proposal to eliminate the state's renewable portfolio standard and shut down the market for trading renewable energy credits, lawyers say.
The Texas Senate this week passed S.B. 931 after bill sponsor Sen. Troy Fraser, R-Horseshoe Bay, said Texas has been so wildly successful in developing wind and solar power that it no longer needs a renewable energy requirement enshrined in state law.
Mission Accomplished?
Inside the battle over Texas renewable energy incentives.
(excerpt)
Controversy over the renewables mandate
Terminating the mandate, or RPS, 10 years ahead of schedule could disrupt $40 million per year in payments to wind farms that were factored into financing at construction, said Environment Texas Director Luke Metzger.
“SB 931 is bad faith," he said. "The legislature is pulling the rug out from under the wind industry just as it is getting going. And when solar is just beginning to get hot, we should be fanning the flames, not trying to put them out.”
Metzger believes renewables are being unfairly targeted.
“A report of the Texas Comptroller of Public Accounts estimated that 99.6% of all state subsidies go to oil and gas, mostly as tax exemptions, and they continue,” he said. “The REC market is a small piece of the overall financing of renewables, but with the deck so clearly stacked in favor of fossil fuels, each program is critical.”
“The REC program is not mentioned in any way in this legislation,” Senator Fraser responded. “It came from our Public Utilities Commission of Texas (PUCT) in their Scope of Competition report. I am carrying the legislation for the commission. The first question I asked them is ‘What do we do with the RECs?’ They said the REC program will stay in place and won’t be impacted.”
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