Texas power grid debate continues as bills favoring construction of gas-fired plants advance in House

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The debate, which seeks to redesign the power market and favors natural gas generation, stems from the state’s devastating 2021 winter storm. That February’s arctic blast pushed the state’s electric grid into chaos, resulting in power outages for 4.5 million Texans and the deaths of more than 200. More questions about the state’s ability to keep the power on were raised as the grid teetered under the pressure of record heat last summer.

Efforts to correct for the deadly failure led the House State Affairs Committee on Wednesday to pass Senate Bill 2627, which would use state money to provide low-interest loans and pay companies a bonus for connecting a new plant to the grid by 2029. Although the bill is technically meant for building any type of on-demand power, it excludes batteries that are typically used to store wind or solar power.

Representatives of gas-powered generation companies stressed that they could live with the loans and bonuses if they also got a functional financial tool to give them more revenue after the plants were built. The tool to do that, known as performance credits, was proposed by Texas electricity regulators earlier this year.

Companies that build and operate gas-powered plants said the credits would incentivize them to keep older gas plants online and build new ones. Others refute the idea that more incentives are needed for on-demand power in the electricity market and doubt whether the credits would bring more online or just drive up electricity costs without providing a benefit.

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