Ensuring the reliability of Texas’ energy supply took center stage at the North Dallas Chamber of Commerce Energy Forum on Jan. 8. The forum, “Electricity to Power Texas: Getting to the Bottom of the ‘Resource Adequacy’ Debate,” asked:
- Do we face a power shortage? How much? When? Why?
- Should we change our deregulated electric market? How?
- Do we need more incentives to build power plants? Will they work?
- What role should demand response and peak pricing play?
Serving on the forum panel were energy experts Pat Wood, former PUC Chairman, Charles Griffey, energy consultant and professor, and John Ragan, executive vice president for NRG’s Gulf Coast. As a third-time sponsor and attendee, the Marketwave team learned a lot, even as the debate continues. Here are our takeaways:
- Texas is the most competitive market in the U.S., and natural gas plays a key role in the pricing of electricity.
- Demand Response is the future, but how do we make it work in Texas? Getting people to react to peak use is hard and more electricity education is needed. Consumers are doing a fairly good job of reacting to peak pricing, but the panel suggested we need stronger incentives to convince big businesses to adjust power consumption for periods of time. There is more opportunity to conserve, and providers are looking for ways to promote this option.
- Electricity is a capital-intensive business. Not a big surprise for anyone familiar with the energy industry. There is a resource adequacy debate, yet the capital costs and margins aren’t as attractive in Texas as power generation companies want them to be. So, how do we make Texas more attractive to these investors?
- Deregulation works. It has increased competition, which has improved customer service and choice. The options consumers have today wouldn’t be available without deregulation, but there is still debate on whether more government involvement is needed to ensure the best reliability and investment in the future of Texas energy.
Chime in with your thoughts and feedback to the questions we ask here. Some fear we could end up in a situation like the California “Duck Curve.” What can Texas consumers, businesses and energy providers do to ensure the reliability of our electric grid?