Texas Senate passes bill aiming to counter federal subsidies for wind and solar power 

While President Joe Biden moves to expand the use of renewable energy nationwide, the Texas Legislature is doing the opposite, adding fees on solar and wind electricity production in the state in hopes of boosting fossil fuels.

Among the reforms of the state’s electric grid following last month’s deadly winter storms, Republicans in the Texas Senate have included new fees aimed at solar and wind companies that Democrats warn would damage the state’s standing as a national leader on renewable energy production, particularly wind power.

State Sen. Charles Schwertner, R-Georgetown, said while wind and solar have expanded in Texas, those are “unreliable” sources of energy because they cannot be called up at a moment’s notice during an emergency like the freeze in February.

To correct that, Schwertner said his bill will give the state’s grid monitor authority to create fees for solar and wind. As it stands now, he said billions of dollars in federal subsidies to wind and solar companies have “tilted” the market too much to benefit those sources of energy, and he aims to re-balance it.

Yet fossil fuels also receive government subsidies of roughly $20 billion a year, according to some estimates.

Democrats in the Senate say raising fees on green energy would be a step in the wrong direction for a state that has done well in developing wind and solar. Over the last decade, renewable energy has surged past coal and nuclear power to become the state’s second-leading source of electrical power, after natural gas, according to the U.S. Energy Information Administration.

“This section could actually be detrimental to renewables,” said State Sen. José Menéndez, D-San Antonio.

The fees are included in a bill that is the most wide-ranging response yet to pass the Texas Senate dealing with the power outages from the winter storms.

Beside the fees on solar and wind producers, the legislation would create an alert system to warn Texans about impending power outages, and would require all electricity providers to weatherize their facilities and transmission lines – a major source of the midstorm power outages. It would also prohibit the wholesale electric index plans that resulted in astronomical bills for some consumers.

“SB 3 comprehensively addresses the root issues that led to the major failures that occurred in the Valentine’s Day winter storms,” Schwertner said.

As the Senate debated the legislation, Menéndez said he’s bothered by some who have tried to scapegoat solar and wind generators for the power failures when nuclear, natural gas and coal were all interrupted during the storm, resulting in the rolling blackouts that left millions of Texans without power.

Conservative groups in Texas have long complained about the federal subsidies for wind and solar power that Biden is considering expanding.

Those groups, like the Texas Public Policy Foundation, have argued the billions in federal spending has distorted the free market to the detriment of fossil fuels. While they’d prefer those subsidies be undone, that is unlikely with Democrats in control of Congress and the White House.

The Advanced Power Alliance, an industry trade association created to promote the development of wind and solar, calls the proposed fees in Texas “unnecessary, discriminatory policy that will increase costs on residential, commercial, and industrial electricity consumers.”

The arguments back and forth come as Biden has promised a historic commitment to expanding clean energy production.

Paying for ‘lack of reliability’

Biden is headed to Pittsburgh on Wednesday to lay out a sweeping infrastructure plan with an expected price tag of at least $3 trillion – and green energy is likely to be a major focus of the package, with new incentives for wind, solar and more expected to be included.

On Monday the White House rolled out a slew of new federal projects aimed at juicing offshore wind energy production – including in the Gulf of Mexico – that set a goal of building 30 gigawatts of offshore wind power in the United States by 2030. That followed an executive order Biden signed on his first days in office that called for the creation of a new “clean energy economy.”

“This offshore wind goal is proof of our commitment to using American ingenuity and might to invest in our nation, advance our own energy security, and combat the climate crisis,” said U.S. Secretary of Energy Jennifer Granholm.

Biden’s infrastructure proposal is expected to be Democrats’ biggest push for green energy since the Obama-era stimulus, the American Recovery and Reinvestment Act, which included some $90 billion for wind, solar and other clean energy initiatives.

White House Chief of Staff Ronald Klain on Monday was tweeting findings from a 2020 National Bureau of Economic Research study that found the Obama-era clean energy spending created nearly 1 million jobs between 2013 and 2017.

Texas Republicans emphasize that when the sun goes down or the wind isn’t blowing, those sources of power can’t be relied upon, as the winter storms showed.

State Sen. Kelly Hancock, R-North Richland Hills, said the proposed fees on renewables recognize “the lack of reliability, which is what we saw during this event.”

However, it’s not just renewables that receive government subsidies.

The U.S. government is also providing tax subsidies to the fossil fuel industry as a means of encouraging domestic energy production. They include direct subsidies to corporations as well as other tax benefits to the fossil fuel industry, according to the bipartisan Environmental and Energy Study Institute in Washington, D.C.

Conservative estimates put U.S. direct subsidies to the fossil fuel industry at roughly $20 billion per year.

Senate Bill 3 passed the Senate on a 31-0 vote on Monday and now heads to the Texas House. Both chambers must pass identical versions of the legislation in order for it to get to Gov. Greg Abbott for his approval before it can become law.

Lt. Gov. Dan Patrick, a Republican from Montgomery County, made the bill a priority.

“The work is just beginning,” Patrick said, promising more changes to correct problems that caused the state’s power grid failures. “But this is a great first step.”

Benjamin Wermund contributed reporting from Washington.