ALIYAH FORMONT: Texas Needs To Fix Its Energy Strategy

Texas is America’s manufacturing and energy export powerhouse. If the Trump administration envisions a true American energy renaissance on the horizon, Texas must lead.

But before Texas can lead, it must get its own grid in order. Decades of federal and state subsidies—the latter now thankfully dead—have powered an overinvestment in periodic wind and solar power, raising costs and threatening grid reliability.

There are bills before the Texas Legislature to bring balance back to Texas’ electric grid, but well-heeled wind and solar lobbyists see those as a threat, raising the temperature inside of Texas’s pink-hued capitol.

The lobbyists are in town to fight against bills such as Texas state Rep. Cody Harris’ House Bill 14 (bill to expand nuclear technology) and state Sen. Lois Kolkhorst’s Senate Bill 819 (bill to revamp the permitting process for unreliable energy). More than 90 people registered to testify on Kolkhorst’s bill alone.

What makes the debate over Texas’ energy particularly intriguing is the intense polarization between competing energy sources. The debate usually goes like this: Democrats advocate for their “green” agenda, demanding more and more subsidies for wind and solar.

In response, Republicans staunchly support natural gas, Texas’ most abundant and reliable energy source. As the majority party, you’d think the GOP’s keen interest in reliable and economically favorable energy sources would reflect the Texas grid.

But this isn’t what we see on the Texas grid; we continue the expansion of unreliable energy—supported by both Democrats and Republicans.

The energy debate misses the largest issue facing the Texas energy grid—the fact that reliable and unreliable energy are valued the same in our current market.

Wind and solar lobbyists are quick to say that these sources have lowered costs. If that were true, then why, after historic expansion of wind and solar and historically low natural gas prices, have Texans’ utility bills risen by nearly 40% since 2020?

And why, out in California, an early green leader, do consumers see the second-highest electricity prices in the nation? Only Hawaii is more costly.

Unreliable energy, like wind and solar, operate at negligible capacity during Texas’ peak demand hours, which increases electricity costs for consumers. For example, the sun sets, solar production drops, and everyone gets home from work, turning on their lights and appliances. This is the moment when demand is highest, and prices soar to meet it.

To meet demand, Texas relies on natural gas plants—which are paid a lot of money to ramp up production, or else large industries are paid to shut down to reduce energy demand. The cost of this unreliability added up to $2.3 billion in 2023, and data suggests that these costs are expected to rise as more wind and solar are added to Texas grid.

Our system doesn’t incentivize reliability, and ultimately, reliability is not being talked about because it’s showing up on your bill, rather than paid by the industry creating the costs.

Both political parties are at fault for maintaining a system in which short-term gains trump long-term stability. Unreliable energy has been made so cheap through the trillions of dollars in federal subsidies that ultimately, have made wind and solar cheaper than natural gas, coal, and nuclear.

Ironically, many of the projects receiving subsidies under the Inflation Reduction Act (IRA) are in GOP majority states, where permitting is easier through de-regulation. As a result, some GOP members have become unlikely defenders of these subsidies—despite the obvious flaws.

In response, state Sen. Kevin Sparks of Midland has introduced Senate Bill 715, which seeks to ensure that generation on the Texas grid is built to be reliable and is equipped to meet demand when Texans need it most. The bill marks a crucial first step toward a grid that truly values reliability. This addresses the often-overlooked issue at the heart of Texas’ heated energy debate: It’s not about which energy sources expand on the grid, but whether those sources can be relied upon when Texans need power the most.

For now, the Texas energy grid is stuck in a vicious cycle, until the market begins to differentiate between reliable and unreliable energy—and Texas’ energy market begins to value reliable energy appropriately. Both sides of the political aisle will continue to use subsidies to fuel short-term political wins and Texans will continue to pay the price for a grid that’s anything but reliable.

Achieving energy dominance on a national scale depends on Texas correcting the imbalance in its electricity market — distortions that have gone unaddressed for years. The future of American energy independence and dominance will start with Texas getting it right.

Aliyah Formont is a policy analyst at Life:Powered, an initiative of the Texas Public Policy Foundation, where she leads research and legislative engagement on energy and water policy. She holds a B.S. in soil and water sciences from the University of Florida.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

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