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State Utilities Reliability Fund

Funding weatherization

I’m okay with this, with one caveat.

A plan to help finance what will likely become mandatory power plant upgrades to withstand more extreme weather in the wake of the February power crisis received preliminary approval in the Texas House on Monday.

The failure of power plants to produce power during very cold temperatures was a major cause of the February power outages in Texas that left more than 4.8 million customers without electricity for days and caused more than 100 deaths. Natural gas plants shutting down or reducing electricity production due to cold weather was the most significant source of outages, according to an analysis by the Electric Reliability Council of Texas, which manages the grid that covers much of the state.

House members voted 126-18 in favor of a $2 billion program that would be created by House Bill 2000 by state Rep. Dan Huberty, R-Houston.

“We are looking forward to make sure these things don’t happen again,” Huberty said. “We can’t shut the Texas economy down by losing power and losing lives. That can never happen again.”

Modeled after the state’s water infrastructure fund, House Bill 2000 and the corresponding House Joint Resolution 2 would allocate $2 billion of state funds to help finance what could be expensive — and likely mandatory — upgrades to power plants in Texas to withstand more extreme weather conditions by providing electricity generators with access to grants and low-cost loans for the projects. House Joint Resolution 2 was also advanced in a 126-18 vote.

Most power plants in Texas are not built to withstand very cold weather and experts have said that retrofitting plants will be more costly and difficult than building weatherized plants in the first place. Still, it is technically and economically possible, energy experts have told the Tribune, depending on the type of weatherization the state may eventually mandate.

Concerned that a mandate to upgrade would cause companies or municipalities to shut down power plants and further reduce the state’s available power supply, lawmakers sought a way to provide a financial boost to the effort.

A State Utilities Reliability Fund (SURF) and the State Utilities Reliability Revenue Fund — modeled after the state’s existing funds for water infrastructure projects — would be created by Huberty’s proposed constitutional amendment and corresponding bill. The plan would need to be approved by voters in November if passed by two-thirds of the Texas House and Senate because it alters the state’s constitution.

In 2013, the Legislature created the State Water Implementation Fund for Texas, known as SWIFT, by allocating $2 billion from Texas’ economic stabilization fund, better known as the “rainy day” fund. It offers subsidies and help with low-cost loans for municipal water infrastructure projects, said Rebecca Trevino, chief financial officer of the Texas Water Development Board, which is charged with managing the fund.

The “SURF” fund would function similarly, but instead of offering the low-cost loans and grants to municipalities, the fund would also offer those financing tools to for-profit power generation companies and others to upgrade plants to withstand more extreme weather conditions.

I’m okay with this approach, even if it is using public funds to subsidize for-profit companies, because the need outweighs the other concerns. We’re not going to scrap the system we have now for something that makes more sense, so the least we can do is address this glaring need so we (hopefully) never face a situation where hundreds of people die because of weather.

The caveat comes from the comparison to the water infrastructure fund that the Lege authorized following the 2011 drought. There may be a nice clean report on the SWIFT homepage that tells me just how much new water infrastructure has been financed and built (or is being built) as a result of that fund, but I’m not seeing it. I would like very much for there to be an easy-to-find progress report on whatever future SURF page we wind up with, so this is visible to everyone. Maybe if the progress we get isn’t what we hoped for, that will enable us to spot it and do something about it in a timely fashion.