In a significant move to strengthen the energy infrastructure, Texas voters have overwhelmingly approved Proposition 7, establishing a billion-dollar state-managed energy fund specifically aimed at bolstering natural gas power plant infrastructure. The ballot measure, which received 65% of the votes with over 2.5 million ballots cast, sets aside $5 billion to guarantee low-interest loans for new dispatchable power generation in the state. This decision comes as a victory for the energy industry but faces opposition from environmentalists.
The Texas Energy Fund, as it is known, was supported by various stakeholders, including the Texas Oil & Gas Association, ConocoPhillips, Texas Association of Manufacturers, Texas Pipeline Association, and Valero Energy Corporation. These organizations believe that the fund will not only strengthen the reliability of the electric grid but also increase the supply of electricity by encouraging additional generation. Todd Staples, the president of the Texas Oil & Gas Association, expressed his satisfaction with the overwhelming support from voters, stating that it ensures Texas remains the best place to live, work, play, and raise a family.
The legislation enabling the vote was signed into law by Republican Governor Greg Abbott in July, and the successful passage of Proposition 7 marks the final step in its implementation. Under the legislation, loans financed by the Texas Energy Fund must have a 20-year term and a low 3% interest rate. These loans can be utilized either to upgrade existing dispatchable power generation, increasing capacity by at least 100 megawatts (MW), or to construct new power generation with a capacity of at least 100 MW. It is worth noting that a natural gas power plant with a capacity of 100 MW can power tens of thousands of homes.
The motivation behind this effort stems from concerns about the state’s power sector’s ability to provide electricity during emergency peak periods. Former Public Utility Commission Chair Peter Lake highlighted that the state’s dispatchable power supply grew only 1.5% between 2008 and 2020, while the Texas population grew by 24% during the same period, resulting in demand outpacing supply. This concern is further amplified due to Texas’ increasing reliance on intermittent green energy sources like wind and solar. These sources are not dispatchable and depend on weather conditions.
Pablo Vegas, the current president and CEO of the Electric Reliability Council of Texas, emphasized the urgency for meaningful electric market reforms that incentivize the development of dispatchable generation. Texas has been a leading producer of wind-generated electricity in the United States, accounting for 26% of the country’s total in 2022. However, natural gas remains the primary source of electricity generation in the state.
While the Texas Energy Fund received significant support, opposition came from groups like the Sierra Club, Environment Texas, Texas Advanced Energy Business Alliance, and Texas Consumer Association. These organizations argue that the focus should be on expanding clean energy sources such as wind, solar, battery storage, and interconnection with the national grid. They believe that the legislature overlooked these solutions, which could have strengthened the electric grid while protecting consumers and the environment.
The approval of Proposition 7 marks a crucial step for Texas in ensuring a more resilient and reliable energy infrastructure. As the Lone Star State continues to navigate its energy needs, debates surrounding the balance between traditional fossil fuels and renewable energy sources are likely to persist. The implications of this decision extend beyond Texas, contributing to the ongoing conversation about the future of energy generation in the United States.
Thomas Catenacci is a politics writer for Digital.
