Texas Building Its Own Power Plants Could Cost $7 Billion More Than Projected

According to an estimate from the Lower Colorado River Authority, constructing natural gas-fueled power plants with fuel stored on-site would cost around $18 billion under a plan that the state Senate passed last week to develop up to 10 gigawatts of on-demand power.

The cost is far more than the $10.8 billion estimate Berkshire Hathaway gave during a Senate committee hearing earlier this year. Berkshire Hathaway was the company that first promoted constructing new gas plants to serve as backup power sources two years ago.

The Policy Against Disasters

As recently described in Senate Bill 6, the strategy would instruct the state to use one or more organizations, such as the river authority, to construct power facilities that might be activated in an emergency. During peak demand, the plants could supply 2 million homes and run for days.

The idea is an insurance policy against disasters, like the 2021 winter storm that killed hundreds of people as electricity generators, including gas plants, went down amid days of extreme cold, according to state senator Charles Schwertner, a Republican from Georgetown, and the bill’s primary author.

Texas Building Its Own Power Plants Could Cost $7 Billion More Than Projected

The bill is a priority, according to Lt. Governor Dan Patrick. However, detractors have issued a warning that the proposal may result in significant consumer costs, a rise in greenhouse gas emissions that contribute to climate change, and no benefit to the state electricity infrastructure.

SB 6 leaves open the possibility that the power customers served by the Electric Reliability Council of Texas, which serves the majority of the state, might be charged additional fees to finance the cost of the plants rather than utilizing state funding. According to an assessment of the measure by the Legislative Budget Board, “any rate increases are unknown.”

Alicia Knapp, president and chief executive officer of Berkshire Hathaway Energy Renewables, stated during a Senate Business and Commerce Committee hearing in February that a price tag of $10.8 billion would result in an increase in costs for residential users of less than $4 per month. Knapp recommended that the state may use monies from the budget surplus to cover all or part of the expense. The House budget proposal does not include the same $10 billion commitment that the Senate Finance Committee did to help pay for at least some of the cost of building the plants.

“Our proposal was designed to be an emergency backup power supply that can be up and running quickly, that helps ensure Texans against another blackout situation, guarantees steel in the ground and can be done at a reasonable cost for customers,” Knapp said, referring to the company’s initial, unsuccessful 2021 plan.

Only one witness at a committee hearing in March supported SB 6: a representative for Berkshire Hathaway. The Lower Colorado River Authority, which the Legislature established and which generates and distributes power, stayed out of the hearing. Let’s know the latest news about KISD Picks Ringo As Its New Superintendent.

Before the Senate vote on April 5, The Texas Tribune asked LCRA spokesperson Clara Tuma for a cost estimate, but Tuma responded that she didn’t have “any solid numbers” to give. On April 7, Bloomberg published the first account of the LCRA cost estimate. KERA issued a Thursday presentation from the river authority that included the price.

The LCRA sets a plan in that presentation, dated April 7, to have the first phase of regional plants operational by 2028 and the second phase by 2033. In a statement, Tuma noted that the LCRA serves as a resource for the Legislature and is “committed to working with the Legislature and the executive branch in any way they direct us to help.”

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