Failing to leverage proven technologies could cost Texas $18.9 billion
AUSTIN, TX – As utilities once again seek to raise electric rates, a new study commissioned by the Texas Advanced Energy Business Alliance (TAEBA) finds that better use of existing, customer-owned energy technologies could save Texans $18.9 billion over the next decade.
The study, produced by Demand Side Analytics, finds that better enabling the use of customer-owned technologies such as household solar and battery storage, electric vehicles, and smart appliances in ERCOT’s market operations and planning would save the average Texas consumer $1,851 during that 10-year period.
“Thousands upon thousands of Texas homeowners have already installed these technologies, but their potential to help the entire grid and lower costs for everyone is substantially underutilized,” said Matthew Boms, Executive Director of TAEBA.
The report’s findings are based on adding 2,500 megawatts of these home technologies into the state’s wholesale markets, where ERCOT buys the generation it needs to meet energy demand. Under current ERCOT rules, most customer-owned energy technologies are excluded from wholesale electricity markets, limiting competition and increasing costs. Current rules primarily benefit large generators and industrial customers.
By leveraging these technologies, called distributed energy resources (DERs), Texas utilities could defer $1.153 billion per year in infrastructure investment, totaling $8.208 billion over 10 years. Using these consumer-owned technologies also enhances market competition and mitigates price spikes.
The study comes as Oncor, a utility serving 4 million customers in 98 counties, has asked the Public Utility Commission of Texas (PUCT) to raise electric rates. Last year, TAEBA released a study of Oncor’s service territory, and found that by leveraging these technologies, Oncor could save its customers in that region $8.5 billion over the next decade.
“Texans value the resiliency and independence these resources provide, but ERCOT’s rules haven’t kept up,” Boms said. “This study shows that using energy already in homes and businesses would save all Texans money – even those who don’t own the technology themselves.”
During the last five years, Texas utilities spent $46 billion on infrastructure repairs and upgrades, and $79 billion over the past decade to maintain the status quo energy system.
“Certainly, some infrastructure improvements are necessary, but many of the expenditures could be reduced by modernizing the energy markets and rules. Doing so would protect consumers from unnecessary bill increases,” Boms added.
The report calls on Texas regulators and grid operators to modernize planning and market rules to allow distributed energy resources to compete on equal footing. One of the quickest solutions is for Texas to create publicly available hosting capacity maps – basic data showing where distributed resources can most efficiently connect to the grid. Texas is one of the only states in the country without one. This lack of transparency keeps customers guessing about opportunities for distributed projects to connect, leading to less investment and higher costs.
With electricity demand continuing to rise, the report argues that Texas cannot afford to leave lower-cost solutions unused.
Access the full report here.