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Lawmakers: Texas must plan now to avoid energy shortages


The city of Lubbock suffered at least two power outages last year, but they were minor compared to other regions of the state, according to state Rep. John Frullo.

But Frullo, Rep. John Smithee and other legislators said Wednesday what happened in 2011 — when millions of people in Central and North Texas experienced up to eight hours of rolling blackouts — could happen again, unless the Legislature and utility companies address the rapidly growing energy needs of the state.

“I think it’s very important that we start looking at the availability and reliability of pricing of electricity,” Frullo, R-Lubbock, said after the House State Affairs Committee heard from some witnesses who said that in 2011 some power companies ran low on their electricity reserves.

“We need to make sure that we have a good plan to move forward,” Frullo said. “We do have the time to address those needs but we need to make sure we have a plan.”

Some of the witnesses said the extreme weather conditions in the winter and summer of last year triggered a much-higher-than-usual demand for power, forcing some utility companies to run low on their reserves.

“2011 was so anomalous,” said Phillip Oldham, who spoke on behalf of the Texas Association of Manufacturers.

Because of the drought and extreme weather conditions, “2011 needs to be viewed in the proper context,” said Oldham, who was responding to a question from Rep. Patricia Harless.

Harless, R-Spring, had asked Oldham if he thought the Legislature “was crying wolf” for addressing the issue. He responded it was a legitimate concern because the state is rapidly growing and this means more demand for power.

Donna Nelson, chairwoman of the Public Utility Commission and Trip Doggett, president and CEO of the Electric Reliability Council of Texas — which operates the grid for 75 percent of the state — said they also were concerned about the growing energy needs of the state.

Nelson told the House State Affairs Committee the commission will vote on the proposal Thursday.

She said raising the maximum price a generator can charge is needed to make sure there is enough electricity available during peak periods.

The wholesale price is $4,500 a megawatt hour, and that price could go up to $9,000.

The Texas electricity market pays only for electricity provided, not on the capacity available. Officials said low prices have kept generators from adding more capacity, and therefore creates the possibility of a shortage if something unexpected happens.

“We were very close in the summer of ’11 of running out of reserves,” Doggett told the panel.

Though the Texas Panhandle and the South Plains have hardly suffered any power shortages compared to some regions of the state, West Texas keeps building generation plants and wind farms to keep up with the growing demand for electricity, Mark Schwirtz of Amarillo told the panel.

Schwirtz is president and general manager of Golden Spread Electric Cooperative, a consumer-owned public utility serving most of West Texas, from the Texas Panhandle to San Angelo.

Schwirtz said that, like water companies, power companies also advocate conservation.

“Any kilowatt you don’t consume is a dollar saved,” he said. “If you care about rolling blackouts you should be concerned. Folks don’t believe we should be out of power, that’s why we’re here today.”

Smithee, R-Amarillo, said though he agrees power outages are not a problem in the Panhandle/South Plains region, “this is an issue of vital importance to Texas.”

“Ninety five percent of the time we have more than enough capacity,” Smithee said. “The problem is when we have this peak capacity.”

One way to reduce the risk of rolling blackouts is to reduce demand in peak periods, he said.

Moreover, like some of the witnesses told the panel, the growing demand for electricity also costs money that consumers ultimately pay for, Smithee said.

“When you combine the residential demand, like air conditioning, with industrial and commercial use, we understand that this is going to increase rates,” he said.

John Fainter Jr., president and CEO of the Association of Electrical Companies, went a step further.

“Nobody likes to pay what they are paying for electricity,” Fainter told the committee. “But they do want reliability, whether operating a business, an industry or turning on their TV to watch the (Dallas) Cowboys and the (Houston) Texans.”