June 22, 2012

Savvy Consumer: Renewable energy has also become affordable

Electric providers offer 52 renewable energy plans to customers in North Texas.

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The heat is taking over in North Texas, and that means higher electric bills and probably more air pollution.

But there is an alternative to those problems to consider the next time your electric plan is up for renewal: Switch to a renewable energy plan.

Pollution-free, renewable energy plans sold by retail electric providers have come a long way since 2006, when just three providers offered them at a steep premium over their fossil fuel counterparts. Today, rates have come down significantly, with most plans in the 7- to 9-cent range -- not much more than most fossil-fueled plans in the North Texas market.

And there are plenty of plans to choose from. Twenty-four retail electric providers offer 52 plans tied to 100 percent renewable sources, according to the Public Utility Commission's website, And most nonrenewable plans available to North Texans now include at least a small renewable component in their energy mix.

REPs are responding to a public that is increasingly aware of the environmental benefits of renewable energy, said Russell Smith, executive director of the Texas Renewable Energy Industries Association in Austin.

"Retail electric providers are looking for reasons to bring people into their programs," he said. "Renewables are a competitive piece for them."

Last year, renewable energy use rose 13 percent from a year earlier, according to the Electric Reliability Council of Texas, the grid operator for most of the state. Renewables accounted for 9 percent of ERCOT's energy use in 2011.

Wind energy, by far the largest renewable, topped 30 million megawatt-hours last year, the most in the nation. On June 19, wind generation hit a record 8,368 megawatts and was steady enough to provide 17.6 percent of all the electricity ERCOT used that day. It reached another record by carrying 20 percent of the total load, according to ERCOT.

But other forms of renewable energy are also coming into the picture, including solar, biomass and landfill gas, each growing in production in Texas. The fastest gain has come from solar, which increased 153 percent from 2010 to 2011, producing 35,000 megawatt-hours last year, ERCOT says.

Smith said that by combining new wind power installations in South Texas with solar arrays -- both producing at their strongest during peak usage needs in the state -- renewable generation can provide a stable price that acts as a hedge against the up-and-down pricing of fossil fuels, particularly natural gas.

Renewables are also playing an important role in increasing production for a large state with growing energy needs, Smith said.

"Last year, the grid did not have blackouts or brownouts," he said. "South Texas winds played a significant part to see that didn't happen."

The lowest renewable rate in North Texas for a 12-month contract was 8 cents a kilowatt-hour, offered by three REPs on Friday, according to the PowerToChoose website. The lowest 12-month conventional rate is 7.6 cents.

"We are seeing environmental considerations gaining more and more influence in consumers' purchasing decisions, and we want to be ahead of that curve," said Nancy Donnaperna, spokeswoman for Just Energy, the Canadian parent of Tara Energy, one of the REPs offering renewable power at 8 cents. "We realize that it is difficult for people to drastically change their behavior in the short term, so offering convenient and affordable ways to make a difference now really resonates with consumers when choosing electricity plans."

Houston-based Reliant Energy also offers a rate of 8 cents on its six-month plan.

Reliant was the largest buyer of renewable energy credits -- the way electric providers account for their renewable customers to their usage on the electric grid -- in 2010, the most recent year for which data is available from ERCOT, said Pat Hammond, spokeswoman for the company.

"Our parent company, NRG, has taken a very progressive stand for advancing renewable energy and is one of the leading developers of solar power in the U.S.," Hammond said.

The Legislature set a goal of 10,000 megawatts of production by renewables by 2025. That goal was reached in 2009.

The industry association has a goal of 20 percent by 2020, Smith said. But he is concerned that favorable tax policies for new renewable production are at risk at both the state and national levels.

"I think we had good momentum, but in the last two years there has been a major effort to desecrate renewables in the marketplace," he said. "Production tax credits are all under attack, and we fear this will stymie or possibly terminate renewable generation projects."

One of the biggest projects -- building transmission lines to bring electricity from West Texas wind farms to the eastern half of the state -- is scheduled to be in place next year, said Terry Hadley, a PUC spokesman.

"That should encourage future development and handle more renewable production to the grid," he said.

Austin-based Green Mountain Energy, the only REP selling only renewable energy plans, also sees a strong future for the product.

"Texas energy customers have clearly demonstrated their support for electricity made from clean, renewable resources such as wind," said Paul Markovich, president of residential services for Green Mountain. "We see nothing but growth for the renewable energy market in Texas."

Teresa McUsic's column appears Saturdays. TMcUsic@

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