What Can We Expect From Electric Utilities This Year?

Save Money, grid, environment, all of the above

By Matt Johnson

Last year, when the electric utilities responsible for meeting the state’s meager energy efficiency goal presented their plans to the Public Utility Commission of Texas (PUCT), Sierra Club was there. These plans are the starting point for numerous programs around the state that help homes and small businesses weatherize their homes and help them lower their energy bills by reducing wasted energy. 

Utilities can build much bigger energy efficiency programs to help Texans, but we’ve seen for years that they just don’t build big programs if they don’t have to. They tend to spend just enough on them to meet a small goal and earn themselves a big performance bonus in the process (see what happened last year).

We, of course, called them out on that and advocated for stronger investments because, not only do these programs help people, they also help stabilize the grid (by lowering electric demand), and lower pollution (by relying less on polluting power plants), and grow jobs in Texas. 

In fact, in two cases, we actually intervened in mini-rate cases, asking both Oncor and American Electric Power (AEP) Texas to do more for residential consumers. Ultimately we settled those cases in return for a series of meetings with the utilities and their contractors to see if by sitting at the table we could get them to improve their programs. 

Why don’t utilities invest more in helping homes and businesses become more energy efficient? Well first, simply put, it means they earn less money for their investors. They have a financial incentive to sell us as much electricity as they can, even if it means we’re wasting a lot of it through leaky homes. Second, the PUCT, which must approve their plan, has not encouraged utilities to spend more than the minimum amount they need to meet their meager goals, despite numerous statements about how energy efficiency and demand response could help “fix the grid.”

So what can we expect these utilities to do differently this year? Based on their activities last year, we’re not optimistic they will improve them too much. They fought legislation (SB 258) that would have increased the state’s goal for energy efficiency for the first time since 2011. While the legislature did pass one modest bill (SB 1699), which is supposed to encourage utilities to create new residential demand response programs, so far the PUCT has yet to put any required rules around that law. Hopefully, our initial discussions with Oncor and AEP Texas might lead those two at least to suggest some additional changes. While we appreciate the opportunity to learn and discuss with these utilities directly, it remains to be seen if they’re persuaded to change their treatment of energy efficiency in a meaningful way. 

We will get a first glimpse of those plans on February 28, when the PUCT will hold a public meeting at which the utilities will lay out their initial plans. The meeting is public and will be broadcast live here - https://texasadmin.com/tx/puct/workshop/20240228/. In the meantime, the Sierra Club Lone Star Chapter filed comments in the project, noting the lack of promised action on demand response and energy efficiency. 

Our Conservation Director, Cyrus Reed, will be at the PUCT for the first round of proposal sharing on February 28, and will have an update soon thereafter. Actual official plans are then due April 1. Stay tuned!