by Richard Golladay, PEC Member
A recent change in Pedernales Electric Co-op’s Board makeup imperils the very founding principle of the Co-op, and thereby may threaten a great plan the previous Board adopted in PEC’s 2015 “Strategic Blueprint”. That plan was to implement “Distributed Generation” (DG) in the form of “Community Solar”. These installations would be at fifteen locations in PEC’s service area – each slightly less than 1 megawatt (mW) in capacity.
“Distributed Generation” (DG) feeds PEC’s system on its own distribution feeders, bypassing the high voltage ERCOT grid and thus reducing ERCOT’s “Transmission Cost of Service”, or “TCOS” charges. But, there is a restrictive ERCOT-imposed caveat: Each distributed source of power must be less than a paltry 1 mW in size to avoid being counted against TCOS. (And TCOS charges to PEC for larger than 1 mW-size DG installations would be increased even if that power strictly stayed within PEC’s system, and never even got out onto the ERCOT system!)
ERCOT’s TCOS charges represent about 10% of PEC members’ electric bills, and costs PEC’s member-owners about $60,000,000 per year! Electric Co-ops in Texas are currently handcuffed by ERCOT’s overly restrictive DG rules. “Distributed Generation” is the wave of the future for grid reliability, local control, and cost reasons. In Texas, solar-DG will become a critical asset during the next extreme drought. But because of load growth and transmission line congestion, if ERCOT does not ease up and facilitate this new paradigm Texas consumers will face increasingly higher ERCOT TCOS charges, and may suffer rolling blackouts during the next 1950’s-style drought.
In spite of the current ERCOT limitation, “Community Solar” is PEC’s best option to implement “Distributed Generation”. Solar production overlaps the most costly time of day for buying power off the grid. By avoiding 15 mW (barely 1%) of its grid-delivered power with Community Solar installations during summer peak times, PEC will reduce TCOS charges by $500,000 per year, or more. Member-owners of PEC will also be able to purchase shares in this project – the next best way of enjoying the benefits of solar, short of installing panels at home.
But PEC is beginning to veer off course. As of the last Board election this June, PEC now has four Directors who were elected in part because of support from special interests who want to impose “Customer Choice” on the Co-op. The companies behind this on-coming “customer-grab” (and whose large generation providers dominate at ERCOT) can’t possibly compete with a Co-op with significant DG, and they know it. But PEC’s member-owners largely have not awakened to this fact, and are being baited with promises of lower rates from investor-owned “Retail Electric Providers” – promises as vaporous as a West Texas mirage. Furthermore, customers served by “Retail Electric Providers” in deregulated markets of Texas pay, on average, 15% more for their electricity than in exempt markets, such as our 75 locally-owned Electric Co-ops and municipal electric companies.
PEC’s member-owners need to stay the course by backing “Community Solar” and rejecting “Customer Choice”. PEC’s member-owners should not allow special interest Board members to derail the only true path to lower rates. The misleading mantra of “Customer Choice” is not the path to lower rates. “Distributed Generation” is. For PEC, 15 mW of “Community Solar” is a good, albeit small, first step. And small steps could lead to bigger steps down the road. The more “Community Solar”, the better.