Published on November 8, 2023, 3:44 pm

Texas Voters Approve Billion-Dollar Energy Fund To Enhance Natural Gas Power Plant Infrastructure

Texas voters have approved a billion-dollar state-managed energy fund to enhance natural gas power plant infrastructure. Proposition 7, also known as the Texas Energy Fund, passed with a 65% to 35% vote and received over 2.5 million ballots cast. This measure sets aside $5 billion for low-interest loans that will support new dispatchable power generation in the state.

The approval of this ballot proposition has delighted the energy industry but displeased environmentalists. “TXOGA is pleased to see infrastructure propositions to expand water, electricity and broadband pass with overwhelming support from voters,” said Todd Staples, president of the Texas Oil & Gas Association. He further added that this approval ensures that Texas remains an excellent place to live, work, play, and raise a family.

Proposition 7 aims to strengthen the reliability of the electric grid in Texas and increase its electricity supply by encouraging additional generation. Governor Greg Abbott signed legislation preparing for this vote and expressed his satisfaction with the outcome, stating that it will reinforce the state’s power grid.

This measure is part of Senate Bill 2627, which was signed into law earlier this year. It stipulates that loans financed by the Texas Energy Fund must have a 20-year term with an interest rate of 3%. The funds can be utilized either to upgrade existing dispatchable power generation or construct new power generation with a minimum capacity of 100 megawatts (MW). A natural gas power plant with such capacity can provide electricity for tens of thousands of homes.

The state’s efforts to incentivize power companies to expand natural gas power generation are aimed at addressing concerns about inadequate energy supplies during emergency peak periods. Peter Lake, former Public Utility Commission Chair for Texas, highlighted that while demand has increased by 24% between 2008 and 2020 due to population growth, dispatchable power supply grew only by 1.5%. This issue becomes more critical as Texas becomes increasingly reliant on intermittent green energy sources like wind and solar, which are not readily dispatchable.

Texas has been a leader in wind-generated electricity, accounting for 26% of the nation’s total in 2022. Nonetheless, natural gas continues to dominate as the primary source of electricity generation in the state.

Proposition 7 received support from major industry players such as the Texas Oil and Gas Association, ConocoPhillips, Texas Association of Manufacturers, Texas Pipeline Association, and Valero Energy Corporation. On the other hand, it faced opposition from environmental groups including the Sierra Club, Environment Texas, Texas Advanced Energy Business Alliance, and Texas Consumer Association.

The passage of Proposition 7 is seen as an important step towards strengthening Texas’ energy infrastructure while meeting increasing demand. It is expected to play a crucial role in securing a reliable power supply for the state’s residents and economy.

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