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Texas Council: Ease Reliance on Gas, Avoid Reregulation

Texas should repeal portions of its Public Utility Regulatory Act (PURA) that favor gas-fired plants and take other actions to promote a more diverse generation mix, and the state should resist efforts to reregulate the retail energy market, according to the Governor's Competitiveness Council (GCC).

In its 2008 Texas State Energy Plan, which the GCC delivered to Gov. Rick Perry on Wednesday, the GCC made 37 recommendations related to wholesale markets, transmission and distribution, energy efficiency and demand response, retail markets, work force and governance. "Texas is at a crossroads in planning its energy future," the GCC said in the plan.

"Texas' heavy reliance on natural gas has resulted in significantly increased electricity costs. Texas' competitive wholesale market is responding to these factors by attempting to provide a diverse mix of new generation. Yet, in order to reduce the impact of natural gas on Texas electric rates, a substantial amount of new non-gas baseload generation (as much as 24,000 MW) is needed.

"However, because of the pending threat that federal legislation will extort heavy penalties on companies that generate electricity with conventional coal technology, generation companies are increasingly reluctant to invest in new conventional coal-fired power plants at the scale necessary to positively impact power prices."

Among its recommendations, the GCC said Texas should:

In November Perry appointed to the GCC 29 private sector, education and state agency leaders, charging the them with recommending ways to enhance the state's economic footing in emerging industries. Texas Railroad Commission Chairman Michael Williams serves as chair of the council.

"Although there are many specific steps that must be taken in the near future to provide an abundant, clean and reliable energy infrastructure, the bottom line is that we must diversify our energy portfolio if we hope to meet the needs of our growing population," Williams said. "This includes developing responsible ways to extract oil from offshore deposits and natural gas deep within the Barnett and Haynesville shales, accelerate the transition to carbon capture and storage while expanding the share of renewable energy from wind, biofuel, solar and nuclear and wisely using the energy that's produced," Williams said.

The 2008 Texas State Energy Plan and other GCC reports are available at www.governor.state.tx.us/gcc.

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