CONSUMERS FOR
Affordable Reliable Gas Operations
An Affordable, Reliable Texas Grid Requires Transparency
In 2022, roughly 43% of the electric supply in ERCOT was generated by natural gas resources. During times of high demand and low output by intermittent resources, such as Winter Storm Elliott, natural gas generators produced almost three-quarters of ERCOT’s electricity.
Clearly, the dispatchable power provided by natural gas resources is crucial to the ERCOT market. As such it is imperative that natural gas is transported and stored transparently, efficiently, and fairly.
Consumers for Affordable Reliable Gas Operations, a nonprofit coalition of market participants, supports measures to reform the intrastate pipeline system to ensure market transparency and eliminate predatory price gouging. These efforts will maintain Texas’s natural gas dominance while ensuring affordable, reliable natural gas is available for all Texas consumers.
The Issue
The Need for Natural Gas Reform
What happens in the intrastate gas market is inextricably linked with both electric reliability today and in the future. And, the impacts affect the electric costs paid by end-use electricity consumers, from large industrial to residential.
Obviously, natural gas generators need an affordable, reliable supply of natural gas in order to generate the electricity Texans rely on. To achieve this, Texas needs regulations that ensure just and reasonable rates as well as competition on Texas intrastate pipelines.
Lack of Information
In Texas’s intrastate pipeline market there is a lack of information to all gas buyers in terms of capacity and flows, delivery and receipt points, and transportation and storage rates. Further, there is an absence of a competitive capacity release market. Together, this lack of transparency makes it uneconomic for nearly all generators to obtain a firm contract for the maximum gas they might need.
Lack of Choice
Some consumers in Texas only have one choice of pipeline when procuring gas. This type of monopoly allows for the pipeline to engage in predatory pricing or conditions.
For example, some electric generators are forced into a take it or leave it situation where they have no visibility of the information pertaining to the pipeline and are unable to negotiate the terms. This may include the inability to obtain a firm contract from the pipeline that serves them. The generator is then forced to find another source of fuel.
Lack of Certainty
If a generator is dispatched by ERCOT but lacks enough fuel, then the generator has to purchase additional fuel, often at a high cost. This is especially true if the generator is on an intrastate connection only and limited in choice to only the pipeline or its affiliate.
Now is the Time for Reform
The future of electric reliability in ERCOT is directly linked to establishing the guarantee of competition, not just among pipelines and their marketing and transportation affiliates, but by guaranteeing in for every aspect of the industry from producers to end-use consumers – be they generators, chemical plants, convenience stores, refineries, or homeowners. Similarly, the Texas economic development miracle is contingent upon reliable electricity and reasonable consumer electric costs that are predictable.
Without these intrastate pipeline changes, neither of those is likely for the foreseeable future.
Let your Texas legislators know you want common sense pipeline reform that will help make the Texas grid more reliable and electricity more affordable. Voice your support for the following legislation currently under consideration in the Texas Legislature:
- SB 1872 by Senator Charles Schwertner
- SB 1873 by Senator Charles Schwertner
- SB 2110 / HB 4790 by Senator Nathan Johnson and Representative Rafael Anchía
- SB 2111 / HB 4984 by Senator Nathan Johnson and Representative Rafael Anchía
Find your legislators here.
NEWS
PRINCIPLES
Affordability – Texas is blessed with an abundance of natural gas. Competition among pipelines and their marketing and transportation affiliates will help keep costs and bills lower for all Texans.
Reliability – In order to run our electric grid, heat our homes, and conduct our businesses, Texans need a reliable, stable gas market. With the proper policies and investments, we can ensure that our gas supply is available and predictable when we need it to keep us safe and prosperous.
Transparency – In an open and free market, information about how much gas is available and at what cost should not be kept from consumers. As in most of the country, there should be transparency in the intrastate pipeline market that allows consumers to make informed choices.
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