"Rick Perry attempted to fast-track unnecessary coal-fired power plants, which degrade air quality and would cost billions. Fortunately, a court stopped him."
Bill White on Monday, May 17th, 2010 in an e-mail
White says Perry fast-tracked unncessary coal-fired power plants until a judge stopped him
Bill White, the Democratic nominee for governor, recently blasted his opponent's environmental record, saying in a May 17 press release: "Rick Perry attempted to fast-track unnecessary coal-fired power plants, which degrade air quality and would cost billions. Fortunately, a court stopped him."
We wondered if White's salvo is on target.
Some history: Perry issued his so-called fast-tracking order Oct. 27, 2005, "to encourage diversity of energy supply." The order told the Texas Commission on Environmental Quality, which is responsible for judging requests for permits to pollute the air, to "prioritize and expedite the processing of environmental permit applications that are protective of the public health and environment and propose to use Texas' natural resources to generate electrical power."
The order, issued as natural gas prices climbed and after Hurricane Katrina disrupted natural gas production, shortened administrative hearings on permits, which normally took about a year, to six months. At the time, Perry said he was hoping to spare electricity consumers from rate shocks due to the surging price of natural gas.
A few months later, TXU Corp., a Dallas-based energy company, announced plans to double its power production by building eight coal-fired units. Company executives were joined by Perry at their April 2006 press conference, according to the Dallas Morning News. The company, which had submitted a permit application for two new coal-units in July 2005 and had plans to build another unit permitted by the state in 2003, said it would cost $10 billion to complete all 11 units. TXU also promised to cut emissions of pollutants including sulfur dioxide and nitrogen oxide and mercury by 20 percent, saying it would spend $500 million on equipment to control pollution at three of its existing coal-fired units in Texas.
In a Sept. 8, 2006, press release, Perry defended his order and TXU's proposal, saying "the TXU plants are important to diversifying our energy supply so Texans do not face rate shock every time natural gas prices spike up."
TXU was then the state's biggest emitter of carbon dioxide, one of several greenhouse gases widely thought to be fueling global warming. The utility acknowledged the proposed plants would emit 78 million tons of carbon dioxide per year, in addition to the 55 million tons per year company plants were already emitting, according to the Morning News.
Where was White as Perry aligned with TXU? As Houston's mayor, White opposed the eight proposed units as a member of the Texas Cities for Clean Air Coalition, which was formed by then-Dallas Mayor Laura Miller in August 2006 to challenge coal-fired power plant pollution. In September 2006, the Houston Chronicle quoted White saying: "We need to make sure that power plants built for today have minimal emissions and contributions to global warming, the greenhouse gases, where we will see increasing regulation in this country, and in other countries, in the future."
TXU and anti-coal groups faced off for and against the proposed plants, while four groups consisting of people living near proposed plant sites sued Perry, calling his executive order unconstitutional. And in February 2007, a state district judge blocked it, saying Perry overstepped his constitutional authority in "directing a hearing officer to hold a hearing and reach a decision by a particular deadline." The judge issued an injunction that restored power to administrative law judges to delay a hearing on TXU's permit application. The judges then postponed the hearing until June of that year.
Next came a big twist. In the following months, TXU was bought out by private owners, who quickly withdrew requests for permits to build eight of the 11 coal-fired units. In June 2007, the commission granted a permit for the two surviving units, going against an administrative judge's recommendation that the agency reconsider its approval after TXU failed to prove that technology to be used at the plant would effectively control emissions.
Of late, Texas utilities — not including Luminant (formerly TXU) — are seeking permits for five more proposed coal-fired and petroleum coke-fired plants.
So, Perry issued his speed-up order, which was canceled by a judge, as White says. Also as he says, the 11 coal-fired power units that TXU wanted to construct were expected to cost billions.
Finally, let's circle back to White's contention that the plants were unnecessary. That's debatable.
In 2006, the Electric Reliability Council of Texas (ERCOT), which manages the power grid that serves most of Texas, forecast that the state needed fuel diversity to offset its dependence on natural gas, and new sources of energy to keep up with electricity demand — a tenet of Perry's 2005 order.
However, anti-coal opponents who led the lawsuit against Perry's order argue that even if the state needed to generate more electricity, it should have come from cleaner energy sources such as wind power. Nathan Melson, president of Citizens Organizing for Resources and Environment, a nonprofit that organized in 2006 against TXU's proposed coal-fired plant in Savoy (about 70 miles north of Dallas), and one of the groups that sued Perry said: "We've all got to have electricity and we all have to live, but we ought to be looking at other technology out there."
Another indicator: Whether electricity demand would have been met without the requested plants. Generally, ERCOT says, a reserve margin of at least 12.5 percent above the state's peak electricity demand is necessary to spare Texas customers frequent power outages.
Theresa Gage, an ERCOT representative, told us she didn't know of any instance when ERCOT has operated below the reserve margin. "However, in 2006, projections showed that by 2009, with no new generation brought online... ERCOT would drop below the 12.5 percent margin," she said. "The 11 TXU plants — the three that were built and the eight that were not — would all have contributed to pushing the reserve margin to and above 12.5 percent."
In the meantime, other power sources have filled the gap. Some 127 units have come online since 2006, adding 14,494 megawatts of power to the state's grid. About half of the added capacity is coming from wind energy, which generates 7,318 megawatts of power, trailed by gas (4,251 megawatts) and coal (2,913 megawatts).
"We're where we need to be," Gage said. And On White's campaign spokeswoman Katy Bacon said that because Texas has generation capacity greatly exceeding ERCOT's recommended reserve margin, the state never needed the eight plants contemplated by TXU.
In contrast, Catherine Frazier, a spokeswoman for Perry's campaign, said that "construction of some of those (TXU-sought) plants is precisely why we're not looking at power shortages today." The three TXU coal-fired units that ended up getting built provide a combined 2,141 megawatts of power, according to ERCOT. "If you remove them from the calculation, then we are below the 12.5 percent margin starting in 2013, and below the 10 percent margin by 2015," Frazier said, citing ERCOT's projections.
Unsaid: One of those units Frazier referenced had a permit two years before Perry issued his order and TXU had already applied for permits for the other two. His order didn't affect the first plant, but the other two stood to benefit from the expedited process, according to the TCEQ.
Where does all this leave White's statement?
Perry tried to speed up the environmental-permitting process for utilities and his order was later blocked by a court. Also, those plants would have cost billions.
Whether the plants were unnecessary, as White puts it, depends on whose argument rings your bell. White is right in that plants fueled by other sources helped satisfy the state's electricity needs. Yet he's wrong if the few coal-fired plants that were completed helped Texas avoid a demand crisis. We're calling it a draw.
The standoff on the question of necessity leaves White's statement Mostly True.