Texas Voters Poised To Bet On Natural Gas To Shore Up State Power Grid

Texas will vote Tuesday on a ballot proposition aimed at bolstering the state's natural gas power generation capacity and shoring up the state's electrical grid.

If passed, Proposition 7 would create the "Texas Energy Fund," initially allocating a total of $10 billion to the state's energy grid.

Proposition 7, also known as "Prop 7," would allocate $7.2 in low interest loans reserved for constructing new natural gas power plants and repairing existing facilities, in addition to $1.8 billion for backup power capacity, and another $1 billion for financing contracts outside of the jurisdiction of the Electric Reliability Council of Texas (ERCOT), the state's utility provider.

Available polling data suggests that Prop 7 will be approved by a comfortable margin. An October poll conducted by the University of Houston and Texas Southern University found that 68% of likely voters are "for" the measure, including 75% of voters in the "Millenial/Gen-Z" age demographic.

The Texas state government had a $32.7 billion budget surplus in the previous fiscal year, bolstered largely by high profits from the numerous oil and gas corporations headquartered in the Lone Star State.

The Impact of Proposition 7

Recent shortcomings in Texas' privately-owned, state regulated electrical grid serve as the primary impetus for Prop 7.

In February 2021, ERCOT was forced to implement blackouts during an unprecedented winter storm, leading to an estimated 246 deaths and billions of dollars in property damages as the state's power generation facilities failed to adapt to cold conditions and meet demand.

As global temperatures continue to rise and summer heat waves become progressively more extreme, state regulators have warned that Texas' power generation capacity is insufficient for "peak" demand conditions. Still, some experts warn that Prop 7 may not necessarily yield its desired effects.

"Whether proposition 7 passes or doesn't pass, it's not going to have any kind of immediate impact on the grid simply because it does not provide the incentive to actually build a plant in the first place," University of Houston Energy Fellow Ed Hirs told Houston Public Media in October.

Others have criticized the ballot initiative for directing the recent budget surplus exclusively towards natural gas, apparently at the expense of renewable energy technologies. "Incentivizing gas but not wind or solar with batteries, that's the sign this is not really about building more power plants," Michael Webber, an energy specialist at the University of Texas at Austin, told San Antonio Express News.

Texas is currently the United States' largest producer of solar and wind energy when measured by annual power generation, even outpacing the more populous California. Before considering the impact of Prop 7, the EIA projects that Texas will source over 30% of its power generation from wind and solar energy by 2035.

At any rate, considering the polling landscape, Proposition 7 is likely to be approved and enacted. It remains to be seen whether the initiative ultimately improves Texas' peak grid capacity, hampers the state's renewable energy sector, or accomplishes a combination of the two.