Scorecard Summary
Texas produces and consumes more electricity than any other state in the union. In addition, Texas has great wind and solar production resources as well as the ability to expand energy efficiency programs throughout the state.
However, Texas utilities comprised of investor-owned utilities, rural cooperatives, municipal owned utilities and retail electric providers in general seem to be doing little to support customers with increasing energy efficiency or offering renewable choices at competitive prices. Furthermore, the Texas legislature has not increased statewide goals for energy efficiency or renewables in over 12 years.
The Lone Star Chapter of the Sierra Club set out to determine what electricity providers are offering customers and how well they are doing. It developed a set of questions/criteria to evaluate the different types of utilities on their offerings as well as their renewable power purchasing. Then we scored them (0 to 100) based on the data we found through public reports and their websites.
We confirmed our perception. Virtually all of the Texas utilities, retail electric providers, municipal utilities, and electric cooperatives have a failing grade in helping their customers with energy efficiency and increasing renewable power production. In fact, we only had three municipal utilities, four retail electric providers and three IOUs that had a grade of at least 60 points. Only a handful provided any incentives for electric vehicles and all of them have opportunities for improvement.
There is, however, some good news on the horizon. A number of the municipal utilities are in the process of making large investments in community solar and large-scale renewables and expanding efficiency goals, but have not yet made those investments. Others are still struggling to figure out how to retire legacy coal plants, but they are at least discussing it. We expect their scores to look better a year from now. In addition, our initial version of the scorecard concentrated only on the 40 Retail Electric Providers that sold the most electricity in 2019, 2020 and 2021, and for which we had data, but there are a number of new REPs that emerged after Winter Storm Uri in 2022 that are offering unique programs and platforms. We already have a few new REPs in this year’s scorecard, and In future versions we hope to add more of these newer REPs which are attempting to look at time-of-use rates , community solar and low or no-carbon options for customers. Stay tuned.
Want your Energy Provider to do a better job on their clean energy and energy efficiency programs, investments, and offerings? Click here to take action and tell your utility you expect better. Be sure to thank them for what they have done thus far.
Improving Your Utility’s Score
So Your Electric Provider Got A Bad Score? They can make it better.
The first version of our scorecard, largely based on 2018 data, found that very few utilities “scored” well. This latest version builds on the previous two versions and is largely based on 2021 and 2022 data. Unfortunately, most companies have not seen a real improvement in their clean energy efforts. What are some simple ways that energy providers could improve their scores in the future?
Report their Efforts
Electric cooperatives and municipal utilities that sold more than 500,000 megawatt hours in electric sales over the course of a year are required under Texas law to file annual reports with the State Energy Conservation Office on their energy efficiency, demand response and related programs. However, many did not bother to report on their 2021 programs, meaning they lost points.
All eight of the Investor-Owned Utilities we looked at did file their required reports to the Public Utility Commission on energy efficiency and demand response efforts, as required by state law. This is not surprising since they are required to do this in order to have their rates for those programs approved.
While retail electric providers are not required to report efforts to SECO or PUC, they are required to file annual reports with the Energy Information Administration (part of the US Department of Energy), and while all the REPs in our Scorecard did, most did not report having signed up customers for demand response or time-of-use programs, and many did not report on other energy savings efforts. Thus, if they have such programs, but did not report it to the EIA they left points on the table.
Energy Efficiency and Demand Response: Improve your programs and investments
We rated all four types of electric utilities -- IOUs, municipal utilities, electric cooperatives and retail electric providers -- on their energy efficiency and demand response programs. While we found one utility -- Austin Energy - that was actually setting and meeting a one percent savings goal through a variety of programs, while another - CPS Energy - recenlty set a similar goal, most utilities either had not established goals, or are setting and achieving very low state-required energy savings goals.
Thus, most electric cooperatives and municipal utilities were reporting very modest budgets and programs to help customers save energy and money. While many electric cooperatives, municipal utilities and IOUs offered some good basic programs -- like free energy audits or rebates on more efficient lighting -- very few offered comprehensive whole-house or whole-business programs. Commitment to “free” weatherization programs was also very modest. Some cooperatives and municipalities have begun good web-based portals where customers can see in near real-time their energy use, but many do not.
Finally, REPs are not required by state law to offer any incentives, rebates or programs for saving energy, but they can if they want to. In fact, some REPs have access to money for demand response programs offered by IOUs, but very few do. A recent 2023 law passed could change that by requiring IOUs to increase these programs, and also requiring the state to set a state residential demand response goal in the competitive market but it will take a few years to implement. There is also a wide discrepancy about even basic information offered by Retail Electric Providers on their website about how customers can save energy. Surprisingly few REPs have designed easy-to-use portals where customers can see their real-time energy use and save energy. Finally, REPs could be offering unique demand response programs where customers can save energy at peak times, or come up with unique Time-of-Use rates to get customers to save energy during peak demand times, but few do. The few REPs that do make demand response and customer-sited solutions part of their business model did better on our Scorecard.
There are some great resources out there on how to implement energy savings programs, from SECO, to SPEER to ACEEE.
Begin or Improve Community Solar and On-Site Solar Programs
Solar energy is getting big in Texas. Nonetheless, most utilities do not have solar programs to encourage customers to invest locally in solar energy.
Many energy providers-- including IOUs, electric cooperatives and municipal utilities -- did offer rebates or incentives to residential and in some cases commercial customers to add solar energy systems to their roofs or property. The best programs also put a fair value on any excess energy resulting from the system that went back into the electric grid, a concept sometimes called “net-metering,” while a different model known as “Value-of-Solar” is being offered by Austin Energy. A few electric providers or utiliites gave extra incentives for including distributed storage in the system and we provided additional points for those efforts
Most Retail Electric Providers gave no information about on-site solar, and almost no providers offered programs where they would buy back the excess solar energy coming from on-site solar, or if they do, we couldn’t find the information. REPs could improve their scores by coming up with a standard policy for Texans wanting to add solar to their roofs.
Investments in solar programs were even rarer, though some utilities have started programs. Community solar programs allow a utility to invest in a local solar project that customers can “buy” into. It is a way to own or lease a piece of solar power without actually installing it on your own property. The best of these programs included provisions where working Texans could get access to and benefits of local solar energy in an affordable or cost-saving manner. REPs, full service IOUs, Cooperatives and Municipally-Owned Utilities could all invest in community solar programs by working with solar developers, but very few have.
Invest in large-scale renewables
Nearly every energy provider in Texas could set a renewable energy goal, work to achieve it, and invest directly in renewable energy projects, but relatively few have. A few municipal utilities have set specific renewable energy goals, including two -- Denton and Georgetown -- that have set a 100% renewable energy goal, but most utilities have not set any goal. One utility -- Austin Energy -- has set a zero carbon 2035 long-term goal, though they failed to meet one of their main ways to meet the goals -- closing their portion of a coal plant by 2022 - as they negotiate with the co-owner on how to achieve that goal
In terms of on-the-ground investments, the scores can only go up. Utilities can invest in renewable energy in different ways. The easiest way is to simply buy “renewable energy credits,” essentially paying renewable energy plants an extra payment in return for getting credit for their energy. The RECs can be bought and sold. Thus, many utilities, including Retail Electric Providers, purchase RECs off the market but do not directly invest in new wind or solar development. The majority of the “100%” renewable options offered by Retail Electric Providers simply involve the purchase of RECs, which helps renewable energy, but does not generally lead to NEW renewable projects.
A superior method is to actually contract for the construction of a new renewable project through a Power Purchase Agreement or if possible by actually building your own project, and then credit the energy to customers. What should a utility do? Test the market. Put out a Request-for-Proposal and see what solar, wind and increasingly storage offers come out of the woodwork. The better utilities have been doing just that in recent years.
REPs can not directly own generation, but they can contract solar and wind power through third-party PPAs as some are beginning to do. In particular, some are beginning to actually work with third-parties on community solar projects.
However, municipally-owned utilities, electric cooperatives and vertically-integrated utilities outside of ERCOT can directly own renewables, or contract through a Power Purchase Agreement with renewable developers. Recent changes made through passage of the Inflation Reduction Act provide loans, grants and tax incentives which make it easier for these utilities to invest directly in renewable technology. We hope these companies move in this direction.
Make Commitments to Electrification of Transportation
Electric Vehicles are a reality with virtually every major car manufacturer now offering either all-electric or a plug-in hybrid electric option. But despite their increasing popularity, most utilities in Texas do not have specific programs designed to encourage this transition to the electrification of transportation.
Utilities could improve their scores by creating both time-of-use programs to encourage electric car drivers to charge cars at night when electricity is cheaper and there is less demand on the grid, and by offering incentives for purchasing electric vehicles or home/business charging infrastructure. A small incentive to encourage electric vehicles will ultimately help utilities because more electricity is sold. Assuring that charging stations have good communication with the grid to eventually allow vehicles to both obtain energy from the grid but also provide electricity to the grid.
Make Commitments to Programs for Working Texans
Electricity can be very expensive, particularly for working/lower-income Texans. In light of the COVID-19 pandemic which affected so many Texans health but also the ways we work, many more Texans are working from home or even attending school virtually and energy use and bills have in many cases gone up. But utilities can make commitments to help those least able to afford high electricity costs. They can target energy efficiency programs to lower income customers, for example, offer free weatherization programs for both homeowners and renters and educate the public about how to reduce energy use, especially at peak times. They can provide discounts on energy bills. They can make special community solar programs affordable to all Texans. They can come up with unique onsite solar programs that everyone can afford. They can make sure that 100%” Green” renewable options are the same cost -- or less -- than “dirty” fuel options.
