Houston Republic

The Texas comptroller has granted EDF Renewables and the Electra Independent School District in Wichita County permission to cut a deal that will save the French company millions of dollars in constructing a solar farm, according to media reports.

However, the Electricity Reliability Council of Texas (ERCOT) and the Texas Council on Environmental Quality (TCEQ) will evaluate the potential impact of new wind and solar generation on the grid before it can be built.

“They have to do lots of engineering studies and, regardless of whether the plant turns out to be a winner or loser, it has to pass the engineering studies,” Robert Michaels, an energy economist and former professor at Cal State Fullerton, said.

If approved by ERCOT, the Public Utilities Commission (PUC) of Texas will ultimately have primary jurisdiction over the project, Michaels added.

“The Texas Council on Environmental Quality has a separate set of proceedings that are designed to show that that the plant is going to either not be a significant contributor to pollution or that any additional pollution causes are going to be well worth the cost,” Michaels told the Houston Republic. “In the case of a wind unit, the usual sources of pollution that matter to you are, of course, fuels and they are just not there with wind units.”

Dubbed Sunshine Hill Solar, the 500-megawatt solar facility has an estimated cost of $455.35 million, but the taxable value of the project would be limited to $40 million through Electra ISD renewable power generation tax abatements under Chapter 313 of the Texas Tax Code.

“It's called a bribe,” Michaels said in an interview. “You're basically trying to get localized support simply by buying out the local opposition and giving enough in the way of benefits so that it looks like you’ve done something really worthwhile for society, but it is by no means clear that that is what's happened.”

The Houston Business Journal reported that the comptroller certification shows an application was submitted by EDF that, if approved, will provide the company with $8.10 million in tax savings.

“If I were a local, I would be trying to get everything I could out of the local government, and I can tell you ‘good luck’ from the experience that we've had here in my city in California,” Michaels said.

Renewable energy subsidies are estimated to cost Texas taxpayers some $36 billion by 2029, according to a Texas Public Policy Foundation report.

"Like sports stadiums, there isn't a major league team in any sport that I know of that hasn't threatened to leave its host city if it doesn't extort something,” Michaels said. “The question is would EDF have chosen not to do this without tax incentives? That depends on what EDF's other opportunities are and whether another locality might be competing to host the plant.”