Faltering Texas Energy Fund Projects Are a Win for Community Organizing and a Warning to Lawmakers
Five projects totaling more than 1,900 megawatts of generating capacity notify the state of intent to withdraw
AUSTIN, Texas – Citing community opposition and lower expectations for financial returns, Constellation Energy and WattBridge respectively notified the state last week they were withdrawing from the Texas Energy Fund (TEF), dealing another black eye to the state’s effort to stabilize the Texas electric grid with new methane-fueled power plants.
Constellation Energy, which was approved for TEF financing to build Wolf Hollow III in Granbury, notified the state of its withdrawal from the program passed by the Texas Legislature and sold to voters as the post-Winter Storm Uri answer to grid stability. WattBridge, approved for TEF financing for four projects totaling more than 1,600 megawatts of generating capacity the company would build in the Houston area, notified the state last week of its withdrawal.
“This is truly the best news I have had in a year and a half,” said Cheryl Shadden, a Granbury resident who helped organize the opposition to Wolf Hollow III. “Any other community in Texas facing a similar situation needs to know that it can also win if its people come together to fight back against a polluting facility that could harm public health for the sake of profit. This is a super win for all of us. Let’s stop this in Texas.”
“The people of Granbury pulled together and sent a clear message to Constellation and state leaders: not without a fight. No one should expect the opposition to fade even if former TEF applicants find other ways to pay for a costly gas plant,” said Adrian Shelley, Texas director of Public Citizen. “The community win in Granbury, and the market factors cited in WattBridge’s letter are the latest signs that fossil fuels are not the answer to the Texas grid’s demand-supply equation. The silver lining is that there are answers immediately available to lawmakers, including using the TEF for comparatively cheaper and easier-to-implement renewable energy projects and strategies, like energy efficiency and demand response, that lower energy demand and keep utility bills from increasing. It is urgent to make the pivot. The state grid operator, ERCOT, has warned that energy demand on the grid could double in the next five years. The Texas Legislature and Gov. Greg Abbott’s insistence on increasing the state’s dependence on fossil fuels waste time Texas doesn’t have to avert an energy crisis.”
In its letter of intent to withdraw, Constellation Energy wrote it wouldn’t pursue TEF funding “due to the uncertain timing of the issuance of an air permit for the project.” On Feb. 13, a group of Granbury residents successfully petitioned the Texas Commission on Environmental Quality (TCEQ) to grant a contested case hearing, which extended the timeline for Constellation to obtain the needed permit for more than six months. WattBridge, for its part, told the state it expected lower than anticipated returns if it built the four proposed plants with TEF funding.
ENGIE notified the state in February that it withdrew from the TEF for its proposed plant in Corpus Christi. In early January, Howard Power Generation made a similar announcement for its Javelina Power Plant proposal in Corpus Christi. In Sugar Land, city leaders also ended their pursuit of a new power plant after the city’s proposal was rejected for TEF funding and difficulty in obtaining financing outside of the TEF.
To date, no TEF project has generated a single megawatt of electricity. The remaining TEF projects have yet to break ground and are years away from starting operations.