When it comes to choosing an electricity package, Houstonians have a lot of choices. Around 40 various retail electricity suppliers offer plans depending on affordability, family size, and renewable energy programs, which are becoming increasingly popular. Even if you have a renewable energy program, your home is still run on a combination of nuclear, wind, gas, coal, and solar energy.
“We can’t split electrons into buckets and provide individual electrons to someone’s house,” explains Rebecca Bridges, CMO (Chief Marketing Officer) of ElectricityPlans.com. Bridges compared the Texas electrical grid to a pot of soup, in which power plants — whether wind, solar or natural gas – provide the components, in this instance, electricity. Like stirring contents into a simmering soup, power plants feed electrons onto the system. Once on the grid, electrons become part of a soup that is distributed to houses. “In the year 2021, (the Texas grid manager) ERCOT projected that wind would provide nearly 29 percent of power and solar would provide 6 percent,” Bridges said.
Renewable energy programs are distinguished by something known as a Renewable Energy Credit or a Renewable Energy Certificate, which is commonly referred to as RECs in the electrical industry. “It’s an accounting system,” explains Mike Hoke, the Public Utility Commission’s Director of Government Relations. “When a consumer adopts a renewable program, their retail energy provider purchases RECs, and ERCOT handles the actual acquiring and trading of them.”
According to Hoke, ERCOT serves as a trading floor for such Renewable Energy Credits. For every megawatt of the green electricity added to the Texas grid, a renewable energy power facility generates one REC, such as a solar or wind farm. Retail electricity suppliers and others then purchase these RECs. An electricity provider must acquire Rec’s equivalent to the quantity of power utilized in order to ensure that the program is supported by renewable power and then pull that REC out of rotation. The company is no longer able to resell or trade the credit.
“The goal of the program is to prevent double-counting of the very same electron,” Hoke explained. “When someone buys a renewable energy credit, it’s recorded, and no one else can buy that very same renewable energy credit. That is why you have this tracking system for buyers and vendors.” The grid manager, ERCOT, keeps track of these RECs and sends the state an annual report on the Renewable Energy Credit Trading Program, containing a list of power facilities that are authorized to sell RECs and eligible buyers. The legislature and the Public Utility Commission, whose personnel are nominated by the governor, manage ERCOT (Electric Reliability Council of Texas).