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Texas Electricity Users May Pay for Utilities’ Bypassing Stimulus Funds

Texas flagPurchasers of renewable energy in Texas may pay a higher rate after the companies building a $5 billion renewable energy transmission network in the state decided to bypass federal stimulus funding for the project.

Utilities and companies building the network say that the stimulus funds came with strings attached that might slow down the project or add more costs on the back end, reports the Dallas Morning News.

The decision to forego the stimulus funding was reached jointly between members of the Public Utility Commission of Texas and companies involved in building the network.

One commissioner said, “The juice may not be worth the squeeze,” the article reports. Applying for federal funds would have involved developing an environmental impact statement, for instance.

Also, utility companies told the commission that any potential savings from the stimulus funds would be outweighed by higher costs from “Buy American” rules attached to the funding that would prevent the use of cheaper, foreign-made iron, steel and other goods.

Using the stimulus loan guarantees could have cut $50 million to $75 million a year from the tab, however, say consumer advocates. Instead of quietly agreeing to forego public funds, the utility commission should have conducted a study to show the cost-benefit analysis, consumer advocates say.

The article also notes that decreasing the cost of a utility project also typically means lower profits for the utilities.

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