If anyone feels the impact of the shifting energy landscape, it’s Texan Electric Cooperatives. Specifically those in the ERCOT market. 

There’s a lot of uncertainty for their distribution members. It was already important that they provide reliable and stable power while also keeping costs low, and the recent changes in the market only adds to this uncertainty.

Larger energy demand, larger energy challenges

The state where everything is bigger leads the US in both energy production and consumption.

Peak power demand climbed by more than 10,000 MW over the last decade – from 67,000 in 2012 to 77,460 MW during the July 2022 heatwaves. The pattern continued through the summer of 2023. While energy consumption is trending higher in general across the US, consumption in Texas continues to break records due to unique factors. 

Changing weather patterns in the state have made international news for the last few years. Record-breaking summer heat waves and unprecedented cold snaps would already be enough to strain the grid and challenge RECs without the added complication of bankruptcies, legal battles, and electricity market reforms. 

Meanwhile, members across the state are demanding lower costs and RECs were already concerned with trying to balance this with reliability and stability.

Unfortunately, historically many RECs haven’t often had a lot of choice when it comes to price negotiation and costs. We know that in many cases, up to 80% of their costs are related to power supply.

Texan RECs need long-term energy solutions

Most cooperatives have found short-term power supply solutions, but many of these aren’t financially suitable for the long term. In short – it’s an uncertain time. 

As these RECs look to the future, they need reliable solutions and they need them soon. 

But the question is what the right solutions are.  

It’s one thing to say something needs to be done and it’s another actually to do it. The solution for Texas is far from a one-size-fits-all approach. RECs need a custom approach and partners who understand their unique market and needs. That’s where we come in with customized distributed generation solutions

We’re proud at Perceptive Power Infrastructure that our Head of Origination, Gary Hurse, is not only a born and bred Texan, he also knows co-ops. For nearly 14 years Gary was the CEO of Lea County Electric Cooperative which serves West Texas and Southeast New Mexico. 

During his time there, he developed and managed the construction of a 46 MW natural gas plant with reciprocating engines interfaced with a 28.7 MW wind farm that was interconnected in the SPP integrated energy market. Before his time as CEO, he held other technical roles at Texas co-ops and was also employed with the Statewide as well as a G&T.

As much as Gary knows the technical side of the business, he also understands the human side. He knows that RECs have a strong community and he’s a loyal member of that community. They want to work with partners who are as trustworthy as they are knowledgeable. 

If anyone understands Texas co-ops and their needs, it’s him.

Perceptive Power Infrastructure: A homegrown team

At Perceptive Power Infrastructure, we’re a tight-knit team of energy professionals from small towns all across America who share a common belief. RECs nationwide keep the lights on for 42 million hardworking Americans and they need partners they can trust. For too long transparency has been lacking in the energy sector and we want to change that.

We understand that the rural economy is unique by its very design. RECs already bring in less revenue than their urban counterparts. According to NRECA, one mile of service line in a rural area serves eight customers on average and generates $19,000 in annual revenue. By contrast, one mile of service line in an urban area can serve 32 customers and bring in $79,000 annually. 

That’s why we meet with our clients where they are and get to know their community first. 

> What are their needs? 

> What solutions do they think will work best for those needs? 

Then, we propose our best solution based on what we’ve learned about the cooperative and their budget. We open up our books so that our partners know exactly what they’re getting for the price they pay. 

From the first meeting to the completion of the contract, we keep the lines of communication open. Our goal is to build a relationship with honesty and trust at its foundation. We call this The Perceptive Way.

Fully funded projects

As a True Green Capital Fund IV company, we don’t need to go to market and raise funds for our distributed generation projects. $660 million is already available to us

This is especially important for Texas, where long-term solutions need to be implemented relatively quickly. The time we can save by already having development funds is invaluable.

The right combination of thermal, solar, and battery storage

At Perceptive Power Infrastructure, we focus on three solutions: natural gas-powered reciprocating internal combustion engine (RICE) units, PV solar, and energy storage. 

All of these technologies have advanced significantly in recent years. Modern reciprocating engines, for example, can produce up to 19 MW. They can quickly provide increments of electricity during peak load periods and can start up even when the grid is down. Not only is this a great complement to solar, but it’s also important in the wake of an unexpected shutdown or when peak demand is anticipated. 

Depending on a REC’s power supply portfolio and current agreements with supply partners, any of the following solutions could be a logical addition: 


To determine the right resource mix, we use our
proprietary financial model

But before we run the model or propose a solution, the first thing we do is get to know our client on a human level. We don’t want to replace the supply and contracts they already have. We want to strengthen their existing power supply and help them achieve their goals. Once we know what those goals are, we collect data about their power supply portfolio and yearly costs. Using all of this information, we create a consultative, tailored solution.

The impact on 4CP

Those four 15-minute periods each summer have a lasting impact on costs for the rest of the year. Using the right combination of distributed solutions at the right time during those periods won’t just ensure adequate supply during peak demand, but it could translate to huge savings on those Transmission Cost Recovery Factors charges. 

Possibly most importantly, a diverse distributed generation portfolio is going to help balance cost and supply and boost both resilience and reliability without needing to upgrade transmission lines.

Distributed generation solutions for Texas

As RECs look to the future, they have a lot of options to consider. 

 

At Perceptive Power Infrastructure, we think that a portfolio that includes distributed generation is the logical step to balance costs and address many of the challenges facing the state today. 

 

We understand that the future is going to bring a lot of big decisions for RECs. We also understand that RECs tend to take a more conservative approach when it comes to these decisions, and rightfully so. 

 

If you’re a decision maker for a REC anywhere in the Texas market and you’re looking for long-term solutions, give us a call. We’ll be happy to listen to your challenges to see if we’re the right partner to power the future of your REC.