Texas Wind Generation Makes Energy Prices a Breeze…

Seldom does the mention of Texas conjure up images of windmills; rather the region more often invokes the title of ‘The Lone Star State’, the home to the oil and gas industry, or is just plainly cited as second largest state in the U.S. Nonetheless, a little known statistic is that Texas has more wind power than any other state, responsible for approximately 10 percent of the state’s generation.

mill-735943_640In fact, Texas wind farms are currently producing excess energy and utility companies are actually giving this renewable energy source to customers for free. Between the hours of 9pm to 6am, thousands of customers in Texas are paying zero dollars for their electricity requirements – saving $40 or $50 a month during the peak summer season. Approximately 50 retail electricity companies in Texas over the last three years have offered a service similar to this with the simple goal: for customers to turn down the dials when wholesale prices are highest (peak hours) and turn them back up when prices are lowest. Wind blows most strongly at night in Texas and is an economical energy source due to its abundance and the federal tax breaks that are offered to operators.

Apart from giving away free energy, Texas has created a distinctive approach to electricity. Texas runs its own electricity grid that barely connects to the rest of the country. The grid is run by Electric Reliability Council of Texas; in contrast, most states are part of larger regional bodies. However, having our own electricity grid has given Texas greater control over its electricity market. In other words, Texas won’t suffer blackouts if there are problems in Lousiana and the grid makes Texas one of the largest deregulated electricity markets in the country. This makes the energy field the ideal arena for companies wishing to innovative or provide valuable incentives to customers.

However, the Texas electricity grid means that the electricity produced here must be consumed here. As a consequence, the profusion of nightly wind power generated can only be used in Texas. Therefore, encouraging consumer to use energy during off peak hour’s results in lower wholesale prices, lowers the burdens of surplus wind energy and avoids the need to build more power plants, a costly task. Overall, the energy industry is vital to Texas, funding over $172 billion to its economy. Furthermore, Texas leads the nation in total energy production, biodiesel production capacity, and solar energy potential.

If you are directing business in this industry you should be taking advantage of the R&D tax credit, both federally and locally. Most activities performed in the energy production industry satisfy the IRS’ 4-part test and therefore qualify for the R&D tax credit. Contact a Texas Tax Credit specialist for more information.