June 14 (Reuters) – A proposal to spend $8 billion on new power plants in Texas has stalled, Starwood Energy Group’s chief executive said on Monday, as the state’s grid operator called for conservation amid record demand.
In April, the Connecticut investment firm proposed the construction of 11 natural-gas fired power plants, aiming to improve grid reliability during times of extreme demand.
State grid operator, the Electric Reliability Council of Texas (ERCOT), on Monday asked residents to reduce electricity use “as much as possible” through Friday, citing plants supplying 11,000 megawatts that were offline as temperatures hit 98 degrees Fahrenheit (37 Celsius). read more
Starwood’s proposal to build “peaker plants” for such outages was the second presented to Texas this year. A similar plan for 10 plants was submitted in March by Berkshire Hathaway Inc (BRKa.N).
“We would like to see significant steps in countering, negotiating and material tangible actions on our proposal,” said Himanshu Saxena, chief executive of Starwood Energy, in an interview on Monday.
The company has held early conversations with stakeholders, Saxena said, and lawmakers have looked at proposals submitted to ERCOT and state regulator the Public Utility Commission of Texas (PUCT), according to a spokesperson for the PUCT.
“We would love to see more urgency from the system,” Saxena said. “I think there is interest, in the sense that folks are curious about what we’re offering to do.”
A February winter storm that caught generators off guard knocked out power for millions across Texas, leaving more than 150 people dead and driving up electricity prices to levels that put several suppliers in bankruptcy court. Then, as now, there were a number of plants offline for repairs.
Starwood’s proposal requires legislative action, Saxena said, noting the long lead times for large-scale projects. Both proposals were presented to the Texas legislature during a session that ended on May 31, according to the PUCT spokesperson.
Texas lawmakers in May approved bills to overhaul the power grid, including requiring some plants to weatherize systems.