The Texas utility regulator had the opportunity Friday to wipe out some of the $ 16 billion that the state’s grid operator wrongly charged power companies during last month’s deadly winter storm, but the Commission board Public Services decided not to.
Some Texas electricity customers may have benefited from the decision to readjust electricity market prices for the week of the storm, according to PUC President Arthur D’Andrea and some independent analysts. But other customers could have been hurt by such a move, D’Andrea said.
“I fully understand how you seem to be protecting consumers [by readjusting electric prices]”D’Andrea said Friday during a PUC meeting. “But I promise you are not.”
D’Andrea added that a retroactive decision would have winners and losers: “You don’t know who you are hurting. And you think you are protecting the consumer and it turns out that you are bankrupt [someone else]. “
Potomac Economics, the PUC’s independent market monitor, which oversees the grid operator, the Texas Electric Reliability Council, recommended that the PUC retroactively reduce the market price of energy for at least part of the week of the year. freezing.
In Texas, wholesale energy prices are determined by supply and demand – when demand is high, ERCOT allows prices to rise. During the storm, the PUC ordered the grid operator to set wholesale energy prices at $ 9,000 per megawatt hour, the maximum price. The price increase is intended to incentivize power generators in the state to add more energy to the grid. The companies then buy energy on the wholesale market to deliver it to consumers, which they are contractually obligated to do.
But the prolonged freezing weather made it impossible because it took a large part of the state’s electricity generation offline.
ERCOT maintained its highest level of emergency alert until the morning of February 19, five days after the storm initially hit the state, a signal to the market that the power grid was still unstable, keeping prices high. .
Potomac Economics wrote in a letter this week to the PUC that ERCOT kept market energy prices too high for nearly two days after the widespread outages ended the night of February 17. ERCOT should have restored prices the next day, the letter said.
D’Andrea, who was elevated to the presidency this week by Gov. Greg Abbott, and PUC Commissioner Shelly Botkin could have decided Friday to order ERCOT to follow the recommendation of Potomac Economics, a move that could have potentially reduced thousands of millions of dollars of what Grid Operator overloaded to the energy companies.
State Senator Drew Springer, R-Muenster, expected a different decision from the PUC on Friday.
“Keeping the market at artificial $ 9,000 for 32 hours costs $ 16 billion,” Springer tweeted, adding that the Potomac Economics report “says those hours should change the price, I agree.”