Texas Scorecard by Jeramy Kitchen March 10, 2021
81 days left in the 87th Session of the Legislature
Unreliable energy producers could stand to benefit at the cost of others.On Tuesday evening, Gov. Greg Abbott added yet another “emergency item“ to his growing list of priorities for the 87th Legislature to consider. Similar to two other emergency items that were added in the wake of the recent severe winter weather, this one specifically addresses the perceived billing errors, excessive charges, and any issues regarding ancillary service prices.
On the surface, this issue has been promoted as a consumer protection priority, but it might not be that straightforward when talking about something as complicated as the Electric Reliability Council of Texas (ERCOT) and how regulation potentially impacts the few market mechanisms that exist within that framework.
Brief History and Timeline
• February 14: ERCOT reminds generators that there is no cap on ancillary services and to prepare as needed, as prices are likely to head towards $9,000/MWh.
• February 15: ERCOT system-wide outages occur, but wholesale prices are lower than $9,000/MWh because of a computer glitch on the software being used rather than reflecting real market conditions.
• February 15: The Public Utilities Commission (PUC) unanimously agrees to raise all wholesale market caps to $9,000/MWh and the System-Wide Offer Cap (SWOC) to its maximum, to encourage power generation.
• February 16: PUC camps the SWOC and wholesale market at $9,000/MWh, even though the PUC confirmed it was not needed.
• February 18: “Rolling blackouts†end, but PUC leaves wholesale pricing at $9,000/MWh because there are still many customers without power.
• March 3: PUC meets again to preview prior decisions on market pricing and determines that they were correct in their decision to keep wholesale prices from running up higher than $9,000/MWh.
• March 5: PUC rejects the Independent Market Monitor’s (IMM) recommendation to reprice the market for February 16-19. IMM argued that the raised cap prices did not work, so the wholesale price cap should have been lowered. The PUC indicated that the wholesale market prices did work and the market would or could have been much worse if they did not keep them raised.
More:
https://texasscorecard.com/state/who-stands-to-gain-from-abbotts-ercot-pricing-priority/
