Lately, a day doesn’t pass without some stunning news in the electric industry in Texas. Here are the latest developments from the fall-out of the Texas Winter Storm.
2nd PUC Commissioner Resigns
Shelly Botkin resigned Monday of this week, leaving Arthur D’Andrea as the last remaining board member. The open meeting on March 11th will be interesting as it will essentially be Mr. D’Andrea meeting with himself.
Lt. Gov. Dan Patrick Asks PUC to Fix the $16 Billion ERCOT Overcharge
Good ol’ Lt. Gov. Dan Patrick has done something worth while and asked the PUC to force ERCOT to correct the $16 Billion overcharge that occurred during the storm. Basically, ERCOT extended the emergency $9,000 per MW pricing longer than they should have. They should have stopped the $9,000 per MW price after the load shed had ceased. However, it continued on for about 32 hours longer than it should have. This resulted in REPs paying $16 billion more for wholesale electricity those days than they should have. Several REPs are begging the PUC to reverse the error while some generators and a few other entities are asking for the prices to stay put. See my article about the ERCOT pricing error for more details. The REPs (Retail Electric Providers) seem most hurt by the error, as some have filed for bankruptcy and others are on the verge of it.
Good Job Lt. Dan
The PUC stated on Friday that they would not change the error, but gave little explanation and assumed that the public just wouldn’t understand the reasoning…so they gave no reasoning. According to Mr. D’Andrea, fixing a $16 BILLION error could bankrupt cities and co-ops. This makes no sense to me as generators are the ones who benefited from the price increase. I guess its possible that some cities and co-ops are generators, but even if the prices were changed back to a reasonable amount, they should cover the cost of electricity sold. It’s not like they would be losing money. They would just not be getting the windfall they thought they were going to get. And the REPs would be saved from bankruptcy. And consumers wouldn’t have to bail anyone out with the “rate increases” that we will see from all of this mess.
So I applaud Lt. Gov. Dan Patrick for calling on the PUC to fix the error. I do not like him or Greg Abbot for their crappy leadership, weak PUC appointees and the fact that they get money from the gas and oil industries. However, this seems to be a good call, because $16 billion of wealth just got transferred to the energy production industry on a fluke…and that’s just not right.