Texas regulators will not correct $16 billion in electricity ‘overcharges.’ Why?

At its meeting on Friday, the Texas Utilities Commission declined to adjust prices, causing a $ 16 billion electricity market congestion during February's winter storm. These allegations were documented in a letter Thursday from the Commission's independent market monitor, Potomac Economics.
The governor-appointed regulatory commission overseeing the Texas Electric Reliability Council met with only two members after Chairman DeAnn Walker resigned. Commissioners Arthur D’Andrea and Shelly Botkin brought up the Potomac report which found that ERCOT kept electricity prices too high for at least 33 hours for at least 33 hours after the end of most outages on late February 17.
D’Andrea, who now serves as chairman, said the reassessment was "dangerous" as it could potentially create new problems for customers and utilities who have made a number of complex private transactions outside of the official electricity market.
"It is almost impossible to decipher this type of egg and the results of this route are not known," said D'Andrea. “We've already come down a path, we know who gets hurt by it, and we can focus on helping the injured instead of throwing it all back in the air, making another big mess, and then in a month. I will have another group of people who are hurt and we need to focus on helping them. "
At the direction of the Commission, ERCOT increased real-time prices on February 15 to a maximum of USD 9,000 per megawatt hour, an increase of more than 10,000% compared to the previous week. The decision reflected the electricity shortage in the face of unprecedented nationwide heating needs and aimed to incentivize electricity generation at a time of desperate needs.
In her letter to the commission, Carrie Bivens, vice president of Potomac Economics, wrote that if not corrected, these price interventions will result in higher outages for utility companies. While the company agreed to the Commission's original decision to increase prices, the increase lasted too long and could cause "significant and unjustified economic damage," she wrote.
Accepting Potomac's recommendation would not result in lost sales for ERCOT as the revised prices would continue to cover generation costs and reflect supply and demand during the winter storm, Bivens wrote.
"We recognize that changing prices retrospectively is not ideal," she wrote.
According to the Texas Tribune, retail utility companies and their customers could get at least $ 1.5 billion off the bill, and many electricity companies and cooperatives are on the verge of collapse or bankruptcy. Waco-based Brazos Electric Power Cooperative with 1.5 million customers filed for bankruptcy on February 26th to protect customers from huge bills.
D’Andrea and Botkin said there is still a possibility for the Commission to adjust prices for ancillary services, a collective term for the functions of the electricity grid that support the continuous flow of electricity.
For some utility companies, utility bills rose to more than $ 20,000 per megawatt hour on February 15. In Georgetown, the municipal utility was billed $ 17.8 million for one week of fringe benefits, compared to $ 710,000 for all of 2020. The cost alone was 25 years, according to a city council presentation.
"The thing with the ancillary service is different, there is no deadline for it," said D'Andrea. "We can put this on hold, but the energy market has a deadline today and I say we don't act."
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