The Public Utilities Commission (PUC) of Texas on March 5 vetoed a request for a $ 16 billion reduction in electricity bills incurred by the decision to raise electricity prices in the state during a snowstorm in February.
|Texas struggled to find a way to pay an electric bill.|
When Texas fell into a record freezing cold, the state grid operator raised the price of electricity to $ 9,000 per megawatt hour to encourage power plants to increase production or maintain operations for the time of the announcement. The state of emergency lasted 5 days, ending on February 17.
However, the price above, 450 times higher than normal, was maintained for 32 more hours until the morning of February 19, causing the total electricity bill to increase to 16 billion USD.
The Texas state government judged the electricity regulator’s actions wrong and recommended a reduction of this $ 16 billion, now included in consumer bills.
Texas market advisor Carrie Bivens described the pricing as a “mistake” by the Texas Electricity Stability Board (ERCOT) and recommended that the PUC restore the price to the specified time.
But according to the PUC’s argument, the re-pricing of electricity bills can also have undesirable effects. The agency warns that the electricity price amendment could cause great harm to companies that have self-insured their electricity costs and lead to greater volatility.
“Decisions on these prices have been made in real time based on information available to everyone. It cannot be disturbed,” said PUC President Arthur D’Andrea.
It is true that the decision to reduce the $ 16 billion bill, he said, was best for consumers but, that reflects a “simple” view of how the Texas electricity market works.
“We only see the tip of the iceberg. You don’t know who you’re hurting. You think you’re protecting consumers and it turns out you’re bankrupting a cooperative or a city. dangerous “- said Mr. D’Andrea.
But CNBC citing research by independent market watchdogs of the state shows that the record price of electricity, 75 times higher than normal, has been kept at a high level for longer than necessary.
“The PUC chose to ignore the recommendation of economists hired by the state to advise regulators,” said Brandon Young, CEO of Payless Power, an electricity marketer. As a result, $ 16 billion in costs are being passed on to all power providers – the retail, municipal and cooperative electricity suppliers. ”
The record increase in electricity prices in the cold weather made Texans overreacted. A woman facing an electricity bill of up to $ 9,340 filed a class action lawsuit claiming $ 1 billion in relief money from Griddy, an electricity company in the state. And Texas Attorney General Ken Paxton is also suing the company for fraud – specifically promising Texans low “wholesale” prices knowing that energy costs could rise during times of demand. high.
On its website, the Griddy company says it has not given an option to raise prices. The Texas PUC had “mandated maximum rates for several days – a decision they made to get prices out of the reach of the market” – a statement from Griddy wrote.
The Texas government continues to conduct investigations with power companies and the reasons for widespread power outages amid unusually cold weather to ensure the state does not face similar power shortages in the future. hybrid.
It was previously suggested that an increased amount of electricity should be paid by the federal government, run by Joe Biden. However, this idea has not been processed.
Wall Street Journal’s analysis published on Feb. 24 shows that consumers of electricity from the “floating” market of Texas pay $ 28 billion more than residents in states that use electricity. system, in which the power sector is still regulated by the government.