During the surprise winter storm last month, the Public Utility Commission of Texas allegedly decided that the market was not acting as it believed it should and hiked prices to the maximum of $9,000 per megawatt-hour.
Critics are now challenging the PUC’s power to issue the order.
Attorney Tony McDonald, for example, questions the PUC’s purported authority to set rates.
Newly appointed Texas Public Utility Commission Chairman Arthur D’Andrea
| puc.texas.gov/
“I believe the PUC is taking an extreme position on its authority, arguing that it can do 'anything' implied by the Utilities Code that is 'necessary and convenient' to the exercise of that implied power,” McDonald told the Lone Star Standard.
Four days at $9,000 per megawatt-hour, an exponential increase over the average $22 a megawatt-hour, financially bamboozled market participants, according to media reports.
“I think it’s something Texans should be paying attention to and concerned about,” McDonald said in an interview.
Texas electricity companies were overcharged some $16 billion by the agency, according to Potomac Economics.
“PUC argues that, because they have authority over ERCOT, and because ERCOT can set electricity rates, then the PUC can unilaterally override ERCOT on those subjects without following the usual steps for rate-setting,” McDonald said.
The independent market monitor for the PUC and the state’s electricity market, also known as ERCOT, recommended the PUC correct real-time prices from 0:00 Feb. 18, 2021, to 09:00 Feb. 19, 2021, in order to remove the inappropriate pricing intervention that occurred during that time period.
"We recognize that revising the prices retroactively is not ideal,” wrote Potomac Economics' Carrie Bivins in a March 4 letter to PUC Chairman Arthur C. D'Andrea and Commissioner Shelly Botkin. “In this case, however, given that the prices are inconsistent with ERCOT's protocols and the Commission Order and that allowing them to remain will result in substantial and unjustified economic harm, we respectfully recommend that the Commission take the action described above to correct ERCOT's real-time prices."
But even though 28 of 32 state senators called on the PUC to correct the pricing, D’Andrea allegedly refused, according to Reuters.
“You don't know who you're hurting,” ABC News reported that D’Andrea said at a public meeting. “You think you're protecting the consumer and turns out you're bankrupting a co-op or a city. And so it's dangerous, after something is run, to go around and redo it.”
