During the worst of the Texas freeze, the Public Utility Commission overrode the computer that priced electricity and pushed the price from $1,200/kwh to the maximum allowed, $9,000/kwh. The normal rate is around $22/kwh. The price remained there 33 hours longer than it should have, costing power generators that were forced to buy from other sources around $16 billion.
The Public Utility Commission deferred voting on a separate proposal to slice service fees that would have saved retail electric providers about $1.5 billion for power never provided. Both proposals were recommended by the state’s independent power market adviser.
Total electricity charges jumped by about $47 billion during a winter storm that knocked out nearly half of Texas power plants, hiking prices for gas and power that have roiled the state’s energy sector. Storm-related costs sent one company into bankruptcy and a dozen more face being unplugged from the state’s grid for non-payment.
Brandon Young, chief executive of Payless Power, an electricity marketer, said:
“The PUC choose to ignore the recommendation of the economists hired by the state to advise regulators. As a result, $16 billion in costs are being passed to all electric providers -retail electric, municipal providers and cooperatives.”
Revising prices could hurt the companies that had hedged their power costs and result in greater uncertainty, said commissioners.
PUC Chairman Arthur D’Andrea said:
“Decisions were made about these prices in real time based on information available to everybody. It is impossible to unscramble.”
That’s cold comfort to those who will be forced to pay exorbitant fees.