HOUSTON – The Texas state power regulator unanimously vetoed a request on Friday to cut about $ 16 billion in state power costs during the last day of the state’s cold moment in February, saying even a partial reassessment could have unintended consequences .
The Public Utility Commission is postponing the vote on a separate proposal to cut service fees, which would save $ 1.5 billion in electricity suppliers for power that was never provided. Both proposals were recommended by the state’s independent adviser on the power market.
Total electricity costs rose by about $ 47 billion during a winter storm that knocked out nearly half of the Texas power plants, causing the price of gas and power that caused the state’s energy sector to rise. Storm-related costs have led to one company going bankrupt and a dozen more faces being deducted from the state’s network for default.
“The PUC chooses to ignore the recommendation of the state-appointed economists to advise regulators,” Brandon Young, chief executive of Payless Power, a marketer for electricity, said in an interview. “As a result, $ 16 billion in costs are passed on to all electricity suppliers – retail electricity, municipal suppliers and cooperatives.”
The state network operator raised power prices to $ 9,000 per megawatt-hour to encourage the power station operator to increase power or stay afloat for five days. However, that price of 450 times the usual remained in place after the emergency, which added about $ 16 billion to the total.
State market adviser Carrie Bivens described the final-day price as a mistake by the Texas Electric Reliability Council, and recommended the PUC “correct the ERCOT rates.”
Reviewing prices could hurt businesses that have hedged their power costs and result in greater uncertainty, commissioners say.
“Decisions were made in real time about these prices based on information available to everyone,” said Arthur D’Andrea, chairman of the PUC. “It’s impossible to untangle.”
The error and fees charged for auxiliary power services rendered caused a firestorm of protests by the dozens of companies marketing electricity in Texas. Commissioners on Friday postponed a vote on Bivens’ call to reduce the additional service fees, saying there was no reason to rush.
Vistra Corp., a power station that receives some of the fees, argued that it was unfair for regulators to choose ‘certain prices’ for a refund. The commissioners for ancillary services are considering cutting will not reduce the residential bill.
“It would be inappropriate for the Commission to only revalue ancillary services without addressing the other price issues and challenges,” Amanda J. Frazier, a senior vice president at Vistra, wrote in a letter to the commission.
Federal and state investigators are investigating why the state and utilities were unprepared for a deep freezing point that left up to 4.3 million Texans without power, heat and water. Consumers will see higher prices as storm costs are reduced by rate hikes or fewer choices in suppliers, officials said.