The Texas Senate’s bill to retroactively lower energy rates during last month’s winter storm was killed just one day after the Senate passed it.
Lt. Governor Dan Patrick on Monday celebrated the Senate bill directing ERCOT to retroactively lower the peak energy prices for 32 hours on February 18th and 19th.
“This is a mistake and it must be corrected,” said Patrick during a press conference after the passage of the bill. “I believe the Governor wants to do it and all of these issues are going to end up in court at some level anyway, but if we can at least correct this, it’s a good start to do the right thing.”
Patrick has argued that by setting the peak rate the Electric Reliability Council of Texas (ERCOT) and the Public Utility Commission (PUC) failed to allow “the market to be the market”, but instead pushed the price. Patrick also contends that re-pricing would save taxpayers and ratepayers billions of dollars.
On Tuesday State House Speaker Dade Phelan officially killed the legislation.
The issue comes down to the words “error” and “mistake”. The Senate overwhelmingly passed their bill under the agreement that a pricing error or mistake was made by ERCOT and the PUC when they maintained the peak $9000/megawatt hour rate over 32 hours spanning from Thursday and Friday of the week of the storm.
In a statement Phelan took issue with the premise that the two agencies made mistakes in pricing. “The decisions made on pricing were made based on ensuring the reliability of the grid,” wrote Phelan. “I believe that these decisions may have saved lives.” According to testimony from the now resigned ERCOT CEO Bill Magness, the peak rate was used to incentivize energy companies to bring more power back on line.
Phelan went on to challenge the Senate bill saying, “Repricing based on disagreement with PUC and ERCOT’s management decisions is an extraordinary government intervention into the free market, which may have major consequences for both residential and commercial consumers going forward.”
Phelan added that the House has developed a series of reforms that are set to protect consumers, restructure ERCOT, create securitization for distressed utilities, build infrastructure, and improve resiliency in the energy market.