Texas grid manager responsible for $16B in overcharges, says watchdog
The grid manager for Texan energy markets overcharged some $16 billion for electricity during the winter storm that hammered the state’s independent power grid, according to a third-party monitor.
The Electric Reliability Council of Texas (ERCOT) set prices at a ceiling of $9,000 per megawatt hour during the emergency, but left the rate in place for two days longer than necessary, independent market monitor Potomac Economics concluded.
The monitor, which the state hired, recommended the charges be reversed, according to Bloomberg.
Prices came close to the $9,000 maximum on Day One of the blackouts but plunged to $1,200 soon after, which the state utility commission has said was caused by a technical glitch.
ERCOT should have reset prices to the normal level as soon as the rolling blackouts concluded, Potomac said. The time frame for the correction request is midnight on Feb. 18 to 9 a.m. on Feb. 19.
“The signal that we want to send is not that we changed the rules after the game’s been played,” Michele Richmond, executive director of trade group the Texas Competitive Power Advocates, told Bloomberg. “That doesn’t instill confidence in the markets.”
The trade group represents power companies owning a total of 70 percent of ERCOT’s generating capacity.
Resetting the rate retroactively would reduce some pressure on power companies in the state, which include Just Energy and EDF Renewable Energy. Both companies have previously asked the state’s Public Utility Commission to roll back the pricing for the days following the emergency.
“If we don’t act to stabilize things, a worst-case scenario is that people will go under,” said Carrie Bivens, who serves as Potomac’s ERCOT independent market monitor director. “It creates a cascading effect.”
Bivens, who worked at ERCOT for 14 years, said the “mind-blowing amount of money” ERCOT overcharged was greater than the entirety of the cost of energy traded in real-time for all of last year, according to Bloomberg.