Texas House leader signals opposition to retroactive power price cuts
(Reuters) – The leader of the Texas House of Representatives on Tuesday signaled he would not support requiring the state’s grid operator to cut billions of dollars from electricity pricing during a cold snap that upended the state’s power market.
On Monday, the state Senate approved a proposal to order the state Public Utility Commission (PUC) to reduce electricity costs on power marketers during a February deep freeze. The proposal would reduce charges by about $5.1 billion including $900 million in fee cuts already approved by the PUC.
Power costs soared to $47 billion, pushing three Texas electricity companies into bankruptcy and sparking a battle between lawmakers and the PUC over the handling of the crisis.
But the decision to leave wholesale power prices at about 400 times the normal rate was “a proactive decision and not an error,” Speaker of the House Dade Phelan said in a tweet.
The state’s independent market adviser has called the decision to hold prices high in the final 32 hours a mistake that could be corrected, aiding city-owned and rural utility companies. About $4.2 billion in overcharges could be eliminated by cutting some rates, adviser Carrie Bivens testified.
However, Phelan said the decisions to hold rates high in the hours after the emergency had passed “were made based on ensuring the reliability of the grid.” High prices may even have saved lives by preventing blackouts as industrial customers resumed business operations, he said.
Revising those 32 hours of a five day event would be “an extraordinary intervention into the free market, which may have major consequences” for consumers, he said.
Spokespeople for Lieutenant Governor Dan Patrick, who backed the repricing bill, and Senator Bryan Hughes, who authored the senate bill, did not immediately reply to requests for comment.
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