In the aftermath of last month’s winter storm, Lt. Gov. Dan Patrick called on both the Texas Public Utilities Commission and the Electric Reliability Council of Texas to amend the pricing that came with the power outages from the storm.
His office issued a statementon Monday saying the PUC ordered ERCOT to institute a $9,000 per megawatt hour cost cap — about 75 times higher than the state’s average electricity cost. The cap was initially designed to increase power generation when there is an extreme shortage.
“According to the Independent Market Monitor (IMM), ERCOT incorrectly extended that pricing intervention after the power shortage had ended,” Patrick said in his statement.
The cap resulted in an additional $16 billion in charges from the storm.
“The $9,000 price should have ended at 11:55 p.m. on Feb. 17. Instead, it continued throughout the entire day of Feb. 18 into Feb. 19 — 32 hours total,” Patrick added.
Patrick said the Independent Market Monitor, ERCOT’s independent market monitor, notified ERCOT of the incorrect pricing on Feb. 18, however, ERCOT ignored those warnings.
The lieutenant governor also said that ERCOT failed to cap ancillary services, which resulted in prices as high as $24,000 per megawatt. Ancillary services help support the main grid to continuously provide energy, especially during a shortage emergency.
High ancillary charges and an increased cost cap caused some electric companiesto issue electricity bills as high as $10,000 last month. The PUC decided not to retroactively decrease the prices that caused Texans to receive astronomical bills.
The IMM recommended ERCOT to correct these charges, but the grid company has declined to do so thus far. The ERCOT Nodal Protocol gives the company 300 days to correct errors in pricing.
“Correcting this $16 billion error will require an adjustment, but it is the right thing to do,” Patrick saidin his statement. “It will ultimately benefit consumers and is one important step we can take now to begin to fix what went wrong in the storm.”
