During February's Winter Storm Uri, millions of Texans who were left without power suffered tremendous physical, emotional, and financial damage. For weeks, our focus has been: What happened?
Fingers were pointed. Leaders have resigned. It was immediately evident that the Electric Reliability Council of Texas (ERCOT) and the Public Utility Commission of Texas (PUCT) failed Texans.
But, for many, the worst is yet to come.
During that devastating week in February, demand on the State's energy infrastructure increased as multiple generation units tripped offline. Former ERCOT CEO Bill Magness testified that the only way ERCOT could ensure that the generators would stay online was to set the price at the highest possible price permitted. ERCOT called a meeting with the PUCT, who passed a rule allowing this course of action in less than 10 minutes.
What happened in that short time will impact Texas residents and businesses for decades.
Potomac Economics — an independent market monitor that oversees ERCOT activities on behalf of the PUCT— found that the PUCT erroneously instructed the power grid operator to fix prices at $9,000 per megawatt per hour.
The PUCT and ERCOT claim this negligent decision was necessary to save lives. However, no new generation came online, lives were lost, and substantial costs will be passed onto rate payers and taxpayers.
Small retail electric providers, which make up about 20 percent of the retail market, operate with small margins to ensure customers receive the most competitive rates. The billions of dollars in overpricing ERCOT invoiced during the Winter Storm Uri means that many of these companies can't afford to pay for generators’ or natural gas’ charges, which increased more than 1,100 percent during the winter storm. These inflated costs will ultimately be borne by consumers in the form of higher rates, surcharges or taxes, or retailers may face bankruptcy.
The current bill of about $50 billion in artificially increased costs breaks down to potentially thousands of dollars per Texas household on the ERCOT grid for that one week alone, a price tag that the majority of Texans cannot afford, and they shouldn't have to pay for it. After the pandemic and unprecedented, devastating weather, Texans have been hurt enough.
During the last year, the Texas Workforce Commission estimates 7.4 million Texans have filed unemployment claims, and before the blackout, over 600,000 Texans enrolled in the PUCT's COVID Electricity Relief program because they could not afford to pay their electricity bill. Raising the price of electricity for thousands of Texans will result in more Texans enrolling in state assistance programs - passing the cost on to the State - or worse, having their electricity shut off - creating widespread health and education concerns at the worst time in State history.
The Legislature created the PUCT to safeguard Texans, and the PUCT failed us.
As laid out in Texas Attorney General's opinion on Mar. 17, 2021, the Texas Legislature, which has oversight over the PUCT, can instruct the Commission to reprice the market. Still, the Texas Legislature declined to take action during the thirty-day repricing window.
We must urge the Texas Legislature to utilize its powers vested in the Texas Utility Code to protect consumers by returning the billions paid in overpriced energy during the 2021 Winter Storm. The Texas Attorney General already wiped out $29.1 million in debt held by Houston-based electric company Griddy Energy. Hopefully, leadership will take similar actions to protect all Texans from rising costs.
Moreover, we must call on state officials to investigate any unlawful overpricing during Winter Storm Uri to hold those involved accountable and seek justice for impacted Texans.
It's time for Texans to regain our power by taking this issue directly to the State Legislature. Let's hold our leaders – the people we elected to office – accountable and demand that consumer protection take precedence over unjust profiteering.
Texas consumers should not foot the bill for a state’s error.
Brandon Young is with Texans for Fair Energy Billing.