Legislators, monitor urge ERCOT to amend storm-related prices

AUSTIN, Texas – State Senators are asking the Electric Reliability Council of Texas to take a hard look at amending the sky high energy prices charged during the winter storm. That request came as an independent monitor stated it believes ERCOT overcharged the Texas market by billions of dollars.

“What we do here impacts every business, every home that operates in the state of Texas,” said State Sen. Kelly Hancock (R-District 9), chair of the Senate’s Business and Commerce Committee.

Hancock’s words opened a hearing meant to probe the financial impact of last month’s storm. At issue is the billions of dollars ERCOT charged energy providers during the crisis. At ERCOT’s behest, the Public Utility Commission of Texas allowed energy prices to hit the cap of $9,000 per megawatt-hour during the storm.

ERCOT vice president of commercial operations explained to the committee the price hike was needed during the storm to ensure every available power generator was pumping energy into the grid. Ogelman testified that during the storm, energy prices were fluctuating based on supply scarcity. He said as more power units went down and demand grew, prices went up. As ERCOT called for millions of people to lose power, prices dropped since it appeared demand and supply were evening out.

Ogelman then explained that was causing a problem with the system potentially viewing a power generator as a reserve unit.

“(That) put risk on additional resources potentially tripping offline and making the problem worse,” said Ogelman.

Ogelman said removing any price roadblock ensured the grid was getting all the power it could at the time.

“You start seeing a move from tens of millions of dollars to us starting to invoice billions of dollars,” said Ogelman.