News: Texas regulator warns lawmakers against rollback in storm power prices.
(Reuters) – The chief of Texas’s electricity regulator told lawmakers Thursday that any attempt to retrospectively lower electricity prices collected during a recent storm would lead to litigation the state could lose.
The state’s electricity grid operator hiked electricity prices sharply during a February freeze that bankrupted two energy companies, and others have warned of potential bankruptcies. Senior officials this week called on the Texas Public Utility Commission (PUC) to immediately cut electricity prices by about $ 16 billion.
Any reassessment would spark lawsuits the commission would lose, PUC chairman Arthur D’Andrea bluntly told lawmakers at a hearing in Austin. Commodity contracts to safeguard power have been signed, and any revaluation “will have ramifications” for the state’s power, agriculture and other markets, he said.
“If I do, I’ll be sued and lose immediately,” he told a state committee. Legislators could try to change pricing by passing a bill, but it would also stand on trial and lose, he added.
The state-independent market advisor has recommended pricing for the last 32 hours of the five-day emergency and, citing the network rules, called for a reduction in some service fees. Emergency charges were $ 16 billion for electricity and approximately $ 1.5 billion for service charges that were tied to the electricity price.
The state governor, lieutenant governor, and 28 of 32 state senators this week called on the PUC and grid operator to “correct” the last 32 hours of electricity prices, taking into account the recommendation and the impact on utility companies.
“These corrections are your direct responsibility, be it through your own action or through an order to ERCOT,” said the senators in a letter to D’Andrea on Tuesday, referring to the state network operator by its acronym.
“I disagree” with the senators’ appeal, said D’Andrea. He has repeatedly ruled out an electricity price rollback and has argued that the decision to increase prices during the cold snap is known to all grid users.
Intercontinental Exchange Inc. (ICE), which conducts power deals in Texas, last week signed contracts that covered billions of dollars in state power deals and has no authority to reopen closed contracts. ICE has postponed the execution of four contracts tied to the much lower service fees, people familiar with the matter told Reuters.
Reporting by Gary McWilliams; Arrangement by Marguerita Choy
Original Source © Reuters