Texas ERCOT Power Grid Changes Will Increase Electricity Bills

Texas regulators have approved a proposed overhaul of the state’s power grid, which will likely increase consumers’ electricity bills when the changes begin.

The Texas Public Utilities Commission said in January that the new plan is to help make the grid more reliable by producing enough power when there is a shortage of available electricity due to equipment failure, severe weather, etc.

Using a tactic called a “performance credit mechanism,” power companies like NRG would be ready to generate more power during a power shortage. The power companies would then sell power credits to retail power companies that sell power to homes and businesses, such as TXU, Cirro and Reliant, to avoid volatile price spikes when demand is high. The retail companies that buy the credits would eventually pass the cost on to the consumer.

The plan would take about three years to implement and cost about $460 million annually, according to commission documents. That’s about $2 a month on a $100 electric bill.

“What we have in front of us is a market-based solution that, based on extensive analysis, would offer a 10x improvement in reliability for less money than our customers would pay in the absence of action,” said the president of the company. PUC, Peter Lake, to the Texas Senate Business Office. and Trade Committee in November.

Many of the state’s power companies support the plan, saying the loans will help them build new power generation facilities to meet demand in a growing state. Governor Greg Abbott also endorsed this plan.

But critics doubt the plan can work, saying it is too risky and does not have the one-sided support of energy experts, advocates and industry leaders.

“Just to be clear, [we] did not direct the PUC to replace the state’s all-power market with an unnecessarily complex capacity-style design that puts the competitive market at risk without ensuring the delivery of new dispatchable generation,” said state Sen. Charles Schwertner, who helped write Senate Bill 3 directs the PUC to devise a plan to overhaul the network after the deadly winter storm of 2021. “My colleagues and I intend to hold hearings and consider new legislation to meet our obligation to protect the people of Texas.”

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