The leader of the Texas House of Representatives on Tuesday signaled he would not support requiring the state's grid operator to cut billions of dollars from electricity pricing during a cold snap that upended the state's power market.
On Monday, the state Senate approved a proposal to order the state Public Utility Commission (PUC) to reduce electricity costs on power marketers during a February deep freeze. The proposal would reduce charges by about $5.1 billion including $900 million in fee cuts already approved by the PUC. read more
Power costs soared to $47 billion, pushing three Texas electricity companies into bankruptcy and sparking a battle between lawmakers and the PUC over the handling of the crisis.
But the decision to leave wholesale power prices at about 400 times the normal rate was "a proactive decision and not an error," Speaker of the House Dade Phelan said in a tweet following a committee hearing on the power crisis.
The state's independent market adviser has called the decision to hold prices high in the final 32 hours a mistake that could be corrected, aiding city-owned and rural utility companies. About $4.2 billion in overcharges could be eliminated by cutting some rates, adviser Carrie Bivens testified.
However, Phelan said decisions to hold rates high after the emergency had passed "were made based on ensuring the reliability of the grid." High prices may even have saved lives by preventing blackouts as industrial customers resumed business operations, he said.
Lieutenant Governor Dan Patrick, who backed what he said was correcting an error by repricing power, lashed out at the statement, rebutting the speaker's tweet paragraph by paragraph in remarks delivered on the senate floor.
"The house stood for big business," he said referring to an Intercontinental Exchange Inc (ICE.N) executive's testimony opposing repricing. "The senate stood for individuals."
ICE Global Head of Clearing & Risk Chris Edmonds testified earlier in the day that ICE could not revise power contracts that had settled and if officials intervened it would make Texas appear less reliable in future transactions.
"If you alter the market structure that will result in a higher price later that all Texas will pay," he said.
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