New plan debated by Public Utility Commission could increase your electricity bill

A proposed plan to overhaul the Texas electricity market and ensure the power grid’s reliability during peak demand was deliberated by the Public Utility Commission of Texas Thursday.

The PUC was given the task of reviewing a plan to change the state’s deregulated power market by Texas lawmakers under Senate Bill 3 following Winter Storm Uri in 2021.

After 18 months of meeting with stakeholders and reviewing designs, a plan considered by the PUC and backed by Chairman Peter Lake and Commissioner Kathleen Jackson is called Performance Credit Mechanism.

Under the plan, energy generators would earn performance credits if they produce certain amounts of electricity when the power grid’s reserve supply is lowest. They could then sell the credits to retail electricity providers, municipal utilities and other power companies. The cost the retailers incur is passed on to customer electricity bills, according to a report by the Houston Chronicle.

One concern commissioners voiced during Thursday’s meeting was the guarantee of energy during peak demand, especially in the summer.

Texas saw record breaking temperatures last summer, with June and July being some of the hottest months on record in North Texas.

Nine Texas Senators signed a letter to the utility commission in December instructing the group to hold off voting for a market plan until the legislature weighs in.

Senator Charles Schwertner said in a social media post that the PCM proposal falls short of securing energy resources when the grid is stressed in extreme weather and higher energy use.

“Implementing an administratively complex and novel concept could in fact deter new investments in the ERCOT market until it is fully in place,” Texas senators wrote in the letter. “The Commission should carefully consider the unintended consequences of any type of proposal that creates more uncertainty for market participants.”

Pablo Vegas, president and CEO of the Electric Reliability Council of Texas, said Thursday that it would take an estimated two to three and a half years to develop and establish a PCM market system. Vegas said ERCOT supports the PCM’s performance credit plan, seeing it as incentives for generators to be available.

If PCM is put in place, Vegas said there would be bridge solutions during the market transition period such as a reliability must-run plan, however Commissioner Lori Cobos voiced concern of whether the bridge solutions would be sufficient.

Gov. Greg Abbott issued a statement Tuesday in support of the PCM plan and recommended the PUC give the plan strong consideration.

“As the Legislature has noted, a reliability standard must be the foundation of any reliability design,” Abbott said in a statment. “The PCM best meets this call because it is based on a reliability standard, incentivizes new dispatchable generation, and maintains Texas’ energy-only market.”

In his statement, Abbott encouraged the use of bridge solutions that utilize existing ERCOT products and services to prevent a delay in deploying the new market plan.

The next PUC meeting is at 9:30 a.m. Thursday.