The Electric Reliability Council of Texas, the organization that operates the state’s main power grid, is investigating. The price spike occurred in the wholesale power market, and should not impact residential consumers in a direct fashion. However, it may directly impact at least some commercial consumers and retail electric providers.
According to a report written by an ERCOT-organized working group of power companies and regulators, wholesale power prices rose unexpectedly on May 18 when Oncor reported data to ERCOT indicating a West Texas transmission line was nearing capacity. The capacity measurement was erroneous, however, because Oncor supposedly failed to account for a recent transmission line upgrade.
The full effect of the error remains unclear, although the working group estimates it resulted in $4.8 million in additional electricity costs in West Texas. Some media reports claim the total cost to the entire ERCOT system may be as much as $50 million.
The Texas Public Utility Commission is trying to ascertain Oncor’s role in the price spike, and — if necessary — what penalty to assess. One possibility would be to order Oncor to refund retailers the erroneous charges. Such an action probably would require findings of serious fault by Oncor.
You can read more about the mysterious price spike in this report by James Osborne, of the Dallas Morning News.
Is a policy analyst consultant for TCAP, a coalition of political subdivisions in Texas that purchase electricity in the deregulated market for their own governmental use. Because energy costs are typically a significant budget item to our members, TCAP is consistently looking for ways to save our members money, through cost-saving contracts, energy efficiency or demand response programs.