A split state Public Utility Commission on Thursday put a floor under wholesale electricity prices for power reserves that would be called upon in emergencies, but industry representatives said the prices are still too low.
State authorities are grappling with how to encourage private investment in new power plants to address potential electricity shortages as early as 2014 and to respond to emergencies such as last summer’s historic heat wave.
Commission Chairwoman Donna Nelson suggested $325 a megawatt-hour for so-called nonspinning reserves, but Commissioners Ken Anderson Jr. and Rolando Pablos favored a range of $120 to $180.
“We are not going to have enough generation in 2014-15 if we don’t fix these issues,” Nelson said. “I’m concerned about the message we are sending to the market.”
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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.