If the Public Utility Commission raises the cap on wholesale power prices, that could give retailers the legal right to hike fixed-rate contracts for customers.

So says TXU Energy in a filing with the commission. TXU, a unit of Energy Future Holdings, made the filing as part of a proceeding on how to ensure Texas has enough electricity this summer. Last year, supply ran tight during an extreme heat wave.

The commission is considering boosting the maximum price generators may charge to $4,500 per megawatt hour from $3,000. A higher price could incent power companies to keep older, less efficient power plants in service or to build new ones. TXU argues the higher price also constitutes a change by the grid operator that a retailer could pass along to all customers, even those with contracts for a fixed price.

Continue reading at the Dallas Morning News (subscription needed).

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