Staggering. That’s how big businesses have described the potential fallout from a regulatory proposal to increase wholesale energy prices. The Public Utility Commission, the state agency that oversees the Texas electricity market, may increase a cap on wholesale power by 50 percent next week. According to the Texas Industrial Energy Consumers, a business group, this change could have added $4.5 billion to statewide energy costs had it been place last year.
If the PUC proceeds with another proposal to increase the cap even further, the cost to the wholesale energy market could exceed $14 billion, according to the TIEC.
The Texas Tribune calculates that an additional $4.5 billion in wholesale costs translates to nearly $17 per month, or $200 per year, for the average Texas household. An additional $14 billion could translate to $48 to $50 per month, according to the publication. But we can’t know for sure because there’s been no official analysis that takes up this specific question. Several lawmakers have requested such an analysis — including state Reps. Sylvester Turner and Rafael Anchia, and state Sens. Wendy Davis and Rodney Ellis — but so far nothing has been released.
The controversial proposals at the PUC are meant to deliver extra revenue to big generation companies so they build more power plants. Otherwise, the state may lack enough power to meet its future needs. But as some lawmakers and others have noted, there’s no guarantee that the generators will not simply pocket this extra cash. “I have concerns that some of the potential changes will lead to higher prices for the constituents that I represent, but with no clear payoff in terms of reliability,” wrote Sen. Davis in a May 4th letter to the agency.
The PUC on June 28th is expected to vote on the initial proposal to increase the price cap by 50 percent. That is, the cap would go from the current $3,000 per megawatt-hour to $4,500. The PUC could then vote later to increase the cap to $9,000. The initial increase would take effect as early as Aug. 1st, with higher increases potentially occuring in later years.
Have an opinion? Don’t be shy. You can comment at the end of this post, write the Texas Public Utility Commission at PUC Central Records, P.O. Box 13326, Austin, TX, 78711-3326 (be sure to reference Projects #37897 and #40268), or write your local lawmaker at the mailing address found at this link.