bring more resources online. That price represented a jump for winter electric costs which typically sit well below $100, and while initially identied as a necessary emergency step, the PUC’s independent market monitor Potomac Economics later said the increase remained in place for too long and recommended revising the systemwide pricing error over the tail end of the February emergency. Lt. Gov. Dan Patrick in March also pushed for repricing, saying that correcting the error was in consumers’ best interests regardless of its potential eects on the market. Despite that push, the $16 billion mistake labeled by Potomac in March as one that would “result in substantial and unjustied economic harm” remains on the books. Lawmakers instead acted this spring to mitigate the overcharge by spreading it out over time, likely resulting in monthly power bill hikes to settle ERCOT’s ledger and keep generating power online. That securitization, or long-term distribution of debt, is facilitated through bills such as House Bill 4492. If signed, hundreds of millions of dollars would ow from the state’s economic stabilization, or “rainy day,” fund allowing ERCOT to issue debt obligations
“I’m not feeling particularly condent coming into summer that ERCOT and the various utilities and energy companies have the tools that they need, againmostly because of the lack of policy direction,” Lewin said. Capitol considerations SenateBill 3, authoredby Sen. Charles Schwertner, RGeorgetown, was lawmakers’ headline bill aimed at xing the grid through emergency preparedness and changes to protect freezing facilities and transmission systems that failed in the deep cold this year. During Abbott’s June 8 signing of the bill, Schwertner said it “addresses many of the concerns” stemming from the storm, and Abbott touted the measure and its companion Senate Bill 2 for their improvements to state oversight, weatherization and overall grid integrity. “Bottom line is that everything that needed to be done was done to x the power grid in Texas,” Abbott said. Despite supporters’ claims that the bills represent sucient xes, the legislation also prompted concerns of a lack of signicant, immediate and enforceable improvements after their passage.
MOVES Legislators ended their spring session by passing several bills into law aimed at electric grid reforms, accountability and nancial xes.
SOURCE: TEXAS LEGISLATURE COMMUNITY IMPACT NEWSPAPER
Senate Bill 2
• Adjusts the leadership structure of ERCOT to an 11-member board of directors • 8 members experienced in certain trades, selected by a separate panel of political appointees • All members must be Texas residents • Final 3 members include ERCOT CEO, Public Utility Counsel chair, Public Utility Counsel residential and small- commercial representative
Sen. Kelly Hancock, R-North Richland Hills
to cover the money it is owed. That funding over time would account for losses stemming from recent bankruptcies in the power sector. The bill would also spread out additional unintended charges and costs incurred during the February disaster over years or decades. “This comes under theheadingof adding insult to injury,” Hirs said of such legislation. “This of course is an incredible irony, if not absolute hypocrisy, of the free market Texas Legislature and executive.” Despite those statewide changes, most Austin-area residents could be relieved fromdecades of slightly
“This bill is not going to cause companies in the gas supply chain to weatherize in advance of this winter. There is nothing in there that requires them, there is nothing in there that will scare them or motivate them,” Lewin said of SB 3. Rep. Donna Howard, DAustin, shared those critiques. She said measures such as SB 3 oer enough to “still feel good about” despite the nal results of the package and the session falling short. “Despite the fact that we all know this, it bears repeating … Texans died, and died unnecessarily because we did not have a good
FAST FACT 1 MW POWERS
Senate Bill 2154
• Expands the Public Utility Commission membership from three to ve seats • All members must be Texas residents experienced in business, government, engineering, law or utility regulation
Sen. Charles Schwertner, R-Georgetown
during periods of peak demand.
SOURCE: ELECTRIC RELIABILITY COUNCIL OF TEXASCOMMUNITY IMPACT NEWSPAPER
higher billing given their service from Austin Energy. The municipal utility said in March it pushed against winter storm repricing, saying it would have resulted in a negative for its customers. “Austin Energy expects no immediate or direct impact on our customers’ bills. ... The utility will continue to monitor the implementation of the securitization measures as they move through state, regulatory, and market bodies to assess any longer-term eects on customers’ electric rates,” said Jennifer Herber, Austin Energy public information manager. While they may be spared from joining in the statewide securitization, Austinites are members of the power system that this year has swung from strains to blackout in hot and cold. And whether incidents such as the June call for conservation were a preview for this summer remains to be seen. Additional reporting contributed by Trent Thompson.
system in place to ensure that their power wouldn’t go out. And so I don’t want to let us o the hook,” she said. Following a purge of leadership at ERCOT and its regulator, the PUC, lawmakers solidied further change to the grid authorities through SB 2 and Senate Bill 2154, which limit membership to Texas residents, adjust the size of both bodies and add political inuence to certain appointments. Sen. Sarah Eckhardt, DAustin, said the political sphere’s approach at rst resembled an “o with their heads” response with regulator rings and resignations coming in quick succession. Even with the changes, she said tracking improvements to some state departments’ disaster responses and communications rather than legislation are the best The monetary consequences from the February winter storm are a less visible meltdown legislators also sought to tackle this spring. Given the pressing need for more power generation in the thick of the February storm, ERCOT hiked electricity prices to their cap of $9,000 per megawatt-hour as an incentive for companies to avenue forward. Financial fallout
Senate Bill 3
• Mandates some gas and electric generator weatherization, sets penalties • Designates “critical” facilities • Creates statewide alert system for grid imbalances • Allows “critical care” or vulnerable customers to be identied and kept online
Sen. Charles Schwertner, R-Georgetown
House Bill 1520
• Allows gas utilities to recover “extraordinary costs” from disasters through securitization nancing
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House Bill 4492
Rep. Chris Paddie, R-Marshall
• Allows ERCOT to recover unpaid invoices through securitization nancing
SOUTHWEST AUSTIN DRIPPING SPRINGS EDITION • JUNE 2021
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