Texas Senate Fast-Tracks Rollback of Winter Storm Electricity Prices

Texas senators, armed with an emergency mandate from the governor, blew past typical procedures to pass a bill requiring energy regulators to retroactively lower prices during the February winter storm that knocked out power for millions.

A truck drives past a highway sign in Houston on Feb. 15, 2021. (AP Photo/David J. Phillip)

AUSTIN, Texas (CN) — Last month’s winter storm has whipped the Texas Legislature into an unusually frantic state this week.

On Monday, state senators suspended the chamber’s rules, voted without a public hearing and bypassed the typical March 12 deadline for filing new bills in a scramble to pass an emergency statute aiming to reverse billions of dollars in electricity costs imposed by the state’s grid operator, the Electricity Reliability Council of Texas.

ERCOT has been in hot water since February’s winter storm, which plunged Texas into a weeklong period of intentional rolling blackouts and unintended power outages that subjected millions to freezing temperatures.

The harsh conditions killed dozens and cost some residents thousands in spiked energy costs.

The Public Utility Commission of Texas’ independent market monitor, the Virginia-based Potomac Economics Ltd., found on March 4 that ERCOT overcharged the state’s utilities $16 billion by improperly inflating the price of energy to its maximum cost — $9,000 per megawatt hour — for 32 hours longer than was proper.

In other words, even though the rolling blackouts had ended the night of Feb. 17, the grid operator maintained scarcity pricing through 9 a.m. on Feb. 19. The news prompted San Antonio’s energy utility to sue ERCOT in state court late last week over the allegedly inflated electricity prices.

Senate Bill 2142 directs ERCOT to correct the pricing errors described in that independent review by Saturday, March 20. It was filed by Senator Bryan Hughes, a Republican representing Mineola.

The bill had widespread support and passed in a 27-3 vote.

“We shouldn’t have to be doing this,” said Senator Bob Hall, R-Edgewood, on Monday. “If we don’t do this, the real losers are going to be our citizens. They will eventually pay for this, one way or the other. … We are truly correcting a billing error that’s no different than any other transaction in which someone is being charged incorrectly.”

Though Texas’ deadline for filing bills and joint resolutions was last Friday, the lawmakers were allowed to consider this new bill because the state’s governor, Republican Greg Abbott, submitted it as an emergency matter.

“We were not scheduled to be in session. It took the will of the body to come into session today as an emergency item,” said Texas Lieutenant Governor Dan Patrick after the Senate voted to pass the bill on Monday afternoon. “The governor asked us to pass legislation on his priorities. There’s been some that said this legislation is invalid. Of course, the governor would not give us an emergency order to pass a bill that would not be valid.”

“The Senate has acted,” Patrick continued. “We are asking the governor to join us. And I think if he will say he’ll sign this bill, it may help us get this bill through the House, and hopefully they will take on this motion to save taxpayers and ratepayers billions of dollars.”

Arthur D’Andrea, the sole remaining member of the Public Utility Commission after his two co-commissioners resigned in the winter storm’s aftermath, told the Senate last week that he does not believe the PUC has the legal authority to change the market price of power retroactively.

Patrick, who has publicly called for D’Andrea to step down from the commission, sent the state’s Republican attorney general, Ken Paxton, a letter Tuesday morning asking his office to weigh in on whether the the PUC may legally “correct the pricing of wholesale electricity and ancillary services” for those wintry days.

The bill now goes to the Texas House of Representatives, whose Committee on State Affairs convened Tuesday morning to consider the legislation. State representatives grilled an ERCOT executive about whether the sustained surge pricing was an error or a deliberate management decision.

The Senate and San Antonio’s utility are not the only actors retaliating against ERCOT’s sky-high pricing. Paxton also filed a state-court lawsuit against a Houston electricity company for allegedly overcharging its customers.

That company, Griddy Energy LLC, has since filed for Chapter 11 bankruptcy. Late Tuesday morning, Paxton announced that his office has ensured the bankruptcy proceedings offers “releases to approximately 24,000 former customers who owe $29.1 million in unpaid electric bills.”

Paxton says that Griddy will release its customers’ outstanding charges, and in return the state will abate its lawsuit and investigation so long as Griddy continues to work “in good faith” to provide relief for those customers and the Texans who already paid their exorbitant bills.

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