AUSTIN (Nexstar) — On Thursday, industry watchdogs updated how much ERCOT overcharged power companies during the winter storm in February.
After different figures were used by the Public Utility Commission at a House hearing Thursday morning, the Independent Market Monitor for ERCOT Carrie Bivins cleared up the confusion, after being asked by Sen. Nathan Johnson.
“Would it be so far off to say that the $16 billion, even though it’s a correct number, in terms of what everyone feels from it, it’s not really a real number, whereas the $5.1 [billion], after everything washes out with hedging and netting, is the real number that we’re all gonna feel?” Sen. Johnson asked.
“The $5.1 [billion] is real,” Bivins replied.
“$5.1 [billion] is the money that is spent, that has left the system and ain’t coming back as a result of whatever happened in the storm, whatever, however, we want to account for it?” Sen. Johnson followed up.
“That’s the money that would change hands if our recommendations were put into place,” Bivins answered.
While the updated figure is significantly less than the original economic estimate, it doesn’t make lawmakers’ decision on whether to reprice or not any easier.
“If you do reprice, I think you probably helped more co-ops than you hurt,” PUC Commissioner Arthur D’Andrea explained to lawmakers Thursday morning.
Repricing retroactively changes the prices that were charged for electricity during the winter storm. D’Andrea said it would take money away from generators and give it to retail electric companies.
“The challenge with repricing is those who made the investment and performed higher than expectations will be punished,” explained UT Energy Institute’s Michael Webber.
D’Andrea said repricing would not have much of an impact on customers, “[It] doesn’t really help consumers or hurt consumers,” but with one big exception.
“Repricing takes monies away from generators. Well, guess who owns a whole lot of generation in the state? The people of Texas own a whole lot of generation in the state. And that takes two forms. That’s either a city-owned power plant… so our municipal utilities, San Antonio has one, Austin has one… And the rural co-ops,” D’Andrea testified Thursday.
That could leave taxpayers in those areas picking up the bill.
“If you reprice, South Texas, the Valley will get hammered. They will have to take a loan from the bank, and the citizens in the valley will be paying that back for a decade,” D’Andrea said.
But, energy experts agree that there is no easy solution.
“There are winners and losers from the event a few weeks ago. And if we reprice, it creates a different set of winners and losers,” Webber explained.