Texas Residents Face Nearly $38 billion in Energy Costs from Winter Blackouts

By Andy Nghiem at the Austin News

Texas residents face nearly $38 billion in energy costs related to power outages caused by last winter’s extreme arctic storm.

As Winter Storm Uri battered Texas in February, causing massive blackouts across the state, the Texas Public Utility Commission (PUC) issued an order increasing the price of electricity to $9,000 per megawatt hour, compared to the average price of roughly $20 per megawatt hour.

The PUC rationalized its decision by stating that the high price would encourage energy companies to produce electricity during the power outages and that the prices should be a reflection of scarcity, energy expert Robert Bryce wrote in a Forbes article.

“Energy prices should reflect scarcity of the supply,” stated the PUC order. “If customer load is being shed, scarcity is at its maximum, and the market price for the energy needed to serve that load should also be at its highest.”

That rationale seems contradictory to some critics, however. Market price is set by the market and, despite PUC’s claim of desiring a “market price,” the commissioners overrode the actual market price and arbitrarily imposed a much higher price onto much-needed electricity.

Instead of reversing the PUC’s arbitrary and potentially illegal action, the Texas Legislature passed several measures designed to deal with the blackout, according to Texas Tribune.

“Texas ratepayers will ultimately be saddled with about $37.7 billion in excess energy costs,” Bryce wrote.

Bryce explains that Potomac Economics, hired by the PUC as the “market monitor” for the Texas grid, estimated the cost of the PUC order to be about $16 billion, but that the actual cost could be as high as $37.7 billion.

Read the Rest at the Austin News