ERCOT: High Demand Will Raise Energy Prices During (And After) Snowstorms
On Monday, officials with Texas' Public Utility Commission introduced an order calling for higher energy prices due the current blackouts that approximately 4 million Texans are experiencing.
And you probably can't do anything about it.
According to KHOU, the order has caps so consumers won't be overpriced, but it also told The Electric Reliability Council Of Texas (ERCOT) to adjust any past prices to reflect the new changes.
Their logic: "Energy prices should reflect scarcity of the supply. 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."
There are two sides to this.
The argument The PUC may have is that the current grid of electricity that Texas uses has exceeded its supply.
The consumer's argument is that this is a bad time - in the middle of a pandemic when families are struggling to get by in the first place, only to be hit by this this unexpected horrible winter weather - and consumers are looking for relief as opposed to higher prices.
The San Angelo Standard Times reports that many electric customers on fixed-price plans may not see a change during their current contract period, but those with flexible plans designed to allow them to save money during times of high supply and low demand could see higher bills.
Meanwhile, Governor Greg Abbott on Tuesday declared that reforming ERCOT will be an emergency item during the current legislative session.
In a statement issued by the Governor's Office, Abbot said:
The Electric Reliability Council of Texas has been anything but reliable over the past 48 hours. Far too many Texans are without power and heat for their homes as our state faces freezing temperatures and severe winter weather. This is unacceptable. Reviewing the preparations and decisions by ERCOT is an emergency item so we can get a full picture of what caused this problem and find long-term solutions. I thank my partners in the House and Senate for acting quickly on this challenge, and I will work with them to enhance Texas’ electric grid and ensure that our state never experiences power outages like this again.”
Meanwhile, some people stand to make a great deal of money despite the massive energy failure in our state and millions of Texans without power are suffering now.
According to a newsletter from the League of United Latin American Citizens (LULAC), the organization is also calling for an investigation by state and federal officials to determine what led to the failures in Texas' power grid.
“LULAC is demanding that a full and transparent investigation be initiated by both members of the Texas congressional leadership and the Texas Legislature into the massive power failures that have people’s lives at risk,” says Rodolfo Rosales Jr., Director of Texas LULAC, which represents the largest number of the organization’s members in the United States and Puerto Rico. “It is unconscionable that we are faced with a critical situation that could and should have been anticipated. Only now are we being told that rolling blackouts and reallocation of limited available energy are the best solutions when experts knew their own disaster models predicted what would happen in severe ice storms and no one did anything!”
Rosales has pointed to a January 2001 piece of legislation titled Texas Senate Bill 7 as a factor in the situation we now find ourselves in. The legislation, he argues, provided opportunities for private companies and investors at the expense of adequate safeguards and oversights.
“Profit at the expense of human suffering is unforgivable and the elected officials who allowed this to take place need to be held accountable for not protecting us,” Rosales said. “Competition in sunny weather is great for businesses seeking to maximize their investment. However, not planning or having any solution to what to do during a storm is criminal and these private companies must pay severe penalties or be shut down altogether to prevent a repeat of this disaster."
Many will argue ERCOT could not possibly have anticipated the severity of the weather we've experienced or the surge in demand, but will that hold up in an investigation?
LOOK: A history of Black representation in movies