Expand / Collapse search
☰

State lawmakers question massive profits earned during grid crisis

By
Published  March 11, 2021 11:18pm CST
News
FOX 26 Houston

State of Texas lawmakers question massive profits earned during power crisis

FOX 26 Reporter Greg Groogan has more as state lawmakers are questioning the massive profits that were earned during the state's power grid crisis from the winter storm.

During the height of the winter storm, the Public Utility Commission and those who run the Texas power grid "greenlighted" the offer of astronomical rates to anyone capable of generating electricity.

At a cost of $9,000 per Megawatt, 300 times the normal price, enough electricity poured in to stave off a complete meltdown of the system.

In the aftermath, Texans learned the tab for that ultra-expensive power runs deep into the billions.

SIGN UP FOR FOX 26 HOUSTON EMAIL ALERTS

At a State Senate Committee hearing Thursday, outgoing ERCOT Chief Executive Bill Magness defended the decision to offer the maximum price allowable for multiple days.
 
"We needed to maintain the consistency of the system and the integrity of the system in any way we possibly could. We did not want go back into outages, rotating or beyond rotating. We saw that light at the end of tunnel and we didn't want to turn back," said Magness.
 
But buying all that expensive power at the height of the crisis has triggered serious consequences. An electric cooperative has declared bankruptcy and energy retailers are folding because they can't pay.

MORE 2021 WINTER STORM COVERAGE

At a meeting of the House State Affairs Committee, Laredo Democrat Richard Raymond expressed genuine fear Texas rate payers will be left holding the bag for a broken system.
 
"The little guy will pay for it, and it will get stuck into their rates, and it will get stuck into their rates, and it will get stuck into their rates, and they'll pay for it and they get away with it," said Raymond.
 
In an effort to minimize the multibillion dollar cost, Lt. Governor Dan Patrick has proposed clawing back profits from those who met the emergency demand for power.

FOR THE LATEST NEWS UPDATES, DOWNLOAD THE FOX 26 NEWS APP
 
But a consensus appears to be growing that "re-pricing" after the fact would destroy trust in the market, turn winners into losers, and cause additional financial damage.