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- Texas officials said Friday they don’t plan to reverse $16 billion in electricity overcharges.
- The fees were incurred during a deep freeze that roiled power grids in the state last month.
- According to the Public Utility Commission of Texas, it “is impossible to unscramble this sort of egg.”
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Texas officials said they do not plan to reverse an estimated $16 billion in electricity overcharges incurred during a deep freeze that roiled the state’s power grids and left millions without power last month.
In a meeting on Friday, the Public Utility Commission of Texas (PUCOT) said it will be too challenging to fix and re-price the charges due to a variety of external factors. Speaking before the committee, chairman Arthur C. D’Andrea said that due to a number of hedge funds and private transactions tangled up in the fees, it will be “impossible to unscramble this sort of egg.”
“You think you’re protecting the consumer and it turns out you’re bankrupting a co-op or a city,” said D’Andrea, who took the place of former commission chair DeAnn Walker, who resigned earlier this week in the face of criticism over the handling of the power crisis.
The announcement comes on the heels of reports from Potomac Economics – an independent market watchdog group overseeing PUCOT – that found PUCOT instructed the power grid operator to fix prices at $9,000 per megawatt per hour, the highest possible price permitted.
The rates shot up shortly after blackouts enveloped the state, as PUCOT moved to eschew market-based pricing systems in favor or ordering the inflated wholesale prices until the power grid was fixed. However, according to the Potomac Economics report, these prices remained at the inflated rate for 33 hours longer than necessary.
Some residential customers whose bills were tied to the wholesale market rate for electricity ended up with bills of $5,000 or more for less than a week of energy.
Potomac Economics and several other organization have urged the state and the Electric Reliability Council of Texas (ERCOT) - an organization operated by a privatized system and regulated by PUCOT without federal regulation - to reset and lower prices as the state tries to recover from the financial and economic turmoil caused by the storms.
The Wall Street Journal reported that among the groups calling for repricing is Vistra Corp, one of the state's biggest power generators, which has stated that not doing so "would result in unjust and unreasonable outcomes."
Meanwhile, the state has seen a flurry of resignations as it fails to deliver answers to Texans and find a solution for the financial and economic turmoil. In addition to the departure of former PUCOT chairwoman Walker, ERCOT CEO Bill Magness was ousted from his position and seven of the 15 members of ERCOT have also resigned.