L.M. Sixel in the Houston Chronicle published a story entitled, "A May price spike shows vulnerability of power market to manipulation — and cost to consumers."

The story includes views from the usual players -- including Robert McCullough and a representative from AARP

While we won't address all claims, such as those related to data input "errors" from QSEs, the story lumps into manipulation two other behaviors which are not manipulation -- the small fish swim free rule, and bidding designed to recover costs other than solely short run marginal cost

With respect to the small fish rule, Donna Nelson, when she was Chair of the Texas PUC, aptly noted that the small fish rule is not a concern. "To the extent somebody is a small fish and exercises market power and bids above short-run marginal cost, others will enter the market, so it is a short-term issue, and one that I think the market handles well," Nelson said in 2014.

Regarding bidding above marginal costs, which the Chronicle takes aim at by noting a 2008 settlement between the PUC and TXU for alleged "economic withholding" as well as various "voluntary mitigation plans" filed by several generators, Barry Smitherman, when commissioner and chair of the Texas PUC in 2005 and 2008, penned the definitive treatises on why evaluating claims of an abuse of market power, based solely whether a QSE offered at short-run marginal cost, is simply inappropriate and unworkable in the energy-only ERCOT market

"It seems perfectly rational to me that a generator would attempt to recover a return on and of capital investment through its BES offers. I think it a bit theoretical to assert that generators in ERCOT are acting rationally only when they offer at short-run marginal cost. If generators are unable to recover long-run marginal costs, then I fear we run the risk of discouraging additional generation investment at a time when it appears that we are really beginning to need it," Smitherman noted in 2005

Smitherman's memo is here

See the Houston Chronicle's story here