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Texas PUC Chair Responds To Legislator Letters On ERCOT Reserve Margin

February 01,2018

Texas PUC Chairman DeAnn Walker has written responses to several Texas legislators who had written the Commission expressing concerns about ERCOT's forecast low reserve margin.

See more on the original letters here, some of which raised concerns about higher prices and "blackouts"

In a letter to Texas State Representative Ron Simmons, Walker wrote, "Based on classic economic principles, it is anticipated for the coming summer that there will be higher wholesale electric prices due to the fact that there is lower supply of generation. These higher prices will in turn signal additional investment in generation resources and will also likely forestall additional retirements due to economic decisions. Retail electric providers and consumers have a wide variety of product offerings that can be used to protect against the anticipated increases in prices. While the supply of generation will clearly be tighter than in the past few years, it is anticipated that ERCOT has sufficient tools to address the reliability of the ERCOT system."

Simmons had cited the PUC's consideration of ERCOT price formation issues, and Walker wrote, "As you noted, the Commission is considering all available information in the above referenced project to determine if any changes to the market design are necessary. It is my intention to consider all relevant information in an informed and measured manner to determine what actions are best for the citizens of Texas. The Commission must do so with a thoughtful balance of the interest of the market participants as well as the ratepayers."

Walker sent letters with similar language to other lawmakers

Texas State Representative Tan Parker, in a letter sent earlier this month but only filed as part of Project 47199 yesterday, wrote Walker that, "I commend you for taking serious consideration of what the latest projections mean and what solutions can be enacted to prevent a sacristy [sic] environment that could not only be risky in terms of electrical service and security capabilities, but could cause unnecessary loss of power for residents and significant price increases."

Texas   ERCOT  

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