Texas House Speaker Disagrees With Bill Senate Passed To Reverse ERCOT's Overcharges

AUSTIN, Texas (CBSDFW.COM) - Texas House Speaker Dade Phelan disagreed with a bill passed quickly by the State Senate on Monday, to reverse billions of dollars in overcharges by ERCOT during last month's widespread power outages.

The state says those outages are responsible for the deaths of 57 people across Texas.

In a statement Tuesday afternoon, March 16, Phelan expressed doubts about lawmakers changing ERCOT's pricing during February's winter storms.

"Repricing based on disagreement with PUC and ERCOT's management decisions is an extraordinary government intervention into the free market, which may have major consequences for both residential and commercial consumers going forward."

The PUC is the Public Utility Commission, which regulates ERCOT, and has commissioners selected by Governor Greg Abbott.

Since last month, the Chair, DeAnn Walker resigned after Lt. Governor Dan Patrick called for her to step down.

The Governor named another Commissioner, Arthur D'Andrea Chair, who has said the PUC doesn't have the authority to reverse ERCOT's overcharges and shouldn't.

Another Commissioner, Shelly Botkin, also resigned.

During a hearing Tuesday before the State Affairs Committee, outgoing ERCOT CEO Bill Magness defended his decision to charge the maximum rate for electricity on the wholesale market during the storms, two days after the immediate crisis passed.

"We knew that people were dying, we knew people didn't have oxygen that they needed. The entire industry had gotten to a place where we didn't need outages anymore and we could not go back after all this suffering we had seen over three and a half days."

In his statement, Speaker Phelan agreed with Magness' decision, calling it "A proactive decision and not an error.. I believe that these decisions may have saved lives."

It served as a striking contrast to actions by the State Senate Monday.

Senator Bryan Hughes, R-Mineola, introduced a bill that said the PUC has the authority to reverse ERCOT's overcharges and ordered it to do so.

The legislation was quickly approved in the Committee on Jurisprudence, then debated and passed overwhelmingly by the full Senate 27-3 that same afternoon.

In a tweet Tuesday evening, the Lt. Governor said, "We have until the end of the week for @PUCTX to correct the error. It is the Senate's hope that the House will be allowed to vote on the floor, up or down, so their constituents know where they stand, just like we did."

During Tuesday's hearing in the House, Carrie Bivens, representing an independent firm hired by the state to watch the electricity market, repeated her statements that ERCOT made a mistake and should not have kept wholesale electricity prices at their maximum for two days after the crisis passed.

"Economically efficient prices must reflect actual supply and actual demand and departing from this fundamental principle erodes the integrity of the market."

When asked at the hearing if this would help the public, Bivens said, "I believe so, yes."

Bivens said the overcharges would be passed on. "If they don't get absorbed by the investors, they get passed to ratepayers."

While both sides disagreed whether ERCOT's charges should be reversed, they agreed that when all is said and done, Texas consumers will likely have to pay more for electricity.

Magness told House members, "I will not deny ultimately, consumers are going to pay for everything, one way or the other."

Governor Greg Abbott considers this issue an emergency item that needs to be worked out by the legislature.

In:
• ERCOT
• Texas Legislature