Texas Weighs Electricity Market Reforms To Avoid Blackouts

The Public Utility Commission of Texas is discussing major reforms to the state’s electricity market with the purpose to avoid a repeat of the power failures and blackouts in February 2021, which led to the death of more than 100 people and left over 11 million residents without electricity for days.

The regulator is discussing at a meeting on Thursday around a dozen proposals to make the grid more stable and reliable in case of emergencies. Proposals include paying power generators that are on standby when the grid needs backup, and requiring companies to pre-emptively buy capacity to meet future demand.

It is not clear yet how many and which of the proposals for electricity market reforms PUC will endorse today.

Analysts and consumer protection bodies warn that the measures will raise the energy bills for consumers.

“Customers will be paying for more, but will they be getting more reliability?” Michael Jewell, an attorney with Jewell & Associates PLLC who represents clients at PUC proceedings, told Bloomberg.

“This is going to take us further down a path that’s going to increase cost to consumers, we better be darn sure these are the right choices,” Tim Morstad, Associate State Director, AARP Texas, told FOX 4 NEWS.

Last month, a report by the North American Electric Reliability Corp warned that the Texas grid remained vulnerable to blackouts in case of a repeat of this year’s February Freeze.

According to the 2021-2022 Winter Reliability Assessment report, Texas risks a 37-percent reserve margin deficit in case of a harsh winter, NERC said.

A reserve margin is the reserve of power generation capacity comparative to demand. The expected reserve margin for Texas for this winter, according to NERC, is 41.9 percent. Yet if another cold spell hits the state, it would affect this spare capacity, pushing the margin deeply into negative territory.

By Charles Kennedy for Oilprice.com

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