With ERCOT prices less than $20/MWh, Texas stops disconnects, launches probes

Houston — As Electric Reliability Council of Texas real-time prices averaged less than $20/MWh Feb. 22, state officials have forestalled disconnections for nonpayment and started investigating last week's winter storm-induced energy emergency, and thousands of retail electric customers will likely be switched to providers of last resort.

Real-time prices averaged negative 56 cents/MWh for the hour ending at 2 pm CT on Feb. 22, with wind output around 11 GW and solar output at 1.8 GW. For the previous 13 hours of Feb 22, real-time prices averaged about $15/MWh.

The contrast is striking with the week prior, when real-time prices averaged near the systemwide cap of $9,000/MWh as ERCOT remained in Energy Emergency Alert Level 3 status, which entailed rolling blackouts for millions of Texas power customers. As of about 4 pm CT Feb. 22, Texas had fewer than 14,000 customers out of service, most in central and western Texas, according to PowerOutage.us.

"The ERCOT System has left EEA3, but several market issues have arisen, and it is expected that mass transitions of customers to provider of last resort service will be needed," The Public Utility Commission of Texas said in a Feb. 21 order that authorized its executive director to approve requests for companies to be designated voluntary retail electric providers so that these can be considered as POLRs.

On Feb. 19, ERCOT notified market participants that their settlements would be less than usual, because two retail electric providers, Griddy Energy and MQE, had "insufficient funds ... to pay the amounts owed" by them.

Griddy owed almost $1.2 million, and MQE owed $377,265, according to the market settlement notice.

Risks for REPs

In a Feb. 22 filing in the PUC's POLR proceeding, Project No. 51812, Robert Cantrell, CEO of Pulse Power, another REP, said, "this event will have long-lasting impacts on the competitive market in Texas."

"Numerous REPs will leave the market, no new companies will enter, and the result is that prices will increase dramatically for consumers and businesses, harming the competitiveness of Texas as a whole," Cantrell said.

The PUC had previously designated only one VREP, TXU Energy Retail Company, a unit of Vistra Energy, as a POLR. Reliant Energy, a unit of NRG Energy, has asked to be designated a VREP, and the Feb. 21 order allows other large service providers similar to Reliant to also serve as POLRs, and set a deadline of 3 pm CT Feb. 22 to apply.

The PUC also forbade mass transitions before Feb. 24, so as to give new POLRs time to make whatever technical arrangements that might be required.

In a separate proceeding, Project No. 50500, Gexa Energy, a unit of NextEra Energy, also applied on Feb. 22 to be designed at VREP.

The PUC on Feb. 21 also authorized ERCOT to exercise its discretion to resolve financial obligation between market participants and ERCOT and to waive its protocols to the degree necessary to resolve those obligations.

The PUC on Feb. 21 also ordered a moratorium on electricity disconnections for nonpayment. The PUC also directed retail electric providers to offer a deferred payment plan to customers upon request.

Investigations launched

The PUC also has launched an investigation into the factors that combined with "the devastating winter weather to disrupt the flow of power to millions of Texas homes," a Feb. 20 news release states.

"The immediate impact of this terrible weather was the loss of power for millions of Texas households, and the financial aftershocks could be devastating," EPUC Chairman DeAnn Walker said. "We must act swiftly to discover not only how this crisis came together, but also take meaningful steps to protect electricity customers."

Texas Attorney General Ken Paxton issued civil investigative demands to ERCOT and several market participants regarding "power outages, emergency plans, energy pricing" and other issues related to last week's winter energy emergency. The other entities receiving CIDs were:

• American Electric Power Texas
• Calpine
• CenterPoint Energy
• Griddy Energy
• La Frontera Holdings
• Luminant Generation
• NRG Texas power
• Oncor Electric Delivery Company
• Panda Sherman Power
• Temple Generation
• Texas New Mexico Power

The ERCOT board of directors, which includes PUC members ex officio, will meet in an urgent virtual session at 10 am CT Feb. 24. Committees in both the Texas Senate and House will discuss the matter during meetings Feb. 25. The PUC will have its regularly scheduled meeting on Feb. 26.