The Texas Public Utility Commission on Wednesday called for quick changes at the state power grid to get a lid on skyrocketing prices in the roiling wholesale power market.
In recent months, certain spot prices on the wholesale electricity market have spiked over what was supposed to have been a cap of $2,250 per megawatt hour. Typically, that electricity sells for less than $100 but on occasion it had hit the $4,000 mark.
During an emergency meeting Wednesday morning, the three-member commission directed the power grid operator to consider and implement software changes that would ensure that prices don't exceed the cap.
Experts at the PUC explained that the current cap limits the price that wholesale generators can ask for their energy. But because of a quirk in the power grid's complicated software, generators sometimes receive payments higher than what they ask to be paid -- resulting in recent prices that have exceeded the cap.
The commissioners acknowledged it was an extremely complex problem, but said it was one that power grid engineers and market participants need to work out quickly. As a possible result of those spikes and high fuel prices, four electric retailers have gone belly-up in recent weeks and thousands of customers have been involuntarily shifted to high-priced default providers.
"This is incredibly complicated -- it's an understatement to say it's extremely complicated -- so we need some smart people looking at this," said PUC commissioner Julie Caruthers Parsley, in directing power grid experts to tackle the problem.
PUC chairman Barry Smitherman said he was agnostic on how the problem gets fixed, but that he wants it fixed quickly. An official with the power grid, a quasi-governmental organization known as the Electric Reliability Council of Texas, or ERCOT, said that they might come up with a temporary fix as soon as their next meeting, on Tuesday.
An independent monitor of the Texas electricity market has recommended the modifications considered Wednesday. He earlier had recommended other changes, which the power grid operator adopted last week.