This is not the way a free market would work.
It’s been 12 years since the state moved to deregulate its market for electrical power, but some people say free-market competition for power customers won’t deliver it.
Worries about the supply of electricity rose again early Monday when temperatures plunged in North Texas and elsewhere. As power demand spiked, two big power plants went off-line because of weather-related problems, and others were lost due to other issues.
The Electric Reliability Council of Texas, which manages most of the state power grid, issued an Energy Emergency Alert 2. The loss of another big generating plant could have brought rotating power outages.
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ERCOT asked consumers to set thermostats no higher than 68 degrees and to turn off and unplug nonessential lights and appliances.
It asked people not to run washers, dryers and electric ovens during peak hours — between 6 and 9 a.m. and 4 and 8 p.m.
Businesses were asked to minimize the use of electric lighting and electricity-consuming equipment.
Meanwhile, recent regulatory changes from the Public Utility Commission allowed power-generating companies to charge retail electric suppliers more than $5,000 per megawatt-hour, about 100 times the typical $50 per megawatt-hour price.
What’s wrong with this picture?
Why were those two big plants knocked off-line when the cold weather hit? ERCOT said both shutdowns were “related to freezing of instrumentation used to provide control of the plants.”
But grid officials and regulators implemented new standards after a severe winter storm in 2011, calling for effective insulation, heaters and wind screens to protect sensors and hydraulic lines on crucial operating controls.
Apparently, they missed a few.
Two of the three PUC members say power companies need even more financial incentives to build additional generating capacity.
They’re inclined to give those companies more money.
So much for the free market.
How could supply and demand ever balance if regulators are willing to tip the scales?
The state does need more generating capacity, but it has not been shown that free markets wouldn’t deliver it.