Dallas City Wire

A state senator who represents suburban Dallas-Fort Worth recently said he is confident with the Public Utility Commission of Texas' transparency when it comes to annual electrical cost under an often-spiking pricing mechanism.

The PUC of Texas historically has been transparent about such changes in its oversight of the Electric Reliability Council of Texas [ERCOT], state Sen. Kelly Hancock (R-North Richland Hills) told Dallas City Wire.

"Changes to the ERCOT market design are discussed publicly in PUC open meetings and proposed changes are available in the commission's public docket," Hancock said. "The independent market monitor looks at the financial impacts of any changes, which are published in its annual State of the Market Report and made public in the commission's 'Review of Summer 2019 Market Performance' project. So as far as transparency, I'm comfortable with the information that's available to the public and to our decision makers."

ERCOT operates the state's electric grid and manages the deregulated market for about three-quarters of the state, where the PUC has primary jurisdiction. This includes monitoring price variations of the Operating Reserve Demand Curve (ORDC). 

Not everyone has Hancock's faith in the PUC of Texas' transparency, however. The PUC of Texas' published information can be very difficult to understand, Energy Alliance Policy Director Bill Peacock told Texas Business Coalition in August.

"PUC published no information last year that made it easy for the public to understand how much the ORDC cost," Peacock told the Texas Business Coalition. "I had to do calculations based on the information they did publish to determine that the ORDC cost about $3.6 billion last year, but the PUC never put that information out directly. They didn't do that until about October or November of last year.

The ORDC is usually triggered when system reserves, such as variable drops in wind speeds, fall to critical levels and that often leads to energy price spike, experts in the field say.

Such a spike occurred in the Houston area in late August when the wind dropped and it certainly can happen again, Texas Tech University’s Rawls College of Business Associate Professor at Michael Giberson told Lone Star Standard in September.

"We're relying more on wind power because it's a bigger part of the overall energy mix but it's variable, which means that when the wind flows down, it will naturally lead to higher prices," Giberson said in Lone Star Standard's Sept. 15 report. "Wind power [on Aug. 31] dropped off from about 4,000 megawatts at around 10 a.m. and by 4 p.m., it was 1,500 to 1,600 megawatts, which means other power plants have to fill in the gap."

Other factors that day included high demand due for heat and air conditioning, all of which area electrical customers noticed on their bills. Overall, the ORDC raised the average price for power last year from $9 to $10 and added about $3.6 billion to wholesale electrical costs that year, according to an Energy Alliance report.