AUSTIN (Nexstar) — While Central Texas is still dealing with the aftermath of last week’s ice storm, state lawmakers are still addressing different problems revealed two years ago, after a severe winter storm in February 2021 led to the state power grid’s near-collapse.
Texas senators are weighing a proposed overhaul to the state’s electric grid Tuesday, in an effort to increase its reliability after the 2021 disaster led to extensive blackouts and contributed to hundreds of deaths.
The purpose of this hearing is to discuss proposed changes to the wholesale electric market design and the impact such changes will have on the reliability of the Texas electric grid. Furthermore, the Committee will discuss electricity outages resulting from recent weather events.
At the start of the Senate Business and Commerce Committee hearing, the vice chair acknowledged an elephant in the room — the notable absence of chairman Sen. Charles Schwertner, R-Georgetown, after he was booked in Travis County Jail overnight on DWI charges.
“The chair, as you know, is not going to be able to be with us today,” Sen. Phill King, R-Weatherford said.
Schwertner has been one of the most vocal Republicans in criticizing the PCM model, citing concerns that it won’t guarantee new dispatchable generation “in a timely and cost-effective manner.”
In January, the Public Utility Commission of Texas approved a redesign of the state’s electric market, recommending a new model they said will improve grid reliability. But critics argue this model could pass on more costs to consumers.
The PUC unanimously approved a memo on Jan. 19, recommending the legislature adopts the “Performance Credit Mechanism” or PCM model. It’s a new market design that will essentially give power generators credit for producing more power when supply is low, ostensibly to incentivize the free market to produce more power when Texans need it.
In a Jan. 10 letter, Abbott argued the PCM best meets the legislature’s reliability requirements because “it is based on a reliability standard, incentivizes new dispatchable generation, and maintains Texas’ energy-only market.”
The goal is to increase the grid’s reliability by restructuring how companies buy and sell energy.
“Our goal was to provide you all the broad definition of the best reliability service that we could identify as a result of our analysis,” PUC Chairman Peter Lake said during the hearing. “And we recognize that there are a lot of technical questions yet to be answered.”
During the hearing, lawmakers appeared skeptical of the market redesign proposal, questioning PUC Chairman Peter Lake.
“How do we know? How can you tell us we’re going to have more reliability,” Sen. Donna Campbell, R-New Braunfels, asked.
Mark Bell, CEO of the Association of Electric Companies of Texas, said he was not surprised by lawmakers questioning, given how complex the PCM model is.
“These plans are incredibly intricate and technical,” he said.
If lawmakers were to reject this proposed plan, it could further set back reforms to the electric grid.
“The the challenges are that it takes time to implement them, not only at the regulatory side, but then also just steel in the ground,” Bell said. “What’s at risk is, is having more outages, not having enough electrons on the grid at a given time when there is greatest demand or need.”
The committee did not take any action on the proposal on Tuesday. Texas lawmakers cannot vote on any legislation within the first 60 days of session, unless it falls under the governor’s emergency items — which Abbott will announce during his State of the State next Thursday.