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Houston Chronicle Implies ERCOT Raised Texas Electricity Prices at the Behest of the Governor, But Does ERCOT Work for the Governor?

Drawing the conclusion that ERCOT kept prices needlessly high is under consideration in Jones’ court; it is the PUC’s call on whether to order electricity prices to their maximum and it still isn’t clear that the governor called for high prices to continue as long as they did. ERCOT follows the PUC’s direction, not Abbott’s.

February 23, 2022 — The Houston Chronicle claims testimony from the former head of ERCOT implicates Governor Greg Abbott in the extremely high prices ($9,000 per megawatt hour) charged for electricity during the February 2021 Winter Storm Uri Texas power crisis, even though ERCOT was acting at the direction of the PUC.

The Public Utility Commission of Texas, a state agency, is charged with oversight of the Electric Reliability Council of Texas (ERCOT), which is an independent system operator that operates the electricity grid for most of the state.

During testimony in the Houston bankruptcy court of US Bankruptcy Judge David Jones over whether Brazos Electric Cooperative should even be required to pay those extremely high rates, former ERCOT CEO Bill Magness was called as the first witness.

Referring to former PUC Chairman DeAnn Walker, Mr. Magness said, “She told me the governor had conveyed to her if we emerged from rotating outages it was imperative they not resume.”

“We needed to do what we needed to do to make it happen,” Magness is quoted in the Chronicle.

Ms. Walker was appointed to the PUC by Governor Abbott on September 20, 2017.

Considering chain of command, however, with the ERCOT CEO under jurisdiction of the PUC, it seems questionable whether ERCOT could claim under any circumstances that it was working under orders from the governor, as the Chronicle claims Magness was doing.

It would seem likely that Ms. Walker might claim that she was working under orders from Gov. Abbott, but is there a link between any such direction from the governor and the PUC’s decision to raise emergency electricity prices to the maimum and keep them there even though the crisis appeared to be easing?

That doesn’t appear to have been established in the trial in Judge Jones’ court as yet.

Therefore, the Chronicle headline, “Ex-ERCOT chief says he was following Abbott’s direction to halt blackouts when they ran up billions in bills during freeze” and the newspaper’s conclusion appear questionable.

Drawing the conclusion that ERCOT kept prices needlessly high is under consideration in Jones’ court; it is the PUC’s call on whether to order electricity prices to their maximum and it still isn’t clear that the governor called for high prices to continue as long as they did.

We look forward to testimony from Ms. Walker.

See the Chronicle article by James Osborne here.

— Mike Shiloh