AUSTIN, Texas — The Texas Supreme Court will decide if state power regulators overstepped its boundary during the February 2021 winter storm.
During the storm, high demand for power led the state power grid manager to call for blackouts. Millions of people lost power, and hundreds died as temperatures remained in the single digits for days.
The Public Utility Commission (PUC) directed the Electric Reliability Council of Texas (ERCOT) to set the price for electricity to the max allowed at the time. Power plants sold electricity for $9,000 per megawatt hour for 32 hours.
The Independent Market Monitor’s report shows the max price cost Texas ratepayers $16 billion.
Some power companies went bankrupt.
Attorneys for Luminant Energy argue the PUC overstepped its authority. The Texas Office of the Attorney General (OAG) and attorneys representing power plants argue the move was made for reliability.
“It jammed prices to the max. It's set them there. And this argument that somehow that was necessary to preserve competition, that argument basically distills to an argument that we had to kill competition to save competition,” Allyson N. Ho, a partner with Gibson, Dunn & Crutcher said in court Tuesday.
“Competition is important, but it is subordinated to reliability,” Lanora Pettit, the principal deputy solicitor general at the OAG, said in court.
After the storm, Texas lawmakers passed a securitization bill. It provided a loan for power companies to repay that storm debt. Power companies pass the burden on everyone who pays an electric bill.
The court expects to release its opinion by June 30.