The day after the Texas Senate passed a bill requiring regulators to retroactively cut wholesale electricity prices charged during last month’s catastrophic winter storm, Governor Dan Patrick declared the law dead, saying on Tuesday that the Texas House refused to accept it.
Patrick, who rushed the bill into the Senate on Monday with a deadline on Saturday to change prices, said the House would not put it up for a vote.
On a In a statement, Mayor Dade Phelan made it clear that he did not agree with the electricity price readjustment to minimize the damage caused by about $ 16 billion in excessive charges during the storm.
Phelan, R-Beaumont, called this “an extraordinary government intervention in the free market, which could have important consequences for residential and commercial consumers in the future”.
He teamed up with the state’s grid managers – the Texas Electric Reliability Council and the Public Utilities Commission – who said the decision to keep sky-high prices in place was meant to protect Texans from further disruptions.
“ERCOT and PUC failed in Texas repeatedly during this tragic event, but pricing decisions were made based on ensuring the reliability of the network,” said Phelan. “I believe that the decisions may have saved lives.”
Phelan’s office does not agree that the House canceled the bill and rejected Patrick’s statement on Tuesday. Still, the bill is not scheduled for any House hearing this week and would be debatable after March 20. Phelan’s team did not say when it could schedule such a hearing.
While Patrick shared the news with members of the Texas Senate – 27 of 31 senators supported him – he said he was proud that they “defended the individual” while “the House represented big business”.
“Obviously it is going to be complex. Obviously, it will be difficult, ”said Patrick. “But I am so disappointed that something that 27 of you supported and everyone thought about, which is important to do – 26 million people under ERCOT – was dismissed without a serious analysis of the facts.”
Patrick added in a subsequent statement that the Senate expected members of the House to vote in plenary, “so that its constituents know what their position is, as do we.”
Governor Greg Abbott also raised concerns that repricing would violate the Texas Constitution and emphasized that such a decision should not be taken hastily.
The issue caused an unusual feud between Abbott and Patrick, who rarely show anything but unity on priority issues like this.
Patrick fights Abbott
The fall of the Senate Bill 2142 is a victory for Abbott. After the storm, the second-term Republican governor asked the legislature to address the “correction of any billing errors”, but he later doubted whether the price correction was the right solution.
The discussion between Patrick and Abbott on the issue began on Friday, when Patrick criticized Abbott’s newest public service commissioner for a lack of “questionable competence and integrity”.
Commission chairman Arthur D’Andrea insisted that his agency does not have the authority to allow prices to be renegotiated at this time, and on Monday Abbott said he feared that lawmakers would not have the authority to take retroactive measures in existing contracts.
But Patrick, with the support of everyone but three senators, moved forward.
Phelan, in his first term as mayor, seems unlikely to call a plenary vote on the matter. Part of the mayor’s job is to protect members from voting that will trigger political divisions without doing anything.
His office said in a statement: “Mayor Phelan and Lieutenant Governor Patrick have not talked about SB 2142.”
CPS Energy exits $ 1 billion
The high prices affected retail electricity suppliers and distributors, who had to pay them to keep Texans’ energy on.
The largest electric power cooperative in the state, for example, the Electric Power Cooperative Brazos filed for bankruptcy protection earlier this month. San Antonio’s CPS Energy lost $ 1 billion and on Friday sued ERCOT, claiming it was wrong to leave maximum prices for too long.
At the same time, generators who were prepared for the storm with weather-resistant equipment or who earned money by reselling energy over the grid won.
The chairman of the public service commission, which oversees the state’s grid operator, also warned of the possibility that the renegotiation would lead to lawsuits by power generators that would have to return their earnings.
Phelan noted that after hearing nearly 30 hours of testimonials in the past few weeks, members filed a series of accounts to resolve power outages, including revaluation alternatives that would give cashless utilities the option of using securitized bonds to cover their debts over time.
Similar bills were tabled by Senator Kelly Hancock, R-North Richland Hills, who was one of three non-voters in the Senate repricing bill.
“These House bills will be heard this week,” said Phelan. “The Chamber will continue to examine this issue that has affected the lives of each Texan directly and indirectly.”
The Chamber’s State Affairs committee will meet at 8 am on Thursday.
Jeremy Blackman contributed to this report.