Texas lawmakers yesterday found themselves on the horns of a power market dilemma: expect lawsuits from utilities and traders if they retroactively cut cold-snap electricity prices, or “cascading bankruptcies” if they do not, Reuters reported. The state’s grid operator sharply hiked power prices during a February freeze, pushing two power companies into bankruptcy and prompting others to default on bills. Officials this week called for regulator Public Utility Commission (PUC) of Texas to immediately reduce about $16 billion in power prices. But PUC Chairman Arthur D’Andrea told lawmakers at a hearing in Austin that any repricing would trigger lawsuits the state could lose. Commodity contracts used to hedge power have closed and any repricing “will have consequences” for the state’s power, agriculture and other markets, he said. The state independent market adviser testified the PUC can cut spot market prices over the final hours of the crisis and claw back fees for services not provided. The two would eliminate $5.1 billion in costs from those most affected, said adviser Carrie Bivens. The $16 billion figure was the potential cost of all power sold at a $9,000 per megawatt hour spot price that officials set to induce more generation. However on Thursday, she said the money that changed hands at the high price was much less because some companies had fixed-price contracts or both supply and purchase power.
