Exelon Calls for Repealing $9,000 Power Prices From Texas Crisis
(Bloomberg) -- Exelon Corp. called on Texas regulators to reset electricity prices from last month’s grid crisis, becoming one of the biggest generators to contest record-high energy costs.
The utility owner, which expects to take a $710 million hit from the Arctic blast that knocked half of Texas generation offline, asked the Public Utility Commission of Texas to rescind its Feb. 15 and 16 orders that set the price of electricity at $9,000-a-megawatt-hour, the maximum allowed.
The impact of those orders on power providers and industrial energy consumers “is crushing,” Exelon said in a petition Friday.
Exelon joins a chorus of state leaders, companies and individuals asking for changes to the way electricity was priced during the energy crisis that’s already pushed some power providers into bankruptcy. But while most critics have called for the price cap to be rolled back starting on Feb. 18, when the rotating outages ended, Exelon is one of the first to ask for prices to be reset during the height of the crisis, Feb. 15-16.
Those calling for repricing contend that had rates been set by the market, prices would have not have stayed as high as $9,000 for four straight days. The week before, the average spot price of wholesale electricity in Houston was $10.12 a megawatt-hour.
Texas’ power market now faces a $3 billion shortfall as more than a dozen companies grapple with sky-high power bills. An independent market monitor hired by the state has recommended reversing about $5.1 billion of $16 billion in overcharges stemming from the grid emergency -- but the utility commission has so far declined to do so.
The commission, as well as the Electric Reliability Council of Texas, which manages the grid, both maintain that the $9,000 price order was necessary to ensure that generators stayed online during the cold blast. But Exelon argues that such scarcity pricing simply does not work “as an emergency tool during weather-driven shortages.” The grid operator had other tools to ensure that generation stayed online, the company said.
“There was no nexus between the commission’s action and the peril at hand,” Exelon said in its filing. The company also argued that the commission had no authority to issue the orders, and that the orders themselves violated state law.
Generator Vistra Corp., which initially opposed repricing, has also said that some prices should be re-evaluated. The grid operator “violated one of the most fundamental, common-sense principles of energy regulation when it undercut prices early in the storm” and then raised them later in the week, a Vistra spokesperson said in an emailed statement.
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