Texas Set to Ban Griddy-Like Electricity Plans After Blackouts
(Bloomberg) -- Texas moved to ban retail electricity providers from offering the kinds of plans that led to astronomical power bills for customers during February’s energy crisis.
Legislation passed by the state Senate Thursday and sent to the desk of Governor Greg Abbott for signature prohibits companies from tying electricity rates to the state’s volatile wholesale power market. Prices in that market soared to $9,000 a megawatt-hour for several days in February, when a deep freeze triggered widespread blackouts.
The measure is part of a part of a package of legislation aimed to rein in, albeit modestly, Texas’s laissez-faire approach to electricity markets, which some have argued contributed to the catastrophe.
The state’s power system operates independently from other grids so as to avoid federal oversight, and the market relies almost exclusively on price signals to secure electricity rather than holding supply in reserve for emergencies.
Griddy, whose customers were infamously slammed with thousand-dollar electricity bills during the crisis, has since declared bankruptcy. The state’s grid operator revoked its operating rights and moved its customers to rival retailers after Griddy defaulted on required payments.
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