Texas Governor Clashes With Lieutenant Over Blackout Overcharges
(Bloomberg) -- Texas Governor Greg Abbott rebuffed the state’s second-ranking official, who has called for reversing billions of dollars in power overcharges stemming from last month’s historic winter storm.
Abbott said he doesn’t have the authority to comply with Lieutenant Governor Dan Patrick’s demand that $16 billion in excessive electricity costs be retroactively erased. This is the first time the leading Republicans in state government have publicly clashed over the pricing issue.
In a letter released late Friday, Abbott also voiced support for embattled Public Utility Commissioner Arthur D’Andrea, who was publicly excoriated by Patrick and lawmakers this week over his refusal to reverse the charges. D’Andrea infuriated some lawmakers on Thursday when he said the grid manager’s decision to keep power prices elevated at the maximum-allowed $9,000-per-megawatt-hour rate was justified, and that altering them at this stage would do more harm than good.
“It is clear to me there is a difference of opinion of whether there was a billing error or there was a deliberate decision to take action to save the lives of Texans in their homes,” Abbott said in his letter. “You asked that I ‘intervene to ensure the right thing is done.’ The Governor does not have independent authority to accomplish the goals you seek.”
The dispute underscores just how contentious Texas’ power-market crisis has become. Lawmakers, regulators and companies are all at odds over how to settle a $3 billion financial shortfall stemming from sky-high electricity prices during the energy crisis that left millions in the dark for days.
In the meantime, two companies have filed for bankruptcy and more than a dozen others face default. If the state’s grid operator isn’t able to cover the debt, it will be spread out to all market participants and, eventually, to consumers.
The widening rift between two of the Texas GOP’s most-ambitious politicians sets the stage for a contest between state house leaders who are sympathetic to the governor’s stance and a senate overwhelmingly in favor of Patrick’s approach.
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