Appeals court says state agency set electricity prices too high during 2021 winter storm

The Public Utility Commission’s actions led to billions of dollars in overcharges, the Austin court found. It is not yet clear whether the ruling will affect consumers.

By: Emily Foxhall & Erin Douglas — Texas Tribune

Published: March 17, 2023 / 2:25 a.m. CDT

Updated: March 17, 2023 / 2:25 pm CDT

AUSTIN (Texas Tribune) – A Texas appeals court surprised the electricity world on Friday by ruling that the Public Utility Commission overstepped its authority during the deadly February 2021 winter storm when it raised the price of electricity at most, $9,000 per megawatt-hour.

The price was set so high on February 15 and 16 by the Texas Electricity Regulatory Commission in an effort to tell the market that more power generation was urgently needed. Its leadership believed that the financial instrument intended to adjust the cost of electricity was malfunctioning as electricity generators went out of order and grid operators cut power to homes and businesses, the ruling explains.

The price of electricity is fluid in Texas; it goes up when demand is high to incentivize more production and avoid grid overload. But the state’s Electric Market Monitor said in the aftermath of the storm that Texas overcharged retail electricity suppliers by $16 billion for power which it then passes on to residents and businesses across the state.

Electric utility Luminant appealed the pricing decisions in the month following the storm. He argued that the commission exceeded its authority in setting the price to the maximum, among other points. The Austin Third Court of Appeals agreed in the ruling issued Friday. But the consequences of his decision weren’t immediately clear, as the court remanded the case for further consideration.

The Public Utilities Commission declined to comment.

This developing story. Check back with the Texas Tribune for updates.

This article originally appeared in The Texas Tribune at The Texas Tribune is a non-profit, non-partisan media organization that informs Texans – and engages with them – on matters of law and order, politics, government and the state.

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