Smitherman: ERCOT Market Design Contains Correct Incentives Email This Story February
PUCT Chairman Barry Smitherman, during a Texas Senate hearing on the rolling outages
earlier this month, said that ERCOT's current market design sends the correct signals
to plants to be online when needed most, so plants can take advantage of any potential
scarcity pricing which results during shortages.
Asked by one lawmaker regarding whether, during declared crisis situations, the PUCT
should establish a rule that fixes a constant, "stable" price paid to generators,
Smitherman replied that such a design could have unintended consequences.
Smitherman also reiterated, consistent with earlier statements, that initial indications
show that no manipulation occurred during the weather event, though the PUCT is conducting
a thorough investigation. Smitherman noted that many of the units that were offline
were lower-cost solid fuel units, which would be the type of capacity that would not
be withheld as such capacity would most benefit from any scarcity pricing.
ERCOT also reported that as many as 82 generation units were offline during some
period of time from about midnight Feb. 2 through early afternoon, though not all
82 were offline at the same coincident time.