PUCT Chair Nelson Corrects Inaccurate Reports Regarding Stance on Capacity Market

During today's open meeting, Public Utility Commission of Texas Chairman Donna Nelson offered the following statement to correct inaccurate reports concerning her position on capacity markets:

"Yesterday I became aware that there's a belief that at a speech at NARUC I indicated I supported a capacity market. I did not make that statement.

"Instead, I discussed the actions that we've taken to date, the potential additional changes we have proposed in our long-term rulemaking, and the additional project we opened to review the Brattle report. I said that the Brattle report did a good job of giving us options, and Brattle concluded that even with all the changes we have proposed to date -- the changes we've made, the short-term rulemaking, and the long-term rulemaking -- that we will achieve only a 10% reserve margin, and that will drop to 8% if we adopt a more gradual scarcity pricing curve

"I said that I thought reliability was paramount, I continue to think that, and I don't think rolling outages are acceptable, or a way of incenting generation investment. Given that, I said it's my duty as a Commissioner at this very pivotal time in the Texas electric market to further consider the options that Brattle has laid out. I did not say that I supported a capacity market; that would be premature. But given where we are, I don't think we can afford to take anything off the table.

"I have long been skeptical about capacity markets, and the energy-only market has worked well in the past to incent investment. If there is a market solution, not a regulatory solution, that will give us the reserve margin we need without a capacity market, that would be a good thing. But, I will do my level best as the Chair of this Commission to keep the lights on and air conditioners running in Texas."