Republican Candidate for Texas Lt. Gov Asks PUC to Reject Capacity Market

Texas Agriculture Commissioner Todd Staples, Republican candidate for Lieutenant Governor, has asked the Public Utility Commission of Texas to reject, "a traditional 'capacity market' system," for the following reasons:

• "Costs to Texas Taxpayers: The Texas Public Policy Foundation estimates that a 'capacity market' would force a $3 to $5 billion per year hike on electric bills, which amounts to $180 per year for every man, woman and child in Texas.

• "Clear Cost, Questionable Benefit: The costs of requiring consumers to pay for the promise of capacity - rather than actual electricity production - outweighs the benefit of hedging the mere fear that a shortage could occur at some time in the future.

• "Will Not Generate More Electricity: Even under such a system, requiring the promise for more generation capacity will not ensure more electricity is available.

• "Abandons Market Principles: Abandoning market principles for a mandated capacity structure compromises the work that has been done in Texas, fails to solve concerns about shortages, and creates long-term challenges for Texas' energy consumers, as demonstrated in other states where government attempts to control generation.

• "Circumvents the Legislative Process: This new direction conflicts with the intent of Senate Bill 7 and statute. Moving away from the legislatively directed market-based structure constitutes a major policy shift, which the Legislature should guide. "

"Maintaining the competitive structure of our electricity market must remain the priority. It is imperative to determine with certainty if electricity demand is outpacing supply. While models may indicate low reserve margins, the reality is that current market structure is sustaining a respectable reserve of approximately 15%, and new generation investment is already being built, as well as a number of proposals for additional generation upgrades and capacity which will assist in meeting future needs," Staples said.

"I propose the commission and ERCOT find solutions that will preserve the market-based structure and bridge those very short, intermittent gaps, by seeking additional supply from generators on an as-needed basis. When acquiring this additional supply, the process must be open and competitive for all generators, transparent to consumers, and have clear, measurable results with specific requirements and end dates," Staples said.