Texas PUC Chair: Have To Look At ERCOT $9,000 Price Cap; Ask Whether To Keep Energy-Only Market

During a hearing before a Texas Senate committee, DeAnn T. Walker, Chairman of the Public Utility Commission of Texas, said that policymakers need to look at the $9,000 per MWh price cap in the ERCOT energy market

Walker said that she believed that, when adopted, no one expected that the price would remain at the cap for four to five days

Walker further said that policymakers will need to ask whether they want to keep the energy-only market

"I don't have an answer to that," Walker said of a decision on the energy-only design, but said that it needs to be looked at.

Walker also said that the PUC is aware and "working on" issues related to ancillary service prices, but does not yet have a solution

Earlier in the hearing, Senator Angela Paxton pressed ERCOT CEO Bill Magness about invoice due dates for market participants (such as REP QSEs) and asked why ERCOT could not "pause" such invoice due dates to allow lawmakers to address what Paxton called "disturbing" appearances in pricing. Paxton wondered why ERCOT needed to issue immediate payments to generators, as Paxton believed that the gas markets don't settle until the 25th of the following month

Magness said that the challenge is that generators and municipal utilities need to pay their bills. Aside from gas bill issues, Magness said that a delay could impact positions in various other markets, such as ICE, which are tied to ERCOT settlements and schedules, and could cause positions to unravel. Magness said that, as described by generators, there are a lot of other things hinging on the expectation of the market of how funds are going to move, and if you change that, there are a lot of corollary impacts you might not even have visibility into

Magness said that ERCOT is working with market participants on all sides of the transactions to manage issues to get through this without a large loss to the market