Austin (WBAP/KLIF) – The Public Utility Commission of Texas today is expected to adopt a plan that will ultimately raise electricity rates for consumers, with hopes that it will spur the building of new gas-powered power plants.
The proposed “performance credit mechanism” would pay power companies that produce electricity to be available when there’s an electricity shortage on the grid. In short, electric companies would buy power credits with the cost likely passed on to consumers.
ERCOT CEO Pablo Vegas touted the plan during the PUC commissioners last week, “Investment are only sent on the scarcity on the system today. So to break the cycle of scarcity and surplus a different system to signal steady investment is clearly needed.”
Critics are skeptical that the plan which will ultimately add $2.00 a month to a $100 electricity bill will lead to the construction of new power plants.
While the Office of Public Utility Council which advocates for consumers said in a written statement last month that the risk is “soley borne by the end-user.
“Regarding the Performance Credits Mechanism (“PCM”), it appears that all price risk is borne solely by the end-user,” officials with OPUC wrote. “There are no assurances that paying generators for PCs will result in the building of any new generation assets that may reduce overall energy prices and result in fewer scarcity pricing events lucrative to generators in the market.”
Governor Greg Abbott has endorsed the plan.
(Copyright 2023 WBAP/KLIF 24/7 News.)
