See below for a statement released by the Lt. Governor’s office and the Governor’s office today.
Governor Greg Abbott wrote a letter to Lt. Governor Dan Patrick:
I am in receipt of your March 12, 2021 letter.
It is clear to me there is a difference of opinion of whether there was a billing error or there was a deliberate decision to take action to save the lives of Texans in their homes. That issue will ultimately be decided by courts.
As a former Texas Supreme Court Justice and former Attorney General, I agree with the position of the PUC Chair about his inability to take the action you requested. You asked that I “intervene to ensure the right thing is done.” The Governor does not have independent authority to accomplish the goals you seek. The only entity that can authorize the solution you want is the legislature itself. That is why I made this issue an emergency item for the legislature to consider this session.
Lt. Gov. Dan Patrick March 12 statement Call to PUC
Lt. Gov. Dan Patrick issued the following statement today in response to the Senate Jurisprudence Committee hearing on Thursday:
“Gov. Abbott made correcting the Electric Reliability Council of Texas’ (ERCOT) pricing errors an emergency item and asked us to move quickly. We did.
“Senate Jurisprudence Chair Joan Huffman convened her committee yesterday and charged it with finding out the facts about the pricing errors over 32 hours on February 18 and 19. She assured the committee and the public that ‘just because something is difficult and complicated, it doesn’t mean we won’t move forward if it is the right thing to do.’
“Senator Huffman conducted a thorough and thoughtful hearing lasting over five hours including testimony from ERCOT’s own Independent Market Monitor (IMM), the outgoing President and CEO of ERCOT and the Chair of the Public Utilities Commission (PUC). Here is what the testimony revealed:
- ERCOT did not pull down the $9,000 per megawatt hour price after the PUC order had expired on February 17 at 11:55 PM when the major threat to the grid had passed and the system was in balance.
- Carrie Bivins, the IMM, testified that the $9,000 pricing cap should have been pulled down at that time. ‘It was a difficult decision for us to ask for a price correction in a real time market, but it was an error and it should be corrected. I did not make that statement lightly.’
- Ms. Bivins reiterated that $16 billion is the economic market impact of the error adding that $5 billion is the likely accounting impact of the error and potential liability to the public including at least a billion dollars to public power.
- Ms. Bivins also noted that the providers and market participants in ERCOT are very familiar with the rules and procedures for price corrections and correcting this error would not be an unusual act.
- Ms. Bivins was an extremely knowledgeable and credible witness who candidly responded to over 2 hours of questioning from the Senate Jurisprudence Committee.
- By contrast, Arthur D’Andrea, Chair of the PUC, demonstrated little competence and questionable integrity throughout the hearing. He gave several different answers to a House panel in the morning than he gave to the Jurisprudence Committee in the afternoon. He also said things that simply weren’t true. Most notably, he said the Lower Colorado River Authority (LCRA) had told him they would go bankrupt if the prices were corrected. LCRA immediately put out a statement saying they had said no such thing. What was even more incredulous, he persisted in saying he was being truthful, despite LCRA’s statement to the contrary.
- Inexplicably, he said it would be ‘illegal’ for him to correct ERCOT’s pricing, although he had testified earlier in both the House and Senate hearings that it was not illegal and he had corrected pricing before.
- Finally, when asked if he were directed by Gov. Abbott to correct the pricing errors, he said he would not.
- The fact is ERCOT has the authority to correct the error if they are ordered by the PUC to do so. The PUC has the authority to direct ERCOT to lower the price pursuant to Utilities Code § 39.151 (d).
“It is true that correcting the pricing error will result in change, but it will bring more equity to the costs. Most importantly, it is the only way we can protect consumers from ultimately having to pay for this pricing error.
“Senator Huffman put it succinctly in the hearing when she asked ‘which market do you think has more integrity? A market we know has an error but does nothing about it or a market where we recognize an error that was created by some type of government intervention and we do correct it?’
“I am extremely proud of the Senate Jurisprudence Committee for their thorough investigation on this issue. Gov. Abbott asked us to move quickly and we did. The findings of the Senate Jurisprudence Committee are clear – the pricing errors of February 18 and 19 must be corrected and the PUC should direct ERCOT to correct them immediately.
“In light of the PUC Chair’s refusal to take any corrective action, despite the fact that he has the authority and the evidence is clear, I am asking Gov. Abbott to intercede on this issue.
“I am also asking Gov. Abbott to replace Mr. D’Andrea on the PUC when he fills the other two vacancies there. Mr. D’Andrea’s position requires both professional competence and honesty and he demonstrated little of either in the hearings yesterday. I believe most Texans who watched the Senate Jurisprudence hearing would conclude that D’Andrea should not have full authority over ERCOT or be part of the solution moving forward.”
