State Legislators to PUC: Before You Raise Electricity Price Caps, Calculate the Costs

As we told you recently, the Texas Public Utility Commission is looking at raising the maximum amount that electricity generators can charge for power during times of high demand, when prices typically spike. Right now, the cap -- the state's gesture to keep us from getting gouged every July -- is $3,000 per megawatt hour. The PUC wants to boost it to $4,500 this summer and potentially triple it by 2015.

The alleged goal is to entice companies into building more plants and take pressure off the grid. When we first reported this, though, we asked a bunch of people what that means for consumers' electricity bills. The answer: Don't ask.

Well, not exactly. The answer actually involved a stew of acronyms and technical terms like peaker plants, forward pricing and settlement increments, which together added up to: Don't ask. We suggested this meant your bills would go up, based on Life Rule No. 4: What you don't understand will eventually screw you.

Luckily, state Representative Sylvester Turner of Houston and Senator Wendy Davis of Fort Worth aren't that easily put off. They've sent letters to the PUC asking the agency to investigate what raising the cap will cost consumers.

"As far as I know, there have been no studies that outline the potential financial impact of these proposals to individual consumers and business. ... Neither am I aware of any guarantees that with more profits, generators will invest in new capacity," Turner writes.

Writes Davis: "I have concerns that some of the potential changes will lead to higher prices for the constituents that I represent, but with no clear payoff in terms of reliability." Neither Turner nor Davis returned my calls, so I think we can say without fear of contradiction that they are a pair of socialists who don't get capitalism. Why, to suggest that raising something's top price will make it more expensive is pinko-nomics. And to hint that Texas' fine electric-generating companies would simply pocket any extra dough is slanderous. (Note to Texas' generating companies: Now please turn our power back on. My boys are gettin' sweaty.)

Turner's letter raises a clearly leftist point: "I have watched as electricity prices have gone up over the years -- and all the while many within the industry have urged us in the Legislature to not pursue corrective action. But now that prices have come down somewhat, many within the industry now want market intervention. To me, this raises issues of basic fairness."

Obviously the man doesn't grasp basic electric pricing concepts like SNOO.

You say you don't know what SNOO is? Oh, man. You are so screwed.

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Patrick Williams is editor-in-chief of the Dallas Observer.
Contact: Patrick Williams