For Immediate Release (Thursday, June 28, 2012):
For More Information: Cyrus Reed, 512-740-4086 (cell)
Statement by Cyrus Reed, Conservation Director, Lone Star Chapter, Sierra Club on the Decision Today by the Public Utility Commission to Raise the Cap on Electricity Prices
“Today’s decision by the state Public Utility
Commission to raise the maximum wholesale energy cap
from $3,000 to $4,500 per megawatt hour this summer
is the wrong answer at the wrong time to
assure that Texas continues to meet electric power
“Raising the cap this August will raise energy
prices on home and business owners. But it won’t
lead to any new investments in electric power generation
because power plants take 18 to 24 months to build.
And it won’t allow energy users to bid into the
market with ‘demand response’ measures to
avoid those price hikes because the software and infrastructure
to accomplish that has not been developed.
“It makes no sense to raise energy prices today
when new generation will not result until 2014 anyway.
By doing so we are just giving over our checks to electric
utilities like Luminant and NRG to produce the same
power they are already producing. Now those utilities
will have a built-in interest in keeping power supplies
tight so they can charge the maximum price and pad their
Sierra Club joined the Texas Industrial Energy Consumers,
Public Citizen, the Office of Public Utilities Counsel,
the City of Austin, City of Houston, and most electric
cooperatives as well as the smaller retail electric
providers in opposing the rise in the cap advocated
by the Public Utility Commission (PUC).
but separate proposal from the PUC would potentially
raise the cap yet again in 2013 through 2015, leading
to a maximum of $9,000 per MWh in 2015.
An independent “backcast” analysis
by ERCOT showed that if the wholesale cap had been
raised in 2011 to $4,500, the average homeowner would
have paid about $15 more per month on their electricity
bill, while raising it to $9,000 could lead to about
a $40 per month hit to the average family.
Sierra Club, and many other consumer, environmental,
industrial and retail electric providers that sell energy
have instead called for a multi-pronged approach to
assure there is sufficient generation over the coming
years. Among Sierra Club’s preferred solutions
• Implementing the current PUC rulemaking on energy
efficiency in a flexible way that raises the goals for
investor-owned utilities to meet 30% of their growth in
energy demand through energy efficiency programs in 2013,
as required by the legislature;
• Moving forward at ERCOT and the PUC on allowing
energy users to bid into the market with “demand
response” where they agree to shift their peak energy
use in exchange for payments;
• Moving forward with rules at ERCOT where energy
storage devices like batteries and Compressed Air Energy
Storage can be paid at market prices for their energy;
• Finally implementing the 500 megawatt requirement
for non-wind renewable energy sources like solar and geothermal
by 2015, as approved by the legislature in 2015.