Texas Approves More Power Market Rules To Avoid Another February Freeze

Dec 17 (Reuters) – The Public Utility Commission (PUC) of Texas has approved more reforms to improve power market reliability and help avoid price spikes and outages like those seen during last winter’s February freeze.

The rulings on Thursday were the latest in a series of measures designed to prevent a repeat of the energy emergency caused by February’s Winter Storm Uri, which killed more than 100 people and left around 4.5 million Texas homes and businesses without power and heat – in many cases for days.

“This a move away from the crisis-based business model we have operated under for the past two decades. This new model centers on reliability,” PUC Chairman Peter Lake said in a statement.

One change will provide power price signals sooner than in the past to encourage electric companies to bring on more generation and large customers to reduce usage before energy supplies becomes scarce and an emergency occurs.

Another change adopted this week will increase market incentives for large consumers to decrease electric usage in response to prices and grid conditions.

During the February freeze, the Electric Reliability Council of Texas (ERCOT), which operates most of the state’s power grid, ordered rolling blackouts to prevent the grid from collapsing as extreme cold shut power plants and froze gas pipelines.

At the same time, power and gas prices soared to record highs in parts of Texas and other U.S. Central states, costing several utilities and their consumers billions of dollars that will have to be paid back over several years.

Over the past several months, the PUC, other state agencies and ERCOT have taken several other steps to boost reliability and protect customers, including a reduction in the ERCOT power price cap to $5,000 per megawatt hour from $9,000.

(Reporting by Scott DiSavino; editing by David Evans)