Lawmakers get update on Texas power grid heading into winter months

A hearing Tuesday, before the State House Energy and State Affairs committees, began with an optimist report.

"The bottom line is the reliability Reforms you all passed as part of SB 3, and we have implemented the PUC and ERCOT are working, the lights are staying on. And most importantly, we are continuing to switch from the old crisis based business model to a reliability based business model that focuses on people and households rather than corporate profits," said Public Utility Commission Chairman Peter Lake.

The second part of that is what caught the attention of energy analyst Ed Hirs.

"The good news is it looks like the lights will stay on for this year. The bad news is you're going to be able to see the bill," said Hirs.

The costs of new winterization rules, and the price for not being prepared, have started coming in. Lawmakers are feeling the pushback especially from consumers.

"Almost 50% of the bill says it's a delivery charge," pointed out Rep. Todd Hunter ( R ) Corpus Christi.

Hunter continued to make a point he is worried about the burden change will have on utility customers. Hirs suspects a certain day in November is also a factor.

"Well, you know, certainly it's an election year and everybody on the committees is running for reelection," said Hirs.

Lawmakers were told rules are in place to fine energy producers for non-compliance.

"Then those cases potentially could be referred to the attorney general for up to that million dollar penalty. As y'all have written," said Railroad Commissioner Christi Craddick.

State Rep. Donna Howard (D), Austin, noted that was a million per day.

But there is concern about what additional changes will have. Especially with restructering how energy producers are compensated.

"And so I guess my encouragement is I'm really hoping that you will not do any implementation until the legislature can meet, look at your recommendations and then either affirm that in some way or suggest changes, make changes, whatever we need to do," said State Rep Phil King (R), Weatherford.

Lake responded by saying, absolutely.

"Yeah, we're getting we're getting really close to a turf battle.Well, now these representatives and senators are looking at what's coming from ERCOT, the PUC and the Railroad Commission, and they're not altogether certain they like it," said Hirs.

A drawn out fight, Lake indicated, could determine if more power plants are built.

"And we'll always be mindful of how damaging uncertainty in the investor marketplace can be. It's taken us a long time to get to this point, and we certainly want to start putting steel in the ground as soon as possible," said Lake.

With what Lake said, Hirs agreed if the state doesn’t get companies to build new power plants, get steel in the ground, it doesn't matter what is done on paper.

"If we don't add additional generation capacity to the ERCOT grid and make it economic for people to reinvest, to keep their units up to snuff, we're going to be in great trouble," said Hirs.

Despite all the uncertainly that remains going forward, Hirs said he feels better about the power grid than he did a few months ago. More will be known this fall. 

Several new rules and advisory reports on the grid are expected to come out with in the next 30 to 60 days.