Texas House rejects electricity repricing bill
A day after the Texas Senate passed a bill requiring regulators to retroactively reduce wholesale electricity prices charged during last month’s catastrophic winter storm, Lt. Gov. Dan Patrick declared the legislation dead, saying Tuesday that the Texas House has declined to take it up.
Patrick, who rushed the bill through the Senate on Monday with a Saturday deadline for changing the prices, said the House will not bring it up for a vote.
In a statement, House Speaker Dade Phelan made it clear he does not agree with repricing electricity to minimize damage done by an estimated $16 billion in overcharges during the storm. Phelan, R-Beaumont, called it “an extraordinary government intervention into the free market, which may have major consequences for both residential and commercial consumers going forward.”
He sided with managers of the state’s electric grid — the Electric Reliability Council of Texas and the Public Utilities Commission — who said the decision to leave sky-high prices in effect was intended to protect Texans from further outages.
“ERCOT and PUC failed Texas repeatedly during this tragic event, but the decisions made on pricing were made based on ensuring the reliability of the grid,” Phelan said. “I believe that the decisions may have saved lives.”
Phelan’s office does not agree that the House killed the bill and pushed back against Patrick’s statement Tuesday. Still, the bill is not scheduled for any hearings in the House this week and would be moot after March 20. Phelan’s staff
would not say when it might schedule such a hearing.
As Patrick shared the news with members of the Texas Senate — 27 out of 31 senators supported it — he told them he was proud that they “stood for the individual” while “the House stood for big business.”
“Obviously, it’s going to be complex. Obviously, it’s going to be difficult,” Patrick said. “But I am so disappointed that something that 27 of you supported and all of you thought about, that is important to do — 26 million people under ERCOT — was dismissed without a serious looking at the facts.”
Patrick added in a statement later that the Senate hoped that House members would take a vote on the floor, “so their constituents know where they stand, just like we did.”
Gov. Greg Abbott had also raised
concerns that repricing would violate the Texas Constitution and stressed such a decision shouldn’t be made hastily.
The issue had caused an unusual rift between Abbott and Patrick, who rarely show anything but unity on priority issues such as this.
Patrick spars with Abbott
The downfall of Senate Bill 2142 is a victory for Abbott. After the storm, the second-term Republican governor had called for the Legislature to address the “correction of any billing errors,” but he later cast doubt on whether repricing was the right solution.
The spat between Patrick and Abbott over the issue began Friday when Patrick blasted Abbott’s newest appointee to the utility commission for a lack of “competence and questionable integrity.”
The commission chair, Arthur D’Andrea, has insisted that his agency does not have the authority to allow repricing at this point, and on Monday, Abbott said he worried lawmakers lacked the authority to take retroactive action on existing contracts. But Patrick, with the support of all but three senators, pushed forward.
Phelan, in his first term as speaker, seems unlikely to call for a floor vote on the matter. Part of the House speaker’s job is to protect members from taking votes that will spark political divisions without accomplishing anything.
His office said in a statement: “Speaker Phelan and Lt. Gov. Patrick have had no conversation about SB 2142.”
The high prices took a toll on retail electric providers and distributors who had to pay them to keep Texans’ power on.
CPS Energy out $1 billion
The state’s largest electric power cooperative, for example, Brazos Electric Power Cooperative filed for bankruptcy protection earlier this month. San Antonio’s CPS Energy is out of $1 billion and on Friday sued ERCOT, alleging it erred by leaving the maximum prices in place too long.
At the same time, generators that were prepared for the storm with weatherized equipment or that made money by reselling power through the grid have come out on top.
The chairman of the utility commission, which oversees the state’s grid operator, had also warned of the possibility that repricing would lead to lawsuits by power generators who would have to return earnings.
Phelan noted that after hearing almost 30 hours of testimony over the last several weeks, members have filed a number of bills to address the failures of electric grid, including alternatives to repricing that would give cash-strapped utilities the option to use securitized bonds to cover their debts over time.
Similar bills have been filed by Sen. Kelly Hancock, R-North Richland Hills, who was one of three no-votes on the Senate repricing bill.
“These House bills are set for hearing this week,” Phelan said. “The House will continue to examine this issue that touched the lives of every single Texan directly and indirectly.”
The House State Affairs committee will meet at 8 a.m. Thursday.