Texas power regulators say the state’s three largest generators used their size to boost power costs for consumers by as much as $380 million after the deadly 2021 winter storm.
NRG Energy Inc., Vistra Corp. and Calpine Corp. increased the costs for households and businesses to get power from August 2021 to July 2022, the Public Utility Commission of Texas said in filings Wednesday. The companies are not accused of wrongdoing. Nor do they face any fines or penalties.
Widespread power failures triggered deadly blackouts in February 2021, causing the state grid to start procuring more fast-starting supplies to prevent further shortages. The companies, which own the biggest share of fossil fuel and nuclear generation in the state, grew in influence as this happened, the regulator said.
“NRG has not been accused of market power abuse by the PUC, nor is NRG under investigation for market abuse,” company spokeswoman Laura Avant said in an email.
Vistra’s “conduct has been lawful at all times” and the company amended its agreement with the PUC, with the support of the market monitor, in response to changes in market conditions, spokeswoman Meranda Cohn said in an email.
Calpine also pointed to the change in market dynamics and spokesman Brett Kerr said the company is “not under investigation, nor has Calpine been accused with regards to anything related to the filing made today,” according to an email.
It’s a rare move by the Texas regulator against power generators wielding influence on the state grid, which transports electricity from plants to consumers. The grid, run by the Electric Reliability Council of Texas, has been operating conservatively, procuring excess power supplies to avoid a repeat of widespread shortages during the winter storm more than two years ago.
The ability for certain suppliers of grid services “to effectively control the price” caused the price of those reserves “to exceed competitive levels,” tacking on between $285 million to $380 million over the course of the year, according to a filing.
The PUC’s comments underscore the state’s mounting challenge of making sure the market is competitive while also helping consumers get the power they need as more extreme storms and a fast moving transition to renewable resources put stress on the system.
The companies have signed contracts with the commission that gives them an “absolute defense” any allegations of market manipulation. As part of the Wednesday findings, the commission amended those protections for Calpine and Vistra and terminated some parts of the protections for NRG. All three companies agreed to change their contracts.
“The amendment further enables the market monitor for the state grid to investigate should concerns arise,” NRG spokeswoman Avant said. “NRG agrees with this amendment and, as such, did not negotiate changes with the PUC.”
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