Austin News

The Texas House is in no hurry to rubber-stamp legislation rushed through the Senate on Monday to reverse $16 billion in huge electric bills sent out following last month's extreme weather crisis.

In a story published Tuesday, The Texas Tribune referred to the sudden stall in the House of Senate Bill 2142 "the first major schism between the two chambers this legislative session." Lt. Gov. Dan Patrick criticized the House for stalling passage of the measure. 

"The Texas Senate stood for individuals, and I’m proud of you," Patrick said. "The House stood for big business."

Now former Texas Public Utility Commission Chairman Arthur D’Andrea | puc.texas.gov/

The schism is rooted in Gov. Gregg Abbott's push for the Senate and House to consider emergency legislation to turn back large power bills many Texans are getting following last month's winter storms that left millions without power and running water, the Wall Street Journal reported last week.

The Texas Senate on Monday, in an unscheduled floor action, approved SB 2142, which directs the Public Utility Commission (PUC) to order the state electric grid and market operator "to correct billions in erroneous electric charges during the February winter storm," the Senate said in a news release issued the same day.

"If this is not fixed, the customers, the ratepayers, the people of Texas; they'll be bearing this," bill sponsor Sen. Bryan Hughes (R-Mineola) said in the news release.

Some have previously argued that SB 2142 doesn't go far enough. The measure requires the PUC to reprice the market for about half the time the price was at $9,000 when the commission had no authority to raise prices, Energy Alliance Policy Director Bill Peacock wrote in a Dallas Express op-ed published days before the Senate vote.

Peacock argued that the price for power following the storm could result in $30 billion of refunds, calling that figure "the right thing to do - ethically and economically."

"Texas consumers and blindsided market participants, and even renewable generators, deserve a full refund of the overcharges from the PUC's blunder," Peacock wrote. "...Unwinding this mess may be the only way to save what is left of competition in the Texas electricity market."

Meanwhile, the PUC told senators that refunds aren't up to the PUC. In testimony before the Senate Jurisprudence Committee prior to the vote, Arthur D'Andrea, the PUC's then newly appointed chair, tried to tell senators that the Legislature - not the PUC - is empowered to turn back the large billing charges, according to the news release.

D'Andrea was appointed PUC chair following the resignation of his predecessor, DeAnn Walker. Abbott then announced earlier this week that D'Andrea had stepped down.

The legislation passed notwithstanding, and Patrick said from the Senate rostrum afterward that it's up to the House to as quickly pass the bill. As with many other statements from lawmakers since last month's weather crisis, the Electric Reliability Council of Texas (ERCOT), the PUC and power generators are catching almost all of the blame.  

"The Senate has acted," Patrick said in the news release. "We are asking the governor to join us, I think if he will say he will sign this bill, it may help us get this bill through the House."

The political rhetoric all but drowns out assertions that power generators that make up the Texas grid find themselves in a dilemma. Shortly after last month's dire effects began to lift, Reuters reported that Texas legislators will have to choose between litigation from power companies and traders over rollbacks of electricity prices or cascading bankruptcies if they don't.

A Texas Panhandle wind farm has already filed a lawsuit, arguing it shouldn't have to pay $71 million to its bank following February’s storms. ERCOT also reached out to Goldman Sachs and other finance companies to head off a payment shortfall, the Wall Street Journal reported March 12.

ERCOT discussed financing options with Goldman and others, while San Antonio’s public utility sued to avoid liability for a growing market shortfall.

Last month's winter freeze drove up the price of electricity in the largely unregulated power grid to about $9,000 megawatts per hour. With the grid teetering toward complete failure, power generators had to purchase high-priced power from elsewhere and found themselves in conflict with state officials and the financial world.

"You don't know who you’re hurting," D'Andrea said during a PUC meeting earlier this month in statements reported by CW39 Houston. "You think you're protecting the consumer, and it turns out you're bankrupting a co-op or a city. And so it's dangerous to do so after something is run to go around and redo it."

Abbot's call for D'Andrea's resignation appears to have been over the former PUC chair's comments during that meeting.

As D'Andrea lost his job, House Speaker Dade Phelan (R-Beaumont) pushed back on the Senate's characterization of the billions of dollars in huge electric bills as a mistake. 

There had been "no error" in operator pricing in what actually had been "a proactive decision" and a reversal now now "based on disagreement with PUC and ERCOT's management decisions is an extraordinary government intervention into the free market," Phelan said in a statement issued Tuesday.

"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," he said. "I believe that these decisions saved lives."