Dive Summary:
- Over the next 15 years, Texas is set to experience $14 billion in economic losses due to frequent power outages if the current energy-only market remains unchanged, a new study prepared by Charles Rivers Associates and commissioned by NRG Energy predicts, according to DallasNews.com.
- The report projects electricity reserve margins will decrease over the next few years as power companies seem reluctant to built new generation plants and Texas' population continues to grow. The report suggests moving to a capacity market—where electricity reserve margins are requirements, not targets—will prevent up to four outages per year and electricity prices from rising dramatically, according to Fuel Fix.
- The Texas Public Utility Commission is currently split on how to solve the problem at hand, while newly appointed commissioner Brandy Marty has yet to comment on the issue. The PUC is expected to make a decision on the issue in the fall.
- NRG Energy filed the report with the Texas Public Utility Commission on Tuesday.
Reactions:
“In an energy-only market that is experiencing an increase in electric consumption, you should always be showing a shortfall four to five years out. Why would anyone build power plants unless they were sure that there would be someone to sell the power to?” — Texas PUC Commissioner Kennet
“If you look at what it costs on a yearly basis to have a mandated reserve margin, which would probably include a capacity market, you can significantly reduce the impact on the market." — NRG Energy Gulf Coast Region President John Ragan
“People are all over the map on that question. The economics on new plants is really tough right now. What’s different about ERCOT is we have so little coal and natural gas really drives the prices here.” — Former Electric Reliability Council of Texas Chairman Mark Armentrout