Thread by @douglewinenergy

I'll tweet this morning on the Tx House State Affairs hearing starting now. You can watch here:
house.texas.gov/video-audio/ #txlege #txenergy

Also US Senate Energy Cmte has a hearing at 9CT on enegy resiliency, esp interested to hear @patwood3 energy.senate.gov/hearings/2021/…

#TexasBlackout

They'll hear from @PUCTX Chair D'Andrea and undoubtedly have lots of questions about the $16b in charges to customer facing retailers, munis, and co-ops Feb. 18-19 that have been the source of much contention lately. Great coverage by @James_Barragan here: dallasnews.com/news/politics/…

They're taking up bills first. List is here: capitol.texas.gov/tlodocs/87R/sc…

Now Chairman D'Andrea is before the committee. Starts by saying he's here to talk about re-pricing, a very difficult issue.

house.texas.gov/video-audio/br…

Says he's flip-flopped several times on this issue. He's there to be a resource.

says re-pricing does not help or hurt consumers except for one group, and he'll talk about that.

Thinks the @PUCTX could not re-price but the #txlege could.

#txenergy #TexasBlackout

Chairman @chrispaddie asks D'Andrea to explain the $16b.

D'Andrea says it's not a real number, says the Independent Market Monitor (IMM) who first floated the number acknowledged it's theoretical. He says the IMM revised their number and said it's actually $2-3b.

The IMM is the market watchdog tasked with ensuring there is no market manipulation at @ERCOT_ISO. It is a firm called Potomac Economics.

If you re-price, you take the money from generators and give it retail electric companies and their banks. The REPs will not turn around and give that $ to their companies "it will not flow to their customers."

D'Andrea says without re-pricing REPs can add the debt they owe the banks but they'll have to do so slowly or not at all because of how robust competition is.

Comment: note that 75% of the market, higher now, is owned by two companies.
houstonchronicle.com/business/energ…

D'Andrea: The people of Texas own a lot of generation. Austin, San Antonio, Denton (municipal utilities) have generation. And also co-ops. So when you say you're taking away from the generators, you could be taking from co-ops and munis and raising costs for their customers.

If you do re-price, you'll take pressure off of Rayburn Co-op and retail electric providers. And you'll take money from private generators who are some of "the least popular people around other than ERCOT and the PUCT."

D'Andrea says it's incredibly complicated but public power is key. Keep your eyes on them. Says that one of the things Lt Gov Patrick proposed would bankrupt @LCRA. Testifies LCRA told him this.

#txlege #TexasBlackout

@chrispaddie Asked D'Andrea if the charges were a mistake. Says no, it was not a "mistake." That's a different thing than saying we don't like the result of the process agreed to before. Government can't change the rules afterward.

#txlege

Paddie says can we change the rules of the game after the game has been played.

@chrispaddie asks: If we wanted to do this repricing, could we? how would we even do this?

#txenergy #txlege

Either way, D'Andrea says @PUCTX, whatever we do, whatever #txlege does, we'll get sued.

PUC will lose if it reprices. #TXLege does it, it might be a close call in the courts

#TexasBlackout

Brings up the ICE problem. Not the ICE during the storm but the commodities trading platform. That futures market has settled already, PUCT Chair D'Andrea testifies. That money has been distributed internationally so if we reprice, lots of dominos fall #txlege

D'Andrea says one result would be that the international markets could lose confidence in #Texas.

Testifies that @DallasFed is worried about this, many others are, too.

#txlege

@PUCTX Chair says there is absolutely no way to claw back money that has changed hands on ICE

For those curious, here's the ICE website theice.com/index

Rep. Raymond says to @PUCT Chair D'Andrea, to paraphrase (as with all these tweets) if you can't figure out how to re-price, the Governor may need to appoint someone who can.

#txlege #TexasBlackout

Chairman of the State Affairs Committee @chrispaddie says he expects to have the Independent Market Monitor Potomac Economics and @DallasFed in front of the committee next week.

#txlege #txenergy #TexasBlackout

@RepRaymondTX invokes Comtock CFO's now infamous quote on Feb. 17 that they "hit the jackpot." Says ratepayers will have to pay for this.

(Part of what is so hard about this is it's very difficult for everyone, me included, to understand how gas and electric markets interact.)

@RepRaymondTX says there is such a thing as price gouging. Says he'd like to have @TXAG testify next week, too.

Raymond says he's with the Senate and LtG Patrick on this. Thinks he's with the Gov but not sure where the Gov's at.

Repricing needs to happen.

#txlege #txenergy

Raymond continues asking PUCT Chair D'Andrea to dumb it down, make it simple.

If someone got rich while someone was dying, that's not OK. If we messed up, we need to be clear that you can't milk the system while people are suffering. "That is stealing."

#txlege

@RepRaymondTX You've got to help us figure this out. The longer we wait, the harder it will become. You're complicating things bringing in ag futures and Wall Street. It's not as complicated in my mind. You overbilled.

@RepRaymondTX This is about people, not companies. They suffered "and now we're going to screw em for a few more billion dollars."

@PUCTX Chair D'Andrea says "If you re-price, South Texas Electric Co-op will get slammed. They are panicked that you will reprice." Says you should talk to them. "They will be much worse off if you reprice. They will take a loan and pay it off over a decade."

#txlege

@RepRaymondTX suggest D'Andrea stay as Commissioner but Abbott a point a Chair "who can handle this."

#txlege #TexasBlackout

Apropos of nothing, I want to buy an audiobook, any audiobook, narrated by @toddahunter What a voice.

#txlege

@toddahunter starts by saying @PUCTX has communicated with him.

Asks if Chair D'Andrea agrees or disagrees with the letter signed by 28 Senators.

D'Andrea says he disagrees.

this is the letter: wsj.com/articles/texas…

@toddahunter says this is the session of acronyms. Says @LCRA Lower Colorado River Authority will get hammered if repriced. Asks what is their territory?

Here it is maps.lcra.org/default.aspx?M…

Note: LCRA does not serve customers. They are a G&T, generation and transmission utility

They talk about other Genration &Transmission utilities: Brazos, STEC, and Golden Spread. STEC and Golden Spread and LCRA would be harmed by repricing. Brazos would benefit.

@toddahunter wants the @PUCTX to put the consumer first. Implores them to emphasize public.

#txlege

This might be a good time to suggest the #txlege fund a @PUCTX Office of Public Engagement. And for other energy agencies too. Too many acronyms and technocratic speak, not enought translation for the public to understand these issues that impact them tremendously. #TexasBlackout

@PhilKingTX commends bringing in Brad Jones to be the PUC's guy at @ERCOT_ISO.

My note: Brad is very smart and will bring a ton of expertise into this situation. Used to run @newyorkISO after working @LuminantPower for many years.

#txlege

@PhilKingTX corrects the record says Phil Wilson, head of @lcra says repricing the $9000 will not hurt them but repricing ancillary services will hurt them badly.

Very interesting tidbit because repricing ancillary services, though not easy, is easier than the $9000.

Speaking of Brazos, D'Andrea says it may not have been their fault becuase gas did not arrive at their plants but they were not hedged and had to buy all the power they used at $9000MWh so that's why they declared bankruptcy.

#txlege #txenergy

@PhilKingTX is worried about the ability of the PUCT to meet with only one commissioner, could there be a lawsuit invalidating your actions?

Note: the statute clearly allows one commissioner to act. Still, a good question to ask and make sur is fully understood.

@EddieLucioIII says he's served by @MagicValleyEC. (They are one of the 8 co-ops in South Texas Electric Co-op).

He's trying to understand how re-pricing would hurt STEC and their member co-ops.

Asks is it that their cost of gas was so high?

That's right. "It's a gas problem"

@EddieLucioIII says "So let's narrow the re-pricing to the price of gas."

(Now we're gettings somewhere!! This is the problem!! Gas was selling for 200x the cost earlier the same month!)

#txlege #txenergy

@EddieLucioIII also says we need to get your some more resources to get some experts.

(Again, YES!! Texas @puctx budget $16m. Utah $25m. 1/10 the people, 50% more budget. the PUCTX can't do it's job. As I said here, it's massively underresourced.)

keranews.org/news/2021-02-2…

@DonnaHowardTX gets into the mechanics of how pricing worked, or didn't, during the blackout. Chairman D'Andrea talks about how industrials shut down so power could flow to residences. Notes that industrials would have come back on Feb18-19 if prices had come down.

#txlege

@DonnaHowardTX: We need to look at what the rules actually say, because markets need rules and predictable. This needs to be clarified. There are winners and losers no matter what we do. This is complicated. We need to understand fully all the interconnected parts.

@puctx Chair D'Andrea says he called @ERCOT_ISO CEO Magness on Thursday Feb 18 and said why are we still at $9000 when residential load shed ended and he brought up the industrial piece which D'Andrea says he didn't think of.

#txenergy #txlege

D'Andrea says, Let's just stick with the status quo (I think he means by not repricing) and help those who were hurt. Then we can make sure it will never happen again.

Howard says I keep hearing "we didn't know" and "we didn't think of that." (cont.)

@DonnaHowardTX: "We've got to anticipate and plan for these events which will happen more frequently now."

Amen.

#txlege #txenergy

@AnaHdzTx asks has repricing been done before? Chair D'Andrea says yes. She asks why can't you do it now.

He explains that if ERCOT makes a mistake, (e.g. pushes the wrong button), we can reprice.

I don't have authority if it's "just something we don't like."

@AnaHdzTx you don't think this was an @ERCOT_ISO mistake?

D'Andrea: No I don't, we lost half our gas fleet. Our just in time market didn't work. "We never imagined we would lose half the fleet.We never thought the market would be stressed to that extent."

#txlege #TexasBlackout

Rep. Deshotel says was this caused by gas prices rising. Why did they rise?

D'Andrea "It's either market forces or greed. I have the same question." They would say it was market force but "that price was really high."

AGAIN, THIS IS KEY TO UNDERSTANDING #TEXASBLACKOUTS #txlege

D'Andrea: I can't touch the gas market, I can only do electricity

"If i could reprice gas I could fix this" Bingo.

Q: But what is it called when a corner store charges a lot for gas during a Hurricane?

A: "Price gouging" I look forward to them explaining that to the @TXAG

Rep. Deshotel: Will we hear from them here in this committee?

@chrispaddie: We don't regulate oil and gas, that's @GoldmanCraig's committee.

(Here's a major problem, folks. These systems are completely dependent on each other, and completely separately overseen.)

#txlege

Rep Deshotel: "Then we're looking at the wrong thing."

D'Andrea: "I agree. Right now you're looking at my box and I think you should look at their box."

Deshotel: Maybe you're taking heat over something you had no control over.

(Yes, yes, YES!!!)

texasmonthly.com/politics/texas…

@chrispaddie says repricing like the Senate is asking wouldn't do anything about gas prices

(That is true.)

#txlege

I've got to get onto other things. If anyone else is live tweeting, please @ me so I can RT.

End.