Some on Wall Street Profited off Texas Blackouts. In a Private Call, a Top Regulator Pledged He Would Try to Protect Their Windfall.

News

Mar 16

Texas Monthly, by Loren Steffy, 3/16/2021

Public Utility Commission chairman Arthur D’Andrea apologized to Bank of America last week for the “uncertainty” around its profits.

While many Texans last week were worried about sky-high electric bills from February’s winter storms, the state’s sole utility commissioner was privately reassuring out-of-state investors who profited from the crisis that he was working to keep their windfall safe.

Texas Monthly has obtained a recording of a 48-minute call on March 9 that Texas Public Utility Commission chairman Arthur D’Andrea held with analysts and market researchers for Bank of America Securities. During that call, which was closed to the public and news media, D’Andrea took pains to ease investors’ concerns that electricity trades, transacted at the highest prices the market allows, might be reversed, potentially costing trading firms and publicly traded generating companies millions of dollars.

“I apologize for the uncertainty,” D’Andrea said, promising to put “the weight of the commission” behind efforts to keep billions of dollars from being returned to utilities that were forced—thanks to decisions by the PUC—to buy power at sky-high prices, even after the worst of the blackout had passed.

Billed as “Learning the Texas Two Step: A Chat with the PUCT,” the call originally was scheduled for early February but was postponed until after the winter storm. The conversation shows a coziness between a top Texas regulator and some of the biggest players in the electricity market at a time when the PUC’s oversight is under fire from lawmakers. At one point, during a discussion about whether natural gas, which also saw huge price spikes during the crisis, would be “repriced,” D’Andrea said no, adding that most legislators understand that gas is priced by global markets and is out of their purview. “But I’ll let you know if I hear anything crazy on it,” D’Andrea said.

For more:, as well as an audio recording of the call:

https://www.texasmonthly.com/news/wall-street-profited-off-texas-blackouts/