Texas Court Overturns Power Price Rulings From 2021 Freeze
By Naureen S Malik @naurtorious via Bloomberg.com
March 17, 2023 at 1:52 PM CDT Updated on March 17, 2023 at 2:12 PM CDT
A Texas appeals court reversed a decision by regulators to keep electricity prices elevated at the maximum level allowed during a deadly February 2021 freeze in a big win for generators including Vistra Corp.
The court said the Public Utility Commission of Texas exceeded its authority by keeping prices set at the $9,000 per megawatt price cap during the storm as the cost of electricity spiked because too many plants couldn’t operate.
“The commission here exceeded the legislature’s limits on its power,” the court wrote.
The decision has far-reaching implications. Some of the state’s biggest power generators whose plants froze up during the storm were forced to buy electricity at exorbitant prices to meet contractual obligations. The ruling could open the door for them to claw back some of that money, potentially prompting the reallocation of billions of dollars and introducing uncertainly for power traders and others more than two years after the storm.
The Public Utility Commission of Texas declined to comment on the ruling.
Shares of Texas’s biggest power-plant operators rose on the news, trimming earlier losses. Vistra Energy was down 2.3% at 3 p.m. in New York after earlier being down as much as 4.4%. NRG Energy Inc. was down 1.2% after earlier falling 1.7%.
— With assistance by Madlin Mekelburg
(Updates with shares in final paragraph.)