Showing posts with label Texas Legislature. Show all posts
Showing posts with label Texas Legislature. Show all posts

Tuesday, December 1, 2009

ERCOT faces "special purpose review" in 2010

ERCOT, for the first time in its nearly 40-year history, faces review by the Sunset Advisory Commission. Consumer groups, industry representatives and other stakeholders are expected to provide input for the review, which will then become the basis of legislation that could lead to dramatic changes for the organization.
Created in 1977, the Sunset Advisory Commission is a legislative body charged with reducing waste in state government by assessing the continued effectiveness and necessity of agencies. It is made up of five members appointed by the speaker of the Texas House of Representatives and five members appointed by the lieutenant governor, who presides over the Senate. The chair of the Sunset Advisory Commission is state Sen. Glen Hegar, Jr., of Katy.

ERCOT has already submitted a self-evaluation report to the Sunset Commission staff, which is expected to issue its preliminary findings in mid-April. The public will then get a chance to comment on those findings during a public hearing in May, and the Commission will amend the report and take a final vote in July. This final report (which will include changes ordered by the Sunset Advisory Commission) will form the basis of legislation that is expected to be filed for the 82nd Texas Legislature that convenes in January, 2011.

That the Sunset Advisory Commission is even reviewing ERCOT is unusual. Traditionally the Sunset Commission evaluates only state agencies, such as the Public Utility Commission — and not quasi-governmental non-profit corporations, such as ERCOT. But state Rep. Burt Solomons, chair of the House State Affairs Committee, pushed to include the ERCOT review in legislation adopted during a brief special session in 2009. Solomons had expressed displeasure with some of ERCOT’s spending practices — specifically citing the over-budget nodal transition — and also said that conducting a Sunset-style review in 2010 made sense, given that the PUC and the Office of Public Utility Counsel also were undergoing the Sunset process.

Typically, state agencies come up for Sunset review once every 12 years and agencies under such review are automatically abolished unless the Texas Legislature adopts legislation to continue them. But because ERCOT is not a state agency, lawmakers will not need to pass a new bill to maintain its existence. Another distinction between the ERCOT “special purpose review” and more typical Sunset reviews is that the cost of the ERCOT evaluation will be paid for by ERCOT itself — and therefore passed onto electric ratepayers. With other Sunset evaluations the cost is paid by tax dollars.

Besides Chairman Hegar, the other lieutenant governor appointees to the Commission include Sen. Juan “Chuy” Hinojosa of McAllen, Sen. Joan Huffman of Lake Jackson, Sen. Robert Nichols of Jacksonville, Sen. John Whitmire of Houston and public member Charles McMahen. Sens. Huffman, Nichols and Whitmire and public member McMahen were newly appointed by Lt. Gov. David Dewhurst in October. On Nov. 9 House Speaker Joe Straus appointed Rep. Dennis Bonnen of Angleton to serve as vice chairman for the Commission. He also appointed as new members Rep. Rafael Anchia of Dallas, Rep. Bryon Cook of Corsicana, and public member Lamont Jefferson. House members serving existing terms are Reps. Linda Harper-Brown of Irving and Carl Isett of Lubbock.

-- R.A. Dyer

Friday, May 22, 2009

Dallas Morning News: Adopt CSSB 1772

The “last, best hope” for those who care about electricity prices. That’s how The Dallas Morning News described Senate Bill 1772 in an editorial May 22. The newspaper urged House lawmakers to quickly take up the bill and vote it out before time runs out on the 81st Texas Legislature.

“A chance remains to discourage market manipulation by passing CSSB 1772,” the newspaper opined. “The proposal comes just months after a Public Utility Commission decision to let the company formerly known as TXU off relatively easy for manipulating the wholesale power market. The legislation would take a tougher approach and would allow the PUC to order that refunds be given to affected parties.”

In late 2008 Luminant – formerly TXU – paid a $15 million penalty for alleged abuses in the wholesale market. The PUC had originally recommended penalties of more than $200 million, and the PUC’s own investigation found evidence that the company had profited by nearly $20 million.

Regulators also found that the company’s improper actions had cost market players at least $57 million, although the PUC said it was powerless to order refunds. CSSB 1772 would specify the PUC can order refunds in such cases, and thereby add another disincentive against improper market manipulation. The bill was recently voted out of the House State Affairs committee and awaits action by the full House.

The session ends June 1.

-- R.A. Dyer