FERC mentioned Monday it’s trying into whether or not members within the Texas wholesale pure gasoline and electrical energy markets engaged in market manipulation or different violations throughout the chilly snap that upended power markets final week.
If any potential wrongdoing may be addressed beneath the Federal Power Regulatory Fee’s statutory authority, commissioners “will pursue these issues as nonpublic investigations,” it mentioned.
The frigid temperatures precipitated prolonged energy outages that affected greater than 4 million prospects in Texas as electrical energy demand peaked at ranges usually seen solely in summer season.
Shortage of pure gasoline amid surging demand and plunging manufacturing due to wellhead freeze-offs throughout the South Central area knocked offline as much as 31 GW of gas-fired era capability in Texas throughout the chilly spell, in line with the Worldwide Power Company. Nuclear, coal and renewable turbines additionally skilled main outages.
FERC mentioned its preliminary examination will happen as a part of the Division of Analytics and Surveillance’s (DAS) ongoing surveillance of market conduct within the gasoline and energy markets.
DAS “makes use of market participant-level buying and selling information and information from the monetary markets to display day by day and month-to-month buying and selling on the majority of bodily and monetary pure gasoline buying and selling hubs in the US and the organized and bilateral wholesale electrical energy markets.
“DAS carefully identifies and scrutinizes any doubtlessly anticompetitive or manipulative manipulative conduct to find out if an investigation is suitable.”
[Is it important for your business to know what is happening in the North American natural gas market? NGI’s All News Access will make your job much easier — find our more here.]
Along with dropping energy for hours or days on finish, some ratepayers in Texas have been shocked in latest days to obtain astronomically excessive utility payments amid the disaster.
Nevertheless, the Public Utility Fee of Texas (PUCT) mentioned in a reality sheet on the winter storm that, “As a result of most residential electrical energy prospects are on fixed-price contracts with their energy suppliers, they aren’t uncovered to adjustments of their charges resulting from scarcity-driven adjustments within the wholesale value of electrical energy.”
The one residential prospects uncovered to wholesale costs are “the only a few seen lately within the information with extraordinarily excessive electrical energy payments having chosen a contract that’s listed to these costs.”
Sorting Out Monetary Fallout
PUCT on Sunday issued a sequence of emergency orders to guard electrical energy prospects whereas authorities kind out the monetary fallout of the winter climate occasion.
Measures included suspending till additional discover electrical energy disconnections for nonpayment, and persevering with a Covid-19 measure requiring utilities to supply deferred fee plans to prospects when requested.
PUCT additionally directed the Electrical Reliability Council of Texas (ERCOT) “to deviate from protocol deadlines and timing associated to settlements, collateral obligations, and bill funds (which may result in additional market instability) whereas leaders within the state take into account options to the monetary challenges attributable to the grid occasion.”
Regardless of its assurances, PUCT has nonetheless been accused of failing to adequately shield prospects from the value spike induced by the extreme chilly.
A submit by the cell app Griddy, which permits customers to watch wholesale energy costs in actual time, mentioned PUCT left emergency surge pricing for wholesale electrical energy in impact for days longer than essential, gouging purchasers of energy whereas permitting turbines to reap a windfall.
“We intend to combat this for, and alongside, our prospects for fairness and accountability — to disclose why such value will increase have been allowed to occur as thousands and thousands of Texans went with out energy,” the Griddy workforce mentioned.
The surge in pure gasoline demand in Texas and different states gripped by the chilly was a godsend for gasoline producers comparable to Haynesville Shale-focused Comstock Assets Inc., whose CEO Jay Allison mentioned that final week “was like hitting the jackpot at a few of these unbelievable costs.”
For different firms, it was the alternative.
Dallas-based gasoline distributor Atmos Power Corp. mentioned in a regulatory submitting that “unforeseeable and unprecedented market pricing for gasoline prices, most notably in our Colorado, Kansas and Texas jurisdictions,” resulted in mixture pure gasoline purchases throughout the chilly snap of about $2.5 billion to $3.5 billion for these jurisdictions. The corporate, in the meantime, had about $3 billion in whole liquidity as of Feb. 18.