Editor’s Note: The following is the second in a three-part series by the Energy Alliance, a project of the Texas Business Coalition, examining how the Public Utility Commission of Texas has violated consumer choice and market forces in the Texas electric market. Yesterday’s post, Storm Uri: The PUCT’s $26 billion Electricity Tax.

On January 30, the Texas Supreme Court will hold a hearing to determine whether the Public Utility Commission of Texas (PUC) violated the Texas Legislature’s instructions that “electric services and their prices should be determined by customer choices and the normal forces of competition” when it arbitrarily set the price of electricity at $9,000 per megawatt hour during Winter Storm Uri. The Texas Third Court of Appeals has already determined the PUC’s action to be illegal.…

“This seems a little crazy. During these negative price periods, suppliers are paying ERCOT to take their power…. You could … build a giant toaster in West Texas and be paid by generators to operate it.”

Some 15 years ago, Michael Giberson at Knowledge Problem commented on a strange phenomenon–negative pricing by wind power, where operators with very low marginal costs (the wind is free) were paying takers per KWh to gain big tax credits, mostly federal.

Giberson’s analysis (reposted below) identified the malinvestment and ‘big anti-conservation incentive’. But he did not focus on what cumulatively would result from this distortion: a wounded Texas grid from chronic low prices/margins knocking out thermal generation. The unreliables–via government privilege– knocking out the reliables (what Bill Peacock would call predatory pricing).…

“The predictable but inevitable intermittency of renewable energy had created a grid emergency that would not exist on a grid that operated without renewables…. natural gas peaker plants would have handled the load at peak demand, the riskiest time for a normally functioning grid.”

“Governor Greg Abbot should declare an energy emergency and call the Texas Legislature into special session and keep them there until they eliminate all Texas subsidies for renewable energy and force renewable generators to pay for the costs they have imposed on Texas consumers.”

As many renewable advocates like to point out, solar often provides good performance during periods of high temperature. Leaving aside for the moment the performance of solar compared to installed capacity, at 5 p.m. solar came close to its expected output of 12,636 MW.…

Editor Note: This study by the Energy Alliance of the Texas Business Coalition is in two parts, with Part II tomorrow. MasterResource appreciates the opportunity for publication.

“Where only a few years ago modern natural gas peaker plants would have been called on to meet peak demand at 5:55 pm on September 6, unreliable solar generation is now filling much of that role.”

“The Texas grid almost failed because $29 billion of federal, state, and local subsidies over the last 18 years have left Texans relying on renewable energy sources that cannot generate electricity when it is most needed.”

When the Electric Reliability Council of Texas (ERCOT), the operator of most of the Texas electric grid, declared an Energy Emergency Alert 2 on September 6 for the first time since Winter Storm Uri, it exposed how renewable energy and renewable energy subsidies are rapidly undermining the reliability of the Texas electric grid.…