It's worse than that, at the peak of the crisis not only were the capped at $9k/MWh, they were also floored at that price. As in, prices were administratively set to be $9k for a few days. ERCOT can just set prices to whatever they like, and their regulator (the PUCT) directed them to set it to $9k.
It's...not entirely obvious to me that was a good choice. Or even that it was a better outcome than what a deregulated market in wholesale electricity might have done, although we'll never know, since Texas doesn't have one. :)
> The PUC met Feb. 15 to address the pricing issue and decided to order ERCOT to set prices administratively at the $9,000/MWh systemwide offer cap during the emergency.
> "At various times today (Feb. 15), energy prices across the system have been as low as approximately $1,200[/MWh]," the order states. "The Commission believes this outcome is inconsistent with the fundamental design of the ERCOT market. Energy prices should reflect scarcity of the supply. If customer load is being shed, scarcity is at its maximum, and the market price for the energy needed to serve that load should also be at its highest."
Interesting logic. I suppose the idea is that if there's any shortage at all, then it must be because generators don't have enough money, so government should mandate that money be transferred from, in this case, coops like Brazos to the generating companies who failed to weatherise their plants?
Nice for the generators, rough on the people forced to buy power at those prices.
It's...not entirely obvious to me that was a good choice. Or even that it was a better outcome than what a deregulated market in wholesale electricity might have done, although we'll never know, since Texas doesn't have one. :)
> The PUC met Feb. 15 to address the pricing issue and decided to order ERCOT to set prices administratively at the $9,000/MWh systemwide offer cap during the emergency.
> "At various times today (Feb. 15), energy prices across the system have been as low as approximately $1,200[/MWh]," the order states. "The Commission believes this outcome is inconsistent with the fundamental design of the ERCOT market. Energy prices should reflect scarcity of the supply. If customer load is being shed, scarcity is at its maximum, and the market price for the energy needed to serve that load should also be at its highest."
(Source: https://www.spglobal.com/platts/en/market-insights/latest-ne...)
Interesting logic. I suppose the idea is that if there's any shortage at all, then it must be because generators don't have enough money, so government should mandate that money be transferred from, in this case, coops like Brazos to the generating companies who failed to weatherise their plants?
Nice for the generators, rough on the people forced to buy power at those prices.