The PUCT convened in an Emergency Open Meeting today to address the substantial increase in the Market Clearing Price for Energy (MCPE) in the Electric Reliability Council of Texas. The unforeseen and substantial increase in the MCPE has caused the rates charged by providers of last resort (POLR) to also increase substantially, as the energy charge in POLR rates are based on the MCPE. Consequently, this rise in POLR rates was also not reasonably foreseeable.
Chairman Smitherman commented that due to the price increases, other REPs may be in financial difficulty. He encouraged other REPs to work with these troubled REPs to take customers and that Commission staff stood ready to assist with rule interpretation issues, if needed. Parties (particularly the POLRs) needing rule clarifications should put their plans (how they want to charge customers) in writing and submit to staff (Lauren Damen and the Executive Director). He also encouraged the POLRs and their affiliates to offer other rates than the standard POLR rate which is allowed under Commission rules. He cautioned that POLRs not put customers on term products that charge cancellation fees. Chm. Smitherman also asked market participants to work together for the benefit of affected customers to ensure that wrongful disconnects and missed low income discounts were minimized.
Com. Parsley commented that whatever the market can do to prevent these customers landing on the high POLR rate is the end goal of the Commission.
Randy Chapman with Texas Legal Services Center commented that the Commission should consider re-evaluating many of the rules, including the REP financial standards and the POLR rules, to prevent further issues caused by escalating prices.
Finally, the PUCT is working with the Independent Market Monitor and ERCOT to evaluate the causes of the recent price spikes and take necessary actions to address.