A reliable and low cost grid is closer than you think

The ERCOT energy only market is—to borrow Churchill’s comment about democracy—the worst form of an energy market, except for all the others. Texans expect their leaders to make changes to protect them and their property from future extreme weather events. Unfortunately, too many state leaders have fallen under the spell of capacity market solutions — most peddled by large power generation companies — that would waste billions of consumers’ dollars for little or no reliability benefit. 

The Public Utility Commission of Texas (PUCT) has already endorsed a version of a capacity market, albeit a wholly untried and unproven one with an eye-glazing name: Performance Credit Mechanism, or PCM. It sounds meritocratic, but it isn’t: the PCM’s distinguishing characteristic is that it would pay generators if they are available at certain times, not necessarily if they actually perform when needed.