Don’t California my Texas (electricity market)

Public Utility Commission of Texas meetings are typically staid affairs. On December 2, 2021, the PUC of Texas held one that was anything but. The Commissioners came down from the dais and sat around a squared horseshoe of conference tables, next to or facing each other. 

It was an internal discussion for the world to see. 

And it was tense.

Nine months after the catastrophic grid failure that cost hundreds of lives and shut down the state for days, the commissioners met to talk about the future of the Texas electricity market. There were four commissioners at the time, and the proposal pushed by Chairman Peter Lake — known, suspiciously banal-sounding, as the Load Serving Entity Obligation, or LSEO (more on that later) — was clearly unpopular among the other three. 

Commissioner Jimmy Glotfelty said he was “wary” of the LSEO, saying it would likely force some retailers out of the market and undo the competitive system set up by the Legislature a generation ago. 

Commissioner Will McAdams said the LSEO would cost too much, pointing to the wealth of data showing that very effect in other markets. 

Commissioner Lori Cobos also started to voice “deep concerns” about the LSEO, at which point the Chairman cut her off and snapped: “You have concerns about everything” (45:55 here). 

Like I said, it was tense.

The one point of agreement: the LSEO needed a detailed analysis. Last week, it finally got one…