Electric Generating Companies Want to Raise Prices

The fossil fuel and nuclear generating companies are asking the Texas Public Utility Commission to approve rate hikes. Houston Chronicle

"The Public Utility Commission could raise electricity bills by $4 billion in the coming weeks if members acquiesce to demands from generators who insist power in Texas is too cheap.

Generators say that if the commissioners do not shift the so-called Operating Demand Response Curve to guarantee higher revenues, they will not build new power plants."

Georgetown city officials would say that this would not affect Georgetown residents because the city has fixed price contracts for 20 and 25 years.

But, connect the dots. If there is insufficient generating capacity on the ERCOT network, then there will be brownouts or outages that will have to be managed and that will surely impact Georgetown consumers in some unforeseen way.

The impact that subsidized renewable energy is having on the broader market is clear. The renewable energy contracts require that ERCOT take all the electricity that the renewable generators provide first drives down the market price when there is a surplus of electricity. Also, the renewable energy generators can reduce their electricity price below cost because they are subsidized. This drives the fossil fuel and nuclear generators out of business.

Because of the low subsidized prices set by renewable energy generators, the other generators cannot afford to build new generating plants. That is why they are asking for rate increases.

It is only a matter of time before Georgetown consumers are affected. When demand in Georgetown exceeds that available through the existing contracts, Georgetown will have to purchase on the spot market. Those prices tend to be highest during periods of high demand.