Debate on revamping Texas grid delayed

HOUSTON — Official debate on revamping the Texas grid to ensure future reliability won’t resume until the spring.

The Public Utility Commission of Texas agreed Thursday to postpone the discussions until mid-May, giving the three-member panel and its staff time to study reports on the economics of options under consideration.

The commissioners previously planned to discuss the issue  this month.

If they do take up the matter in May, it will be the next former step in a broader regulatory debate on whether Texas is preparing adequately for its electricity needs in future years, given its growing population and an industrial renaissance along the Gulf Coast.

At issue is whether the state should pay generators for building or maintaining power plants that would run only during peak demand–generating neither power nor revenue the rest of the time.

The state’s existing market, called energy only,  pays only  for power actually produced, although the price generators can charge for it soars as demand approaches capacity.

Many generating companies are pushing for the alternative approach, called a capacity market.

The state’s grid operator now tries to keep a generation capacity reserve at least 13.75 percent above demand. It’s only a target, and two of the utility commissioners have argued that it should be mandatory. That could be a step toward a capacity market, since some generators have argued that it wouldn’t be economic for them to  meet a mandatory reserve unless they can get capacity payments.

At a PUC meeting Thursday, Commissioner Ken Anderson cited a study he said indicates that Texas may be able to maintain the 13.75 percent margin through the end of the decade with existing and planned power plants. At past meetings, Anderson has said that he opposes mandatory reserves and a capacity market, both of which he believes will be costly for ratepayers.

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