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Fraser tells PUC to back off electricity market

By: James Osborne |

State Senator Troy Fraser is back on the offensive over the possible restructuring of Texas’s electricity market.

In a letter to Public Utility Commission Chairman Donna Nelson Wednesday, Fraser said the commission did not have the authority to restructure a market that was deregulated by the legislature a decade ago.

“Never was it intended for the PUC to possess the statutory authority to change the fundamental design of the market. It certainly was not envisioned the law would give the agency unprecedented power to do whatever they wanted under the pretext of ensuring ‘resource adequacy’”, the letter read.

With power prices low and companies not building, the PUC has been debating whether to create a so-called capacity market system in which power plants receive an additional payment for the power they have ready to go – not just the power they generate. And for a long time the commission was deadlocked on whether it made sense in light of what could be a $2.3 billion hike for Texas electricity customers.

But with the installation of Gov Rick Perry’s former chief of staff Brandy Marty this summer that equation seems to have shifted. Last month Marty sided with Nelson in support of creating a mandated level of electrical capacity, widely seen as a first step towards a capacity market.

See the complete text of Fraser’s letter here.