San Antonio Texas’s city-owned energy utility, CPS Energy, has sued the Electric Reliability Council of Texas (ERCOT), charging that the grid operator during the February deep freeze charged it “excessive, illegitimate and illegal prices.” The utility filed the suit in Bexar County District Court.
CPS Energy CEO Paula Gold-Williams said, “During a state declared disaster, ERCOT ran up $20 billion in charges for 5 days of energy supply due to its lack of oversight, preparedness, and failure to follow its own protocols. That is a huge amount of money and it’s incredibly important we continue to fight for our customers to bring those bills down.”
CPS says that during the weather disaster, the Public Utility Commission of Texas “concluded that ERCOT made critical mistakes that resulted in erroneous electricity overcharges, and recommended the charges be reversed. The Independent Market Monitor also said ERCOT exceeded the mandate of the PUC by continuing to set high prices long after the load shed.”
CPS is the nation’s largest combined municipal electric and gas distribution utility, serving 860,000 electricity and 358,000 gas customers in the city and seven surrounding counties. The utility has $8 billion in annual revenues. It faces about $1 billion in charges from the spike in electricity and gas prices from the freeze.
Reuters reported that the freeze “left Texas utilities facing about $47 billion in one-time costs. Those costs have led to two bankruptcies and knocked two other electric providers off the state’s power grid because of payment defaults.” Fitch Ratings lowered the CPS debt ratings and “placed a negative outlook on CPS Energy’s long-term debt.”
–Kennedy Maize