Texas PUC Adopts New Rules for Energy Emergencies

HOUSTON (PGU) — The Texas Public Utility Commission (PUC) approved new rules to cap electricity rates and work more closely with natural gas regulators to improve management of energy emergencies such as last winter's February freeze.

The PUC described its actions as part of a joint effort with the Railroad Commission of Texas (RRC) to increase the coordination between the electric and gas industries during emergencies.

Based on Texas legislation, the new PUC rule creates a designation for critical natural gas facilities that supply the majority of natural gas in Texas. It requires that a critical natural gas facility provide information to the utility from which it receives electric delivery service. The electric utility must use this information to prioritize natural gas in energy emergencies.

The PUC rule and corresponding RRC rule will be in effect this winter.

“This rule is one of the many major steps the PUC has taken to ensure the Texas power grid will be more resilient this winter than last. These requirements represent a fundamental change in the relationship between the natural gas industry and the electric generation industry,” said PUC Chairman Peter Lake.

“For the first time ever,” Lake said, “the electric transmission and distribution utilities will know the locations of the facilities which are critical to keeping natural gas flowing to the power plants that keep our lights on.”

During the February winter storms, the megawatt per hour price rose to $9,000.  PUC commissions lowered the maximum amount price consumers may pay for power to $5,000 per megawatt hour.  Those extreme rates compare with a Texas average price in 2020 of $22 per megawatt hour, with lower rates during the winter, according to Austin ABC affiliate KVUE-TV,

The PUC said its new rules complement work being done to map the supply chain between the natural gas and electric industries.

"Natural gas facilities have already registered critical status with their electric delivery utility in much greater numbers than last winter," the PUC said in a news release.  "Now electric utilities can plan and respond much more accurately to keep natural gas facilities energized during an emergency.

With this rule, the PUC said, it has "yet another tool to increase the resiliency of the electric grid."

The PUC's new rules are among a number of state and federal actions taken to prevent future power disruptions such as were caused by February's Winter Storm Uri. The storm killed more than 100 people and left 4.5 million Texas homes and businesses without power and heat – over a period of several days for many.

The Electric Reliability Council of Texas (ERCOT), which operates most of the state's power grid, ordered rolling blackouts to prevent the grid from collapsing as extreme cold shut power plants and froze gas pipelines.

Electricity prices hit record highs in some parts of Texas during Uri, costing billions of dollars and leaving some utilities and their consumers with bills that must be paid back over a period of years.

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