Power rate hike rebate during winter storms possible, court ruling reveals

AUSTIN, Texas - When the temperatures dropped during Winter Storm Uri in 2021, prices for electricity went up. 

The bills that followed provided a shock that energy analysts like Ed Hirs, a University of Houston energy fellow, described as unnecessary and unfair.

"Keep in mind that it's not just City of Austin, CPS in San Antonio, Lumina. It's everybody. You know, Joint Base Sam Houston was tagged with a bill that week that was large enough to pay for four M1 Abrams tanks with fuel, with ammunition. I mean, this reached across everyone in the state and it was wrong. It was totally wrong," said Hirs.

The price spike was part of an emergency order to get more power generators online by allowing them to charge the maximum amount. It was done to prevent the state power grid from collapsing. 

The trigger policy is essentially a failsafe button authorized by the Public Utility Commission, and managed by ERCOT. But in 2021, in Hirs' opinion, that action was as useful as pumps on the Titanic.

"I could have set the price at $1 million a megawatt hour and there was no available generation to come in," said Hirs.

Austin Energy customers will remember how the utility did a rate adjustment back in November. It was done to address the increase the utility was paying, to make and to distribute electricity onto the ERCOT market. 

An example of that hit was the payment Austin Energy was expecting from Brazos Electric Cooperative for power. BEC has filed for bankruptcy protection and is reportedly making payments on a fraction of the multi-million dollar bill that Austin customers are having to make up for.

"Austin Energy is closely monitoring the case as it works its way through the legal system. As a municipal utility, we will continue to work on behalf of our customers and community to keep electric rates among the lowest in Texas," said AE Spokesperson Matt Mitchell in a statement sent to FOX 7.

Last week, a Texas Court of Appeals judge issued a ruling also critical of the PUC action. Doug Lewin, President of Stoic Energy, spoke to FOX 7 about the judge's ruling.

"He's (the Judge) basically saying the action you took, made it not a competitive market, you made it a regulated market, you overstepped the bounds of your authority," said Lewin.

The ruling keeps alive the possibility of a rate hike rollback, but with appeals expected all the way to the state Supreme Court expected. Lewin warns the details remain vague and convoluted. He favors a pay-out to help people make their homes more energy efficient and also to help those who have trouble paying their bills.

"Whether it's good news or bad news, very much depends on who you are and who your electric company is. And again, it is very difficult to unravel who this is good and who this is bad. One thing I will say that I think is an unequivocal good here is that this is very much a shot across the bow for the PUC, but also for other agencies," said Lewin.

Hirs also warns, a future refund probably won’t be very big.

"I'd expect if they come at all, they're going to come as a credit on the bill. Unwinding these transactions, it certainly can be done. There are plenty of accounting records. Everybody knows where the money went. The issue is, you know, how many bankruptcies are we going to have to parse through to get this done and done correctly," said Hirs.

Officials with the PUC declined to comment about the court ruling because the case remains unresolved.