Energy experts urge PUC to "tap the brakes" on rebuilding grid

AUSTIN, Texas - The electrical grid in Texas is built to provide cheap power while allowing power providers to increase prices during peak demand.

However, on Thursday the Public Utility Commission is expected to start a shift in purpose to providing reliability. When the process started in October, PUC Chairman Peter Lake admitted change will come with a cost.

"And so if we have to show the investor community that we're willing to pay higher prices in the short term, to incentives longer term dispatchable power that will give us the reliable power we need, we're willing to stomach that for a short, short, period of time," said Lake.

It's not known how much the rebuild will actually cost customers, and that's a problem for a panel of energy experts who held an online discussion Wednesday. "So, it's time to tap the breaks is what we are telling the commission," AARP Texas associate state director Tim Morstad said.

That pause, according to the panel, would give the PUC an opportunity to answer several questions, like: how much power generators will spend on winterization, how local utilities will pay outstanding debts for the power purchased during peak pricing periods last February, and how much will be passed on to customers. One estimate of a 3% increase generated a lot of doubt.

"Take these numbers to indicate we don’t know what the hell these costs are going to be, and that scares us, and it should scare you, and it should scare other Texans," said Alison Silverstein, a former Texas PUC and FERC senior advisor.

The PUC is not expected to make a final decision Thursday, but the drafting of rules could start. That process may include:

• re-working wholesale pricing
• requiring utilities to purchase blocks of electricity in advance of peak demand
• requiring back up power sources
• new charges on renewable energy classified as ancillary services

"Ancillary Services is kind of like a pacemaker, for the electric grid, and they are there as a backup service when the electric grid starts to experience some problems, maybe there is some reliability issues, a power plant trips offline or a frequency drops a little bit low, the ancillary services jump in to help resolve some of those problems," said Colin Meehan, a Texas-based energy consultant.

The panel also brought up a study that encouraged helping homeowners become more energy efficient.

"They use four times as much power, at 14 degrees Fahrenheit, than a house uses to be cooled in the Summer at 100 degrees. If we don’t solve that problem this problem doesn't get solved," said Doug Lewin, president of Stoic Energy, and LLC.

For the panel, a quick fix could have unintended consequences. "A complicated system fails in complicated ways and they owe it to the world's 9th largest economy to take a deep breath and start committing to serious, thoughtful extraordinarily integrative and comprehensive analysis to help understand where we go next," said Silverstein.

There is another mechanic involved in this grid rebuild, the Railroad Commission as they are expected to crunch rules next year for natural gas providers. That process, according to the panel, could re-enforce the actions by the PUC, but they could also undo what protections have been put in place.

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