Most Texans will have higher charges on their power bills for years to come to cover gas utilities', electric cooperatives' and electric companies' financial losses from the storm and prevent customers from having to pay huge bills in a short time, under plans approved by both the Texas House and Senate.
Lawmakers approved bills that would allow companies to seek billions of dollars in state-approved bonds backed by charges on customers’ bills to stabilize the state’s distressed energy market. The legislation now heads to Gov. Greg Abbott's desk.
After state electricity regulators set power prices at the maximum rate, $9,000 per megawatt-hour, and natural gas fuel prices spiked during the storm, many companies — especially natural gas utilities and rural electric cooperatives — were financially wrecked. Others owe massive debts to the Electric Reliability Council of Texas.
Lawmakers on Friday approved bills that would allow around $4.5 billion in ratepayer-backed bonds for natural gas utilities and another $2 billion in such bonds for electric cooperatives. Lawmakers on Sunday approved House Bill 4492, a bill that sought to allow electric companies, including retail electric providers, to finance up to $2.1 billion for electricity that companies paid for but never received during the storm, as well as additional charges from the high wholesale power prices. Another $800 million would be loaned to pay off debts to ERCOT.
HB 4492 will loan $800 million to ERCOT through the State's Economic Stabilization fund, known as the rainy day fund, to pay for debts to the grid operator. ERCOT acts as a transaction house for the electricity market, so when companies couldn't pay their debts after the storm, other companies got shorted for the electricity that they sold. ERCOT will pass on the cash to companies that are owed money. The state's rainy day fund ended 2020 with a balance of nearly $10 billion.
The Senate, which has pushed hard for a financial remedy to the infamous 32-hour period during the week of the storm when regulators kept wholesale power prices at the $9,000 cap after more electric generation came online, passed HB 4492 Sunday night about five minutes before the midnight deadline. Multiple senators complained that the House removed provisions to provide direct credits to consumers and left little time to negotiate.
"The Texas Senate made it very clear that we wanted to have some direct relief to ratepayers, and that was stripped out by the House of Representatives," said Roland Gutierrez, D-San Antonio. "Last night we were told to accept what they had sent us — or else."
Lt. Gov. Dan Patrick indicated that he did not want to pass HB 4492 because it did not include direct relief to ratepayers, but allowed the Senate to do so in order to resolve ERCOT's liquidity crisis. He urged lawmakers to take up direct credits for consumers during a prospective summer session.
"If we're going to spend billions of dollars concerning the storm, it's going to be to help the people of Texas and the ratepayers, or I won't call that bill up," Patrick said.