One thing that quietly hit the local news today. TX Public Utility Commissioners are raising the electric power price cap by 50%. From $3000 per Megawatt-hour (MWh) to $4500 MWh. There is talk that this price increase is in preparation for increases later in the year to potentially $7000 or $9000 MWh.
The commissioners have said the idea behind the rate increase it to spur investment by electric companies in new electric plants by allowing rate increases for wholesale power to make sure there is enough supply in the future.
The idea is flawed: The cap normally comes into play when the markets are nearing or are at peak demand, otherwise power is at a MUCH lower cost. Typically around $350 a MWh from some cursory nosing around the web, with some periods demand as low as around $100 a MWh.
The higher prices hit when the market is tight. The higher cap will benefit energy producers in a tighter market. I am not optimistic, and expect this to lead to energy manipulation ala Enron and California all over again. The one question that I do have: Will electric manipulation will start right away as the new rates are rolled out, or if it will wait until even higher rates are approved later in the year. I really do hope I am wrong.
A final aside: The story was never well covered. It sounds like boring committee reporting, but I've found little information online and in the local news prior to the meeting, and it received less than 30 seconds on the local news tonight when the decision was announced.
EDIT: Forgot linkage to story. Reuters Story