Gavel To Gavel 87th Legislative Session: March 19, 2021
Following last week’s testimony from then-Public Utility Commission (PUC) Chair Arthur D’Andrea that any action to retroactively change the price of wholesale electricity must come from the Legislature, the Texas State Senate filed and passed SB 2142 within a day. As introduced, the bill would reset electricity prices to pre-storm market levels for the period beginning 11:55 p.m. on February 17th and ending 9 a.m. on February 19th. SB 2142 has been sent to the House and referred to the Committee on State Affairs, but no companion legislation has been filed.
Lt. Gov. Dan Patrick has urged the House to move the bill as quickly as possible, referencing an opinion from Texas Attorney General Ken Paxton that the PUC has the jurisdiction and authority to reprice, as well as the closing window for settling or contesting ERCOT contracts.
Both legislative chambers have indicated that any action on their part will have unintended consequences. However, they appear to diverge on which strategic approach will yield the most whole-making results for the state relative to the damage caused by the storm. The House has relied on a more deliberative process from the beginning, and their reluctance to quickly advance SB 2142 seems influenced in part by testimony from Chris Edmonds, global head of Intercontinental Exchange (ICE)—the clearinghouse that manages futures and options on the ERCOT wholesale electric market.
During a meeting of the House State Affairs Committee, Edmonds stated that “Retroactively modifying prices is not the way to resolve the issues from February… Making a decision to reset the rules after the fact with have profound and detrimental consequences for economic activity within Texas.” Members floated alternative solutions such as securitizing debts incurred by the storm or utilizing a windfall tax to tax entities that generated excess profits through the emergency price hikes. The Lt. Governor has again sought direct intervention from the Governor, stating during a press conference that he should use his emergency powers to reprice the electricity charges. Gov. Greg Abbott has yet to respond.
On Tuesday, Gov. Abbott requested and received the resignation of Comm. Arthur D’Andrea. The Governor has stated that he will appoint a replacement “within the coming days” but we have no more specifics at this time.
In other news, the Department of State Health Services (DSHS) announced Texas will receive more than 900,000 first doses of COVID-19 vaccine for Week 15 of vaccine distribution. DSHS will allocate 685,470 doses to at least 481 providers in 183 counties. The federal government is expected to distribute more than 230,000 additional first doses to pharmacy locations and federally qualified health centers.