State Increases Cap on Electric Rates
If you’re looking forward to the cold front this weekend, chances are your electric bill is, too. But new rules could mean higher power bills for many Texans even when things cool down.
The Public Utility Commission of Texas, which oversees electric utilities in the state, voted today to raise the limit on how much power providers can charge. That price, known as the offer cap, happens when the grid gets stretched to capacity. It’s essentially the maximum amount companies can charge for wholesale power.
Today, the commission tripled the cap from its original level. The hope is that higher profits for generators will result in new power plants.
The Texas grid is predicted to fall below its target level of power reserves in a few years. And with low profits for power plants right now, new plants just aren’t being built in Texas’ private, energy-only market.
It isn’t clear what kind of effect the higher wholesale prices could have on residential customers. Some consumer and trade groups are opposed to the change.