{"id":40383,"date":"2015-08-05T12:06:14","date_gmt":"2015-08-05T17:06:14","guid":{"rendered":"http:\/\/stateimpact.npr.org\/texas\/?p=40383"},"modified":"2015-08-05T12:06:14","modified_gmt":"2015-08-05T17:06:14","slug":"will-state-correct-a-big-mistake-in-what-texans-paid-for-electricity","status":"publish","type":"post","link":"https:\/\/stateimpact.npr.org\/texas\/2015\/08\/05\/will-state-correct-a-big-mistake-in-what-texans-paid-for-electricity\/","title":{"rendered":"Will State Correct A Big Mistake In What Texans Paid For Electricity?"},"content":{"rendered":"<div id=\"attachment_16009\"  class=\"wp-caption module image right\" style=\"max-width: 300px;\"><img decoding=\"async\" loading=\"lazy\" class=\"size-medium wp-image-16009\" alt=\"ERCOT is asking Texans to conserve power until noon Friday. \" src=\"https:\/\/stateimpact.npr.org\/texas\/files\/2012\/08\/76412145-300x204.jpg\" width=\"300\" height=\"204\" srcset=\"https:\/\/stateimpact.npr.org\/texas\/files\/2012\/08\/76412145-300x204.jpg 300w, https:\/\/stateimpact.npr.org\/texas\/files\/2012\/08\/76412145.jpg 594w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><p class=\"wp-media-credit\">Photo by Justin Sullivan\/Getty Images<\/p><p class=\"wp-caption-text\">ERCOT is asking Texans to conserve power until noon Friday.<\/p><\/div>\n<p>We first reported in June about some so-called &#8220;fake profits&#8221; in the Texas energy industry that led to a multi-million dollar windfall for some companies. We have been following up to see what can be done to reimburse consumers for what some experts call a serious mistake in pricing electricity.<\/p>\n<p>In June, News 88.7 reported how a data error may have caused a very big mistake. It was in the computer system that\u2019s used to set the minute by minute price for electricity sold on the wholesale market in Texas.<\/p>\n<p>One investor and energy trader, Adam Sinn, told us the mistake resulted in what he called \u201cfake profits.\u201d<\/p>\n<p>\u201cWe calculated this mistake was somewhere in the ballpark of $50-plus million,\u201d Sinn said.<\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/w.soundcloud.com\/player\/?url=https%3A\/\/api.soundcloud.com\/tracks\/217799658&amp;color=ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_comments=true&amp;show_user=true&amp;show_reposts=false\" height=\"166\" width=\"100%\" frameborder=\"no\" scrolling=\"no\"><\/iframe><br \/>\n<!--more-->Sinn told us that he \u2014 and others involved in selling electricity \u2014 collectively made those millions of dollars in just one day this May. It was a day when the price of electricity in Texas skyrocketed.<\/p>\n<p>It shot up because the computers \u2014 run by a quasi-state agency, the Electric Reliability Council of Texas (ERCOT) \u2014 priced-in a shortage of electricity coming out of West Texas. The shortage was because massive transmission lines were going to be out-of-service: less electricity to meet the demand, prices go up.<\/p>\n<div id=\"attachment_24750\"  class=\"wp-caption module image left\" style=\"max-width: 148px;\"><img decoding=\"async\" loading=\"lazy\" class=\"size-full wp-image-24750\" alt=\"Donna Nelson, chairperson of the Texas PUC, moved the commission a step closer today to a capacity market. \" src=\"https:\/\/stateimpact.npr.org\/texas\/files\/2013\/02\/nelson_no_border.jpg\" width=\"148\" height=\"200\" \/><p class=\"wp-media-credit\">Courtesy Texas PUC<\/p><p class=\"wp-caption-text\">Donna Nelson, chairperson of the Texas PUC, moved the commission a step closer today to a capacity market.<\/p><\/div>\n<p>There was just one problem. There never was a problem getting electricity out of West Texas. It was all a mistake caused by incorrect information provided to ERCOT by a utility company that maintains power lines in West Texas. The price should never have gone up.<\/p>\n<p>Since our first story in June, we\u2019ve been questioning regulators and industry insiders for an explanation as to what happened and how electricity consumers can be reimbursed. We found that it was an honest mistake \u2014 that doesn\u2019t appear to be disputed by anyone involved. But what to do about it is where it gets interesting.<\/p>\n<p>\u201cI worked for the Midwest equivalent of ERCOT. This would have been my responsibility,\u201d said Ron McNamara, an economist and consultant now living in Sugar Land.<\/p>\n<p>McNamara used to manage the electricity market for 15 Midwestern states.<\/p>\n<p>\u201cIf it happened there, we actually put in place an interim solution,\u201d Sinn said; a solution to correct pricing when data mistakes happen.<\/p>\n<p>\u201cI talk to people in other markets and there was a general feeling that something of this magnitude should be, if not re-done, seriously looked at as to what happened and make sure it doesn\u2019t happen again,\u201d said Sinn.<\/p>\n<p>But hold on, who\u2019s suggesting that it shouldn\u2019t be re-done or corrected?<\/p>\n<p>\u201cWe don\u2019t have procedures in place for changing those prices,\u201d said Robbie Searcy, a spokesperson for ERCOT.<\/p>\n<p><div class=\"related-content alignright\"><h4 class=\"related-header\">Related<\/h4><div class=\"links\"><h5>Posts<\/h5><ul><li class=\"link\"><a href=\"http:\/\/stateimpact.npr.org\/texas\/2015\/08\/03\/power-to-choose-or-to-pay-more-state-of-texas-website-faulted-by-consumers\/\">Power To Choose -Or To Pay More? State Of Texas Website Faulted By Consumers<\/a><\/li><li class=\"link\"><a href=\"http:\/\/stateimpact.npr.org\/texas\/2014\/10\/20\/texas-puc-leaves-centerpoints-excess-revenue-untouched\/\">Texas PUC Leaves CenterPoint\u2019s &#8216;Excess Revenue&#8217; Untouched<\/a><\/li><li class=\"link\"><a href=\"http:\/\/stateimpact.npr.org\/texas\/2014\/08\/25\/whos-getting-the-best-deals-on-electricity-in-texas\/\">Who&#8217;s Getting The Best Deals On Electricity In Texas?<\/a><\/li><\/ul><\/div><div class=\"topics\"><h5>Topics<\/h5><p class=\"topic\"><img class=\"alignleft\" src=\"https:\/\/stateimpact.npr.org\/texas\/files\/2011\/08\/Meter-4-60x60.jpg\" height=\"60\" width=\"60\" \/><a href=\"http:\/\/stateimpact.npr.org\/texas\/topic\/public-utility-commission-of-texas\/\">What Is The Public Utility Commission of Texas?<\/a><\/p><p class=\"topic\"><img class=\"alignleft\" src=\"https:\/\/stateimpact.npr.org\/texas\/files\/2011\/07\/ERCOT-Power-Electricity-By-Daniel-Reese-05-60x60.jpg\" height=\"60\" width=\"60\" \/><a href=\"http:\/\/stateimpact.npr.org\/texas\/topic\/ercot\/\">What Is The Electric Reliability Council Of Texas (ERCOT)?<\/a><\/p><\/div><\/div>Back in June she explained that ERCOT\u2019s rules don\u2019t require it to re-price this kind of mistake. Or in other words, ERCOT will not lower prices for a while so that electricity-generation companies, in essence, give back the so-called fake-profits.<\/p>\n<p>After we first reported on this, a Houston Chronicle columnist wrote about our story. Then, a website that covers the Texas electricity industry did the same. But when Texas utility regulators were on a conference call with reporters last week, we couldn\u2019t learn much about where they stood on the issue of the big mistake.<\/p>\n<p>\u201cI\u2019m not really sure what you\u2019re saying. So let\u2019s talk after the call,\u201d said Donna Nelson, chairman of the Public Utility Commission of Texas.<\/p>\n<p>We never got a chance to talk after the call. Our follow-up email to her office went unanswered as had an email weeks earlier. But the Commission\u2019s spokesperson did respond, writing to us that the Commission\u2019s enforcement division is investigating the mistake, but hadn\u2019t reported to the commissioner yet, so he said it would be inappropriate for her to comment.<\/p>\n<p>Why might all this matter?<\/p>\n<p>For one thing, experts on energy markets say even honest mistakes can drive up the cost of electricity for consumers. And if not corrected, to not \u201cre-price\u201d the market after a mistake could send a signal to unscrupulous operators who might want to manipulate the market by \u201ccreating\u201d mistakes and then profiting from them.<\/p>\n<p>Former market manager McNamara told us he\u2019d be concerned if the Public Utility Commission chooses not to take action.<\/p>\n<p>\u201cI\u2019m wondering, gee, who\u2019s looking out for me as a consumer, am I paying the right price? If I\u2019m a business and I\u2019m thinking of locating in Texas, do I have to worry, gee I\u2019m paying too much for my electricity bill?\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>We first reported in June about some so-called &#8220;fake profits&#8221; in the Texas energy industry that led to a multi-million dollar windfall for some companies. We have been following up to see what can be done to reimburse consumers for what some experts call a serious mistake in pricing electricity. In June, News 88.7 reported [&hellip;]<\/p>\n","protected":false},"author":53,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[60],"tags":[41],"acf":[],"_links":{"self":[{"href":"https:\/\/stateimpact.npr.org\/texas\/wp-json\/wp\/v2\/posts\/40383"}],"collection":[{"href":"https:\/\/stateimpact.npr.org\/texas\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateimpact.npr.org\/texas\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/texas\/wp-json\/wp\/v2\/users\/53"}],"replies":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/texas\/wp-json\/wp\/v2\/comments?post=40383"}],"version-history":[{"count":6,"href":"https:\/\/stateimpact.npr.org\/texas\/wp-json\/wp\/v2\/posts\/40383\/revisions"}],"predecessor-version":[{"id":40389,"href":"https:\/\/stateimpact.npr.org\/texas\/wp-json\/wp\/v2\/posts\/40383\/revisions\/40389"}],"wp:attachment":[{"href":"https:\/\/stateimpact.npr.org\/texas\/wp-json\/wp\/v2\/media?parent=40383"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/texas\/wp-json\/wp\/v2\/categories?post=40383"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/texas\/wp-json\/wp\/v2\/tags?post=40383"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}