ERCOT kept prices high during the blackout per the governor's instructions, former head says

The former top manager of Texas' electric grid said in court Wednesday he was following Gov. Greg Abbott’s directions when he kept electricity prices as high as legally allowed in the aftermath of last February's devastating blackout.

His testimony was first reported by the Houston Chronicle.

Bill Magness was testifying in a suit filed against the Electric Reliability Council of Texas by the Brazos Electric Cooperative. In the wake of the blackout, Brazos filed for bankruptcy protection after being hit with a $1.9 billion energy bill. It claimed the grid manager illegally and unnecessarily inflated energy costs.

Before the blackout, electricity traded on the grid for about $50 per megawatt hour. ERCOT and the Public Utility Commission's decision to increase the price to $9,000 and peg it there even after energy started returning to the grid created billions of dollars of debt for utilities and ratepayers across the state.

In his testimony, Magness said former Public Utility Commission Chair DeAnn Walker instructed him to do whatever was necessary to stop outages from returning to the grid once power had been restored.

That included keeping prices high to ensure the grid stayed stable.

“She told me that the governor had conveyed to her that if we emerged out of rotating outages, we just could not go back into them," he said. "We needed to do whatever we needed to do to try to make that happen."

The Public Utility Commission oversees ERCOT; as chair of the commission, Walker was an Abbott appointee.

A spokesperson for the governor's office said last year that Abbott was not involved “in any way” in the decision to keep energy prices high.

The decision to keep prices high to keep the grid stable proved controversial, leading to billions of dollars in unexpected costs, much of which will be paid out on ratepayers bills for years to come.

In response to a request for comment, the governor's office did not directly address the question of energy pricing.

"As Texans would expect, Governor Abbott was adamant to everyone involved that they must do what was needed to keep the lights on and to prevent the loss of life," Press Assistant Sheridan Nolen wrote in an email. "This is the same instruction Governor Abbott gave to the PUC and ERCOT earlier this year:  do what needs to be done to keep the power on."

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