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PUC Chair Steps Down After Admitting That San Antonio Has 'Really Big Gas Bills' But Also 'A Lot of Money, And They're Fine'

Daniel Reese for KUT News

Gov. Greg Abbott asked the last remaining member of the Texas Public Utility Commission to step down on Tuesday.

Texas Monthlypublished a March 9 recording of Arthur D'Andrea, the commission's chairman, speaking with Bank of America investors.

In the 48-minute call, he said he would fight to keep billions of dollars from being returned to utilities that were forced to buy power at sky-high prices.

"You know San Antonio had some really big gas bills, a fairly large electric bill, but they have a lot of money, and they're fine," he said.

Municipal utilities — including CPS Energy — and retail electric providers are now struggling with massive bills, which they argue are unjustified.

The independent market monitor for the state's grid operator, ERCOT, also called the prices artificially inflated and recommended that billions of dollars be returned to purchasers.

CPS owes more than $300 million after buying extra electricity from ERCOT, and on March 12 it sued the operator.

At the press conference announcing the lawsuit, San Antonio Mayor Ron Nirenberg said that it was the largest illegal transfer of wealth in the state’s history. He added that state regulators failed miserably to live up to their responsibilities.

During the nightly COVID-19 briefing on Wednesday, March 17, a reporter asked Nirenberg for his thoughts about D'Andrea's resignation.

"I say put Texas residents first, not the well-heeled, well-connected profiteers who are getting rich while Texans suffered during that winter event," the mayor said. "That's what we would expect and hopefully that's what will occur."

On Thursday, March 18, CPS issued its own statement. "As you know, CPS energy is a not-for-profit community-owned public power utility that has no shareholders," it explained. "The closest thing we have to shareholders is our customers — the same customers we are fighting to protect from excessive, illegitimate, and illegal prices. When market participants can’t settle their bills, ERCOT typically spreads the cost among the remaining market participants. The idea that costs from the systemic failure of the ERCOT market during a State declared disaster should be passed down to our customers is unacceptable."

On the recording, D'Andrea also apologized for efforts to reduce the price of electricity that soared during the electrical outages. He said he voted against those efforts.

“Yeah look I want it to be resolved," he said on the recording. "I took that first step to tip that scale as hard as I could in favor if it being resolved and that being the status quo and that’s to provide some… some calming force.”

Abbott said he would name D'Andrea's replacement soon, at which point D'Andrea may formally step down.

"I will be naming a replacement in the coming days who will have the responsibility of charting a new and fresh course of the agency," Abbott explained in a statement. "Texans deserve to have trust and confidence in the Public Utility Commission, and this action is one of many steps that will be taken to achieve that goal."

The resignation came the same week that the Texas House considered a measure -- already passed by the Senate -- to reverse billions of dollars in electricity charges racked up during power grid crisis.

In a committee hearing Tuesday, the outgoing head of ERCOT, Bill Magness, defended keeping electric rates at their maximum to encourage utility providers to generate more power during the winter storm.

"The idea that we could stumble back into a situation where there could be more loss of life when there was an action we could take that could alleviate -- that was unacceptable," he said.

At least three utility providers have since filed for bankruptcy, citing how state regulators managed widespread blackouts during severe winter weather.

Joey Palacios, the Texas Newsroom's Joseph Leahy and KUT's Mose Buchele contributed to this report.

CORRECTION: A previous version of this story misstated to whom D'Andrea directed his comments on March 9. It was Bank of America investors.

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Lauren Terrazas can be reached at lauren@tpr.org and on Twitter at @terrazas_lauren
Dominic Anthony Walsh can be reached at Dominic@TPR.org and on Twitter at @_DominicAnthony