Can Texas overcome a regulation ‘allergy’ in order to reform the market and keep the lights on?
So far this summer, power demand in the Electric Reliability Council of Texas market has set 11 new all-time records as the grid has faced weeks of 100-plus degree temperatures. With that has come power scarcity conditions and high power prices, both affected by state policymaker actions.
S&P Global senior editor Mark Watson spoke with Alison Silverstein, an Austin-based independent energy market consultant and former advisor to chairmen of both the Federal Energy Regulatory Commission and the Public Utility Commission of Texas. She offered unique insights into how the situation developed that prompted state regulators to take a more hands-on approach to the Texas power market, encouraging the operation of the grid with a higher capacity reserves requirement and supporting the deployment of administrative price adders well before scarcity conditions arise. Silverstein also tackled how energy efficiency could enhance reliability in situations where market incentives have been producing significantly higher prices for energy consumers without addressing key reliability concerns.
Stick around after the interview for Jordan Blum with the Market Minute, a look at near-term oil market drivers.