In wake of power outages, Texas lowers price cap for electricity providers
Still, Beth Garza, a former Austin Energy executive and independent market monitor for ERCOT, said there are dangers to having a price ceiling that’s too low. Power consumers will have less incentive to conserve when supplies are tight, she said, and generators will have less incentive to bring higher-cost generation units online when needed.
“Dropping the price signals that we somehow value electricity less,” said Garza, currently a senior fellow at the R Street Institute, a Washington-based think tank. “If you are paying less for electricity, then there is less of an incentive to curtail” usage and less of an incentive for generators to produce.
But she said she doesn’t view the new $5,000 ceiling as so low that it’s likely to trigger those unintended consequences.