ERCOT $1.3B Short in Payments to Power Plants After Crisis
March 1, 2021
The Electricity Reliability Council of Texas (ERCOT) responsible for the operations of the state’s energy market is waiting for $2B in payments from retail providers to pay suppliers after the winter vortex made energy prices skyrocket to over $9,000/MWh. ERCOT was able to transfer $800M from a separate market, but still owes $1.3B. If ERCOT is unable to recoup the rest of the revenue, these costs may be passed on even to consumers, opening the possibility of requesting a bailout from the state.
ERCOT is the settling entity between generation assets and energy providers, where these transactions are usually settled the same day, but the extreme prices complicated this process. If this situation is not adequately resolved and utilities are facing an increased bankruptcy risk, there might be a need for state intervention. ERCOT will have to find a way to recoup that margin, and it is anticipated that prices for fixed-rate contracts will go up in the future.