Commentary: Regulators Approve Nearly 20 Percent Fee Hike for Texas Electric Grid Operator
Regulators this week hiked by nearly 20 percent the fee that supports the state’s principal electricity grid operator.
In a 3-0 vote Thursday, the Texas Public Utility Commission agreed to raise the “System Administration Fee” From 46.5 cents to 55.6 cents per megawatt hour. The fee supports operations at the Electric Reliability Council of Texas, or ERCOT, which oversees the transmission grid in about 85 percent of the state.
The nine-cent fee hike, the largest since at least 2009, will be applied to wholesale power purchases, meaning that it won’t go directly into home bills. But it’s sure to trickle down anyway, and could increase your energy costs by 10 cents or more each month.
Each of the three PUC commissioners expressed dismay at raising the ERCOT fee, but said the hike was necessary to finance technology improvements and to comply with new directives.
“We don’t like to see fee increases (but) this was necessitated by a big investment in IT,” said PUC chairwoman Donna Nelson.
“I don’t want to see double digit increases in the future — this is a one-time deal,” said Commissioner Kenneth Anderson.
Besides new technology-related projects and other new responsibilities — including those mandated by federal regulators — ERCOT also claimed it needs extra money to keep up with inflation.
But the fee, like a sales tax, is attached to energy consumption. So just as state revenues increase when more goods are sold statewide, so too do ERCOT revenues go up when energy consumption rises. The fee itself also has increased over the years — from 33 cents per megawatt hour in 2003, then later to 41.7 cents, and most recently to 46.5 cents.
