The Public Utility Commission of Texas has been accused in a lawsuit filed Tuesday by an energy trading company of promulgating orders that created and modified a program intended to provide reserve power in emergency situations without first allowing for public comment, in violation of the Texas Administrative Procedure Act.
Aspire Power Ventures filed notice of its direct appeal with the Third Court of Appeals in Austin, challenging three orders PUCT issued related to the Electric Reliability Council of Texas Contingency Reserve Service, which was rolled out in June 2023. Its creation was intended to prevent another power emergency situation like what happened during 2021’s Winter Storm Uri from happening again.
But Aspire alleges the opposite has happened. Instead of creating reserve power, it designates existing power capacity as “emergency reserves” during peak demand, therefore it “decreases capacity when it is most needed.”
“As has been proven multiple times since its implementation, ECRS does not work and has needlessly driven up the price of electricity for consumers and market participants,” Aspire alleges.
Chrysta Castañeda of The Castañeda Firm, Aspire’s lead attorney in the case, issued a statement saying that this isn’t the first time PUCT and ERCOT have run afoul of the APA.
“Yet again, the PUC and ERCOT have issued rules that fail to comply with the law. Rather than give the public notice of the ECRS rules before they were enacted and allow people to challenge them before they were finalized, the PUC issued rules that were obscured from public scrutiny and ended up costing Texans dearly,” she said. “State agencies are required to comply with the Administrative Procedures Act, not keep the public in the dark about what they are doing. Public input is a critical part of the process, and without it, the PUC is acting illegally.”
The Independent Market Monitor that oversees ERCOT has pointed to ECRS as a cause of artificial shortages that have “produced massive inefficient market costs, totaling more than $12 billion in 2023,” according to the lawsuit.
By August 2023, two months after ECRS was created, ERCOT had paid generators more than $608 million to keep electricity off the grid under the program, driving up the cost of electricity for market participants, Aspire told the court, and those market participants “are now attempting to recoup the costs from consumers.”
Aspire is also represented by Nicole Michael of The Castañeda Firm and Monica Latin of Carrington, Coleman, Sloman & Blumenthal.
Counsel for PUCT had not filed an appearance as of Wednesday. The agency declined to comment on the suit, citing agency policy on pending legal matters.
The case number is 03-24-00102.