Last week, former Texas Public Utility Commission Chairman Arthur D’Andrea said during a private conference call with securities analysts, “In about two weeks I went from being on a very hot seat to having one of the safest jobs in Texas.”
Turns out that wasn’t true. Texas Gov. Greg Abbott, at the urging of Lt. Gov. Dan Patrick, asked for D’Andrea’s resignation on Tuesday.
Details about the phone call:
“It was not a public meeting. This is something that a lot of securities firms do: they basically host conference calls for their clients and their clients are usually like large institutional investors and things like that,” Steffy told Texas Standard.
The call added to existing controversy about power outages during the winter storm:
“[D’Andrea] had already come under fire in the Senate. There’s been a lot of political dispute as to how to respond to this crisis,” Steffy said. “And specifically this issue of the extremely high prices that were left in place really longer than the market dictated, and what to do about that. An independent market monitor had argued that those prices should be rescinded.”
But Steffy says others are concerned that rescinding those prices could cause investors to lose faith in the Texas energy market. It could also mean potentially millions lost by firms that invested when electricity prices were at their highest.
“So there’s been a lot of debate as to how to respond, and this conversation sort of drops right in the middle of that.”
Was D’Andreas’ job really that safe?
“Well, the other two commissioners had already been forced to resign. And so he was sort of the last man standing and he goes into a lot of detail in the call about how it’s almost easier just having one commissioner,” Steffy said. “You don’t have to build consensus on the commission, and that sort of thing.”
Also, D’Andrea didn’t want to rescind the high electricity prices from during the winter storm – a stance that investors would likely favor. But it’s a much less popular stance among consumers.
“That upset a lot of people,” Steffy said.
It’s also part of a rift between Abbott and Patrick:
Abbott doesn’t believe inflated prices from during the storm should be rescinded. Patrick does.
“Neither of them are wrong, actually, which makes this an even more interesting fight,” Steffy said. “How do you go about unwinding something as complicated as this? And, and do you create more problems if you try to do that? There are not any easy answers here. This market is a mess.”
What’s the affect on Texas consumers?
“Consumers, for the most part, at least initially, are protected if you had a fixed-price contract,” Steffy said.
But he says it’s unclear how it will affect electricity consumers in the long run. He suspects he there could be fewer electricity operators on the market with higher prices.
Who runs the Texas Public Utilities Commission now?
Right now, no one. But Steffy says the governor is going to appoint someone soon. And it needs to happen soon, he says, because lawmakers in the current legislative session need feedback on proposed legislation to fix the electric grid.
“You’re going to have lawmakers writing laws without really getting feedback as to whether it’s even doable to implement that because … the people that would be in charge of implementing those policies simply aren’t there.”