Vistra, a residential electricity provider, has been raking in millions amid an ongoing heatwave and calls for energy conservation. However, this payday is far from market-driven, a business energy watchdog told the Austin Journal.
Vistra's profits have more to do with the state's regulatory agencies, the Public Utility Commission (PUC) of Texas and the Electric Reliability Council of Texas (ERCOT), Energy Alliance Policy Director Bill Peacock said.
"These higher prices are not market prices, but prices set by ERCOT," Peacock said in a statement to the Austin Journal. "The Texas Legislature's decision to authorize the PUC and ERCOT to increase intervention in the market is costing Texans billions."
Peacock's comments were in response to a Morgan Stanley report that found Vistra could make up to $10 million per hour amid energy shortages, thanks to new ERCOT rules.
In its July 21 news story about the Morgan Stanley report, the Houston Chronicle said ERCOT's new rules are aimed at increasing the state power grid's reliability and state residents might have gone without power had it not been for ERCOT's emergency energy buys.
Those emergency energies have been immensely profitable to companies like Vistra, which is holding back unhedged capacity to sell when actual energy usage is close to maximum capacity. That adds up to $10 million per hour in ERCOT emergency purchases, even with the reduced maximum offer of $5,000 per megawatt hour.
"This exposure could quickly add up and depending on the weather and supply conditions, we could see $100 million plus over the next few weeks if similar grid conditions arise," the report said.
The Energy Alliance recently published a report about its own research that found too much regulation and over-involvement in the energy market by politicians has reduced the state's energy market's efficiency and ability to operate effectively. Peacock told the Austin Journal that these interventions can be directly linked to winter storm blackouts and current summer energy concerns.