Critics Question Price Spike During Rolling Blackouts

Investigations to probe last week's rolling power outages

At least two investigations will examine whether it was extreme weather and high demand -- or perhaps power companies' greed -- that led to last week's rolling blackouts across Texas.

Within a few hours, the price electricity generators charged briefly skyrocketed on Feb. 2 from $50 per MW to $3,000 -- the highest legally allowed.

Some 82 of the state's 550 generating plants were offline, leading to an electricity shortage and forced blackouts that lasted up to 45 minutes.

"That's an astounding amount to me," said David Power, deputy director of Public Citizen in Austin.

Power companies blamed the plant failures on a shortage of natural gas and the bitter cold and said they worked hard to bring them back online as soon as possible.

But critics question whether some providers intentionally limited electricity supply to cause a spike in prices -- essentially collecting a windfall while many Texans were in the dark.

"Market manipulation in the power markets has been known to happen in the past," Power said. "You know, there is temptation. People are known to be fueled by greed at times."

On Tuesday, the Senate Committee on Natural Resources will hold hearings into what led to the blackouts.

The Public Utility Commission also directed the independent monitor of the Electric Reliability Council of Texas, Daniel Jones, to investigate. ERCOT manages the Texas electric grid.

On Dec. 1, Texas revamped the way rates are set for wholesale electricity.

Consumer groups say it's so complicated, few really understand it.

"This is the most complex electrical system ever designed," Power said.

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