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RG weighs in on Texas’ potential capacity market

Houston-based NRG Energy recently made a filing with the grandfather of all deregulation, the Texas Public Utilities Commission, to ask for a doubling of the current wholesale electricity caps, and for the regulator to create a capacity market in Texas, the Houston Chronicle reports.

According to the media outlet, the PUC has separately considering both direction in which the energy market could go, however NRG is the first to suggest the PUC adopt both of them at the same time. However, the request has driven several outcries from analysts and industry experts, as both options would lead to enormous costs, and if both are implemented, it could lead to higher electricity rates and weaker competition.

"It's outrageous," said Paul Ring,  an independent market analyst who writes the blog Energy Choice Matters. "It's going to ruin the market."

All summer the PUC has been discussing wholesale electricity prices, and some increases have already been noted.

The implications of such a request could be huge, given that Texas has made a name for itself in the last 10 years as one of the most competitive energy markets in the country, which is home to dozens of retail energy providers.