“The ERCOT market rewards unreliable power producers by paying them the same market price as reliable producers, leading to higher power prices and a chronic reliability deficit.”
Key points:
- The cost of wind and solar variability to Texas ratepayers is at least $2 billion per year and rising.
- Because the ERCOT market design pays volatile wind and solar generators the same market price as dispatchable power plants, it forces Texas ratepayers to overpay for unreliable electricity.
- In 2023, the Texas Legislature mandated the creation of a generator reliability standard, but only for new generators, which will have a negligible impact until the next decade.
- Any reliability standard should apply to all generators to ensure a level playing field and to maximize benefits to Texas ratepayers.
- A program that reduces the market price paid to variable generators will save Texas ratepayers money and encourage the construction of more dispatchable generation.
Download the full paper here.
Download the One-Pager here.