The Public Utility Commission of Texas on Thursday voted to shelve a proposed $1 billion performance credit mechanism, or PCM, for power generators, concluding it would not provide necessary grid reliability benefits.
Lawmakers authorized the PCM last year, allowing for incentives to power generators in the Electric Reliability Council of Texas market to be available during times of grid stress. It was one of several initiatives the state considered to improve power reliability in the almost-four years since Winter Storm Uri.
Almost 250 people died in Texas during Winter Storm Uri in February 2021, amid rolling blackouts.
“It’s been a lot of hard work, scrubbing down every single market design reform that was introduced during that time period,” PUCT Commissioner Lori Cobos said at Thursday’s open meeting.”We’ve spent countless hours evaluating the PCM — up until, literally, my last open meeting.”
Cobos submitted her resignation to Texas Gov. Greg Abbott in early December, after nearly four years as a commissioner. Thursday was her final open meeting.
The commission voted unanimously to adopt a staff recommendation to not advance the PCM.
Reconsideration of the PCM “may be appropriate in the future,” Chairman Thomas Gleeson wrote in a Dec. 18 memo ahead of the vote. However, “at this point I believe our collective resources are best directed toward implementing other market design initiatives,” including real-time co-optimization and a new dispatchable reliability reserve service.
Real-time co-optimization is an effort to make ERCOT energy procurement and dispatch more efficient, and the project is expected to go live towards the end of next year. The commission also adopted a reliability standard for the Texas grid in August.
Energy demand is rapidly increasing in Texas and the state needs “a tremendous amount of infrastructure,” Cobos said. A reliability standard assessment expected to launch in 2026 will provide and “an opportunity to see what needs to be done,” she said.
The commission is shelving the PCM but not throwing away the work done, Commissioner Courtney Hjaltman said. “We’re just putting it on the shelf, to see what other things are in the market.”
