A Texas appeals court reversed a decision by regulators to keep electricity prices high at the maximum level allowed during a February 2021 freeze, a big win for generators including Vistra Corp.
The Public Utility Commission of Texas exceeded its authority by keeping prices at the $9,000 per megawatt price cap during the storm, because too many plants couldn't operate, the court said.
The court wrote that the commission exceeded the limits of its power.
The decision has far-reaching implications. Some of the state's biggest power generators whose plants froze up during the storm were forced to buy electricity at exorbitant prices to meet contractual obligations. The ruling could cause the reallocation of billions of dollars and potentially cause uncertainty for power traders and others more than two years after the storm, if they are able to claw back some of that money.
David Naylor, a Rayburn Country Electric electric cooperative in the state, said it is not clear how repricing would work. How a repricing would occur is going to be a complicated process. The Public Utility Commission of Texas didn't want to comment on the ruling.
Texas's biggest power-plant operators' shares went up on the news, trimming earlier losses. Vistra was down 2.3% at 3 p.m. in New York after being down 4.4% earlier in the day. NRG Energy Inc. was down 1.2% after falling 1.7% earlier in the day.
Vistra brought the case to court. Vistra spokeswoman Meranda Cohn said in an email that this is an ongoing legal proceeding and we can't predict the final outcome.
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