1. Manufacturers State the Facts on Capacity Markets
2. Release Date: February 12, 2013

AUSTIN, TEXAS – A group of electricity generators seeking billions of dollars in subsidies has taken to the air waves with a radio advertisement that is blatantly inaccurate. The ad is the latest in the group’s campaign – which is heavy on scare tactics, slim on facts – to convince Texans to pay generators upwards of $4 billion dollars a year for power we may never need.

Here, the Texas Association of Manufacturers provides the facts about capacity markets:

FACT: Two recent reports show that Texas has plenty of electricity capacity. ERCOT’s new Load Forecast, issued on January 22, shows that ERCOT has plenty of electricity to serve the state’s needs. The Public Utility Commission (PUC) of Texas released the Brattle Report, which shows that ERCOT not only has plenty of reserves, but that the market will continue to produce those reserves into the future.

FACT: Rolling blackouts are NOT more likely in the coming years. In fact, ERCOT’s updated numbers show that ERCOT has reserves above recent historical levels through at least 2019.

FACT: Billions of dollars in extra payments to generators in a capacity market won’t ensure that the lights stay on. Despite capacity payments exceeding $50 billion, the PJM market on the East Coast continues to experience significant power shortages.

FACT: The capacity market proposal has been widely reported to add potentially $4 billion per year onto Texas consumers’ electric bills. Adding a tax to customers’ electric bills will not save them money.

FACT: Heavily-regulated capacity markets in the Northeast have cost consumers billions more for power without any guarantee that new generation facilities would be constructed and without guaranteeing increased reliability. A recent study showed, well over 90 percent of the money in a capacity market went to existing power plants, effectively buying consumers nothing and those markets have had more rolling outages than Texas has over the past two years.

FACT: The Dallas Morning News editorial was right when describing a capacity market as a “subsidy” and “a tax on everyone with an electric meter.” The Public Utility Commission should preserve the Texas energy market, which is working to provide affordable and reliable power for all Texans.

Media contact: Gretchen Fox, gfox@gfoxconsulting.com, 512-694-4326