Manufacturers on Proposed Electricity Market Changes: Reliability is #1 Objective; Must Achieve Reliability at a Reasonable Cost to Consumers

June 22, 2022

The following can be attributed to Tony Bennett, president and CEO of Texas Association of Manufacturers (TAM). TAM shared these perspectives before the Texas House State Affairs Committee today:

“Electricity reliability is the number one objective for Texas manufacturers as we cannot operate without a reliable electric supply. As the Legislature considers the Texas energy market, manufacturers believe that Texas must achieve reliability at a reasonable cost to consumers and be mindful of how much risk is borne by customers versus generators.

There are many dedicated revenue streams today that specifically pay for dispatchable generation including ancillary services and Operating Reserve Demand Curve (ORDC) payments. The Texas Association of Manufacturers supports these mechanisms, which have been expanded since Winter Storm Uri, partly from the Public Utility Commission's “phase one” changes and from ERCOT's conservative operations. Using the IMM’s estimates, these changes have resulted in additional cost of about $3.5 million a year for a 100 MW industrial customer. Additional market design changes would be on top of those existing changes and costs.

We do not want customers to be forced to make fixed payments to companies that own dispatchable generation, just for owning a generator. That approach is bad for economic development and for customers. The state has wisely gravitated toward a pay-for-performance system versus a pay-to-exist model.

Manufacturers make multi-billion-dollar investments without guaranteed revenues. In a private competitive market, manufacturers bear that investment risk and those same core principles should continue to exist in the electric market."


Media contact: Gretchen Fox, 512-694-4326