Some companies made millions off the Texas blackouts

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By Forrest Wilder
Published: Thursday, February 03, 2011
Texas Observer

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While Texans suffered rolling blackouts Wednesday, some power generators were enjoying windfall profits. Starting around 5 a.m., prices in the wholesale market surged to the market cap, $3,000 per megawatt-hour, and stayed there, off and on, until around noon. Prices are typically below $100/megawatt-hour, acknowledged ERCOT CEO H.P. "Trip" Doggett today in a press conference.

There are still more questions than answers but this much is clear: At best, some power generators around the state raked in oodles of money thanks to the way ERCOT has structured the energy market. At worst, some may have manipulated the market to drive up prices.

In the end, the price surge yesterday could cost consumers tens of millions of dollars, said David Power, deputy director of Public Citizen-Texas. Although residential consumers are typically insulated from temporary wholesale price spikes, "Somebody ends up paying for it," said Power.

Forrest Wilder, a native of Wimberley, Texas, joined the Observer as a staff writer in April 2005. Forrest specializes in environmental reporting and runs the “Forrest for the Trees” blog. Forrest graduated from the University of Texas at Austin in December 2003 with a degree in Anthropology.