A few hours into the blackouts, The Public Utility Commission of Texas took the unusual step of abandoning the market-based pricing mechanism

See Texas Opts Not to Fix $16 Billion Power Overcharge: Utility commission says repricing power markets too difficult, despite recommendation that overcharges during storm be reversed by Russell Gold of The WSJ. Excerpts:

"The Public Utility Commission of Texas on Friday signaled it didn’t intend to reverse $16 billion in electric overcharges that an independent market monitor had flagged as stemming from the state’s weeklong blackouts."

"A few hours into the blackouts, the utility commission took the unusual step of abandoning the market-based pricing mechanism and ordering wholesale power prices to be at the $9,000 cap until grid-ordered blackouts ended.

The grid operator complied and kept prices at the cap price after it stopped ordering blackouts, but at that time local electric companies were still struggling to turn the lights back on and some continued to have widespread blackouts.

The extended four days of $9,000 prices—an exponential increase over the normal prices in Texas, which last year averaged $22 a megawatt hour—took a massive financial toll on some market participants.

Vistra said it sustained losses between $900 million and $1.3 billion. Many wind farm operators, which needed to purchase electricity because of hedge contracts, are in financial distress. A major electric cooperative has filed for bankruptcy protection."

"Sen. Nathan Johnson, a Democrat from Dallas, said he considered the agency’s decision a mistake. He said he would have supported a clawback to ease concern among power generators and retailers about regulatory intervention in setting market prices.

“That would have sent a stronger market signal,” he said."