Texas is considering important reforms to its wholesale electricity market to improve reliability, reduce price volatility and ensure adequate electric supply. In considering these reforms, Texas should heed the lessons from other regions.
A workable electricity market doesn’t just set today’s energy prices; it ensures current and future supply is met by maintaining existing facilities and by incentivizing long-term capital investment in anticipated need. The market must maintain sufficient generating resources to meet current and peak loads even on the hottest days and even if some capacity is off-line for maintenance.
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Kelliher was chairman of the Federal Energy Regulatory Commission during George W. Bush’s presidency. Currently, he is executive vice president of federal regulatory affairs for NextEra Energy.