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PUC to double price cap

The Texas Public Utilities Commission will likely double the price cap on wholesale electricity in order to encourage more generation. PUC chairwoman Donna Nelson told the House State Affairs Committee on Wednesday that raising the maximum price that a generator can charge is needed to make sure there is enough electricity available during peak periods plus a 13.75 percent reserve.  The Texas electricity market pays only for electricity provided, not for generating capacity. Officials say that low prices have kept generators from adding more capacity while demand has gone up. A shortage in generating capacity could result in a shortage if something unexpected happens, such as an unplanned breakdown or inclement weather.  According to sources, lawmakers have two options, either accept more outages or redesign the market to encourage more generation. One option was moving to a market that pays for installed capacity rather than the electricity supplied.  The commission will vote on the proposal Thursday.

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