Lawmaker says Texas agency moving too fast to reform power market

Reuters

HOUSTON, Nov 25 (Reuters) - A powerful Texas legislator toldstate regulators they are moving too quickly to reform the $29billion wholesale power market and should not make major stepswithout input from lawmakers, at a hearing on Monday.

Texas Sen. Troy Fraser, chairman of the Texas SenateCommittee on Natural Resources, urged the three-member TexasPublic Utility Commission (PUC) to "slow down."

Fraser called the hearing after the PUC late last month tookan initial step which observers believe will lead to creation ofa so-called "capacity market" to bolster state electricresources at an annual cost of $4 billion or more, Fraser said.

After months of discussion and delay, two of three PUCcommissioners said they support a mandatory reserve margin as acushion against blackouts, rather than the current "target"reserve of 13.75 percent.

"I am asking the PUC to slow down," Fraser said at the endof a three-hour hearing Monday. "You are making votes you shouldnot be doing. The Legislature needs to weigh in."

Capacity markets are used in other U.S. power markets andmany power generators say Texas needs such a construct to raisewholesale prices to the level needed to allow construction ofnew power plants.

The state's power industrial sector, including petrochemicalcompanies, oppose capacity markets. Representatives from Valero

Power plant owners in the state include Luminant, a unit ofEnergy Future Holdings, which is owned by Kohlberg KravisRoberts & Co LLP and other private equity firms; NRGEnergy, Calpine, NextEra Energy Inc andExelon Corp.

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