News Archive Article

Blu Power fifth retail marketer to quit ERCOT

HOUSTON, TEXAS - Blu Power of Texas has become the fifth retail marketer in recent weeks to quit the Electric Reliability Council of Texas's market.

ERCOT said Blu Power asked it July 1 to begin moving its roughly 2,000 residential customers to providers of last resort.

The recent exodus of marketers from ERCOT's retail market has been blamed largely on high wholesale electricity prices that marketers, who see power to retail customers at fixed rates, are unable to cover.

For much of May and the first part of June, power prices in ERCOT frequently moved well above the $2,250/MWh offer cap in the balancing energy market, where retailers have to purchase power if they are caught short on supply. On at least one occasion, prices in the market soared to as high as $4,000/MWh.

In June, ERCOT implemented protocol changes designed to improve how congestion in the region is resolved. The move was one supporters, including Potomac Economics, ERCOT's market monitor, said would help relieve some of the extreme prices. The grid operator also implemented system software changes aimed at guaranteeing prices do not exceed the $2,250/MWh offer cap in place in the balancing energy market.

Since the changes were put in place, ERCOT's balancing energy market has seen a dramatic decline in prices, with few exorbitant spikes being seen and prices mostly hitting their highs when demand in the region reaches it peak, a common characteristic of the market.

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