by Matt Archer and Maine Stephan Goodfellow
The Electric Reliability Council of Texas (ERCOT) is a leader in the development and advancement of the competitive power markets in the United States and has successfully delivered some of the nation’s lowest energy costs to consumers. ERCOT’s energy-only market does not include fixed payments to generators for their plant’s capacity. Adequate energy price signals should trigger construction of new generation, making fixed payments unnecessary. This fundamental faith in the market is now being tested in Texas. Growth in demand is resulting in smaller reserves of generating capacity.
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