© Reuters. FILE PHOTO: Winter climate brought on electrical energy blackouts in Houston

(Reuters) – The top of Texas’s energy regulator informed lawmakers on Thursday that any effort to retroactively cut back the facility costs levied throughout a latest storm would result in lawsuits that the state might lose.

The state’s energy grid operator raised energy costs sharply throughout a February freeze that pushed two energy firms into chapter 11. Others have warned of potential bankruptcies. High officers this week known as on the Public Utility Fee (PUC) of Texas to instantly cut back about $16 billion in energy costs.

Any repricing would set off lawsuits that the fee would lose, PUC Chairman Arthur D’Andrea bluntly informed lawmakers at a listening to in Austin. Commodity contracts used to hedge energy have closed and any repricing “can have penalties” for the state’s energy, agriculture and different markets, he mentioned.

“If I do it, I get sued and lose immediately,” he informed a state committee. The legislature might try to vary the pricing by passing a invoice, however it additionally would face lawsuits and will lose, he added.

The state unbiased market adviser has advisable a pricing of the ultimate 32 hours of the five-day emergency and known as for some service charges to be minimize, citing grid guidelines. Emergency expenses amounted to $16 billion for energy and about $1.5 billion for service charges tied to the facility worth.

The state’s governor, lieutenant governor and 28 of 32 state senators this week additionally known as on the PUC and grid operator to “right” the ultimate 32 hours of energy pricing, citing the advice and affect on utilities.

“These corrections are squarely inside your authority, whether or not by your personal motion or an order to ERCOT,” the senators informed D’Andrea in a letter on Tuesday, referring to the state grid operator by its acronym.

“I disagree” with the senators’ name, D’Andrea mentioned. He has regularly dominated out an influence worth rollback, arguing “it’s unattainable to unscramble” insisting the choice to boost costs in the course of the chilly snap was identified to all grid customers.

D’Andrea pushed again towards the market monitor’s estimate of the facility overcharges, telling lawmakers the quantity was a lot smaller, about $3.2 billion.

Intercontinental Change Inc. (NYSE:), which handles Texas energy trades, final week closed contracts that lined billions of {dollars} in state energy trades and has no authority to reopen settled contracts. ICE has deferred settling 4 contracts tied to the service charges which might be a lot smaller in worth, folks conversant in the matter informed Reuters.

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