Texas regulators have put forth a plan – albeit one short on details – to overhaul the state’s electricity market in a bid to shore up reliability, but questions remain regarding its affordability, implementation, and ultimately, performance.

PCM

The Public Utility Commission of Texas (PUC) last week unanimously adopted the performance credit mechanism (PCM), dubbed by market observers as Texas’ version of a capacity market.

Under the plan, some power generators would be paid to be available to produce more energy during emergencies, such as during periods of high power demand and the loss of electricity production. Generators then would sell the credits to the electric retail providers that sell power to homes and businesses. The credits are designed to provide generators...