In October, Colorado-based E3 Consulting offered a plan for how the Public Utility Commission should redesign Texas’ deregulated power market. It produced a 44-page proposal, paid for by energy giants NRG and Chicago-based Exelon.
Now the PUC — saying it wants an impartial review of the proposals — has hired E3 to analyze the plans, including its own.
A PUC contract signed May 10 shows the consulting firm will receive up to $364,000 for its review. The contract notes that E3 would create an “internal firewall” to protect against bias in the report, but the contract’s administrator for E3 is first among four authors listed on its market redesign plan.
E3 didn’t respond to a voice message or email requesting comment. The PUC, in a statement from spokesman Rich Parsons, said E3 was selected through a competitive bidding process “open to any qualified respondents and in full compliance with the state’s procurement laws and procedures.”
“Through this competitive process, it was determined E3 presents the best value to Texans for this project,” he wrote.
But energy experts said the contract casts a shadow of bias over the market redesign process.
“Can you spell conflict of interest?” said Alison Silverstein, an Austin-based energy consultant who worked for the PUC from 1995 to 2001 and with the Federal Energy Regulatory Commission from 2001 to 2004. “Just on the surface, apart form evaluating their own project, you’re not supposed to have the appearance of bias, if not the reality of possible bias. Most of us citizens think if you take money from someone like a generator, you are likely to favor that party’s point of view.”
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