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Did Texas energy regulators fail to mandate winter protections?

Asher Price Bob Sechler
Austin American-Statesman

Failing power plants, rolling blackouts and a spike in demand as Texas is hijacked by a harsh February winter snowstorm — this was the scenario exactly a decade ago as blackouts rolled through Texas.

A post-mortem at the time — including a key finding that state officials recommended but did not mandate winter protections for generating facilities — has renewed relevance as Texas is roiled by a record storm that has left millions without power for at least three days amid plunging temperatures.

Those 2011 findings, as well as reports from the state grid operators that generators and natural gas pipelines froze during the current calamity and American-Statesman interviews with current and former utility executives and energy experts, suggest a light regulatory touch and cavalier operator approach involving winter protections of key industrial assets.

"You could take out ‘2011’ and pop in ‘2021,’ and there is going to be a lot of similarities” between the deficiencies in the grid found in the report 10 years ago and those plaguing it now, said Dave Tuttle, an Energy Institute research associate at the University of Texas.

Related:Why is Texas one of few states with its own power grid?

Had the recommendations been followed, either voluntarily by power generators and transmission companies or because of mandates by regulators, many Texans likely would be a lot warmer now, Tuttle said.

“It’s not like the technology isn’t there” to keep electricity flowing during extremely low temperatures, he said. “There are people who live in a lot colder climates than we do” without losing power.

A map displays electricity transmission across Texas in this 2018 file photo. RALPH BARRERA/AMERICAN-STATESMAN

Plenty of blame to go around

A federal report issued in the summer of 2011 found that state officials back in 1989, after another cold snap caused outages, "issued a number of recommendations aimed at improving winterization on the part of the generators."

"These recommendations were not mandatory, and over the course of time implementation lapsed," said the August 2011 report by the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation, titled "Report on Outages and Curtailments During the Southwest Cold Weather Event of February 1-5, 2011." 

Texas energy:ERCOT is in charge of Texas' power, but one-third of its board lives out of state

The agency that oversees the state’s main power market — the Electric Reliability Council of Texas — has been getting the brunt of criticism for the ongoing system failure, with Gov. Greg Abbott and other state leaders calling for investigations and hearings regarding its handling of the emergency.

But Tuttle said there’s plenty of blame to go around.

“It’s not just ERCOT — although ERCOT is going to get hammered over this,” he said.

The Fayette Power Plant, co-owned by the city of Austin and Lower Colorado River Authority, is a coal-fired plant that supplies electricity to the Texas electricity grid. TAYLOR JOHNSON/AMERICAN-STATESMAN

The PUC 'did nothing'

ERCOT is regulated by the Public Utility Commission of Texas — a three-member panel appointed by the governor — as well as by the Legislature. In addition, power generation companies, transmission companies and retail utilities all have a hand in keeping electricity flowing in the state’s deregulated electricity market. 

"10 years ago, the PUC identified the incapacity to deal with extreme shifts in the weather and did nothing," state Rep. Lyle Larson, R-San Antonio, wrote Wednesday on Twitter.

More:Is ERCOT a government agency? Answers to 5 questions about the group that operates Texas' power grid.

In response to a question from the American-Statesman about what the state mandates in terms of winterization, a Public Utility Commission official pointed to a state rule that every year ERCOT must file reports with the PUC addressing whether generators have complied with winter weatherization plans — including “an assessment of the reliability and adequacy of the ERCOT system during extremely cold or extremely hot weather conditions.”

“ERCOT's review of plants indicates that the majority of plants are following their weatherization plans,” says the Extreme Weather Reliability Assessment, filed with the PUC in January.

The Statesman also left messages with the Texas Railroad Commission, which regulates gas pipelines, asking whether the agency requires gas pipeline operators to winterize their infrastructure and if it requires any kind of proof or affidavit about that winterization. The messages were not immediately returned.

Agency spokesman R.J. DeSilva wrote in an email that "the RRC has strict enforceable rules in place to ensure safe production and transportation of oil and natural gas in the state" but he did not mention any mandates. 

The agency recently sent a bulletin to oil and gas operators "urging companies to monitor and maintain operations as safety permits," DeSilva said. 

Others are reading:How to help, and what to do if you need it, during Texas' historic freeze

Messages left by the Statesman with the Association of Electric Companies of Texas and the Texas Pipeline Association asking about winterization practices also were not immediately returned. 

One coal plant executive who formerly worked in grid operations told the Statesman that the PUC requires operators of generators to sign an affidavit confirming that facilities have been winterized. 

"But it's not like they say, 'Here are 1,000 things you need to do,' " said the executive, who spoke on condition of anonymity since he was speaking about a regulatory agency that oversees some of his work.

A decade to act

The winter storm in February 2011 saw single-digit temperatures in parts of Texas.

A total of 193 generating units in Texas faltered, leading to rolling blackouts affecting 3.2 million customers. 

"Had ERCOT not acted promptly to shed load, it would very likely have suffered widespread, uncontrolled blackouts throughout the entire ERCOT Interconnection," federal regulators concluded at the time, a claim that ERCOT operators are echoing today as they seek to answer criticism from Abbott and other politicians.

The federal officials also found that natural gas pipelines and production facilities were compromised by the weather.

"Generators and natural gas producers suffered severe losses of capacity despite having received accurate forecasts of the storm," the 2011 report said. "Entities in both categories report having winterization procedures in place. However, the poor performance of many of these generating units and wells suggests that these procedures were either inadequate or were not adequately followed."

Coal plant executive and Joe Beal, a former general manager of the Lower Colorado River Authority, said he suspected frozen valves on gas pipelines played a role in this month's energy calamity.

On Wednesday, the coal plant executive and Joe Beal, a former general manager of the Lower Colorado River Authority — which operates coal and gas plants, transmission lines and has a hand as well in wind power — both said they suspected frozen valves on gas pipelines played a role in the calamity.

"I remember that happening about 20 years ago in the Metroplex," Beal said. A "valve operator froze up. ... You see them in the countryside where the pipe curves out of the ground with a valve and operator and then goes back under the ground."

More broadly, investigations are sure to look at whether the system had enough capacity to handle the problems — just as investigators did in 2011. 

"Reserves proved insufficient for the extraordinary amount of capacity that was lost during the event," investigators found at the time.

Larson, the state representative, said Wednesday that "the power generators asked for a capacity market to build more natural gas power plants during the heat wave of 2011. PUC did nothing. Bad decision."

The ERCOT grid is what's known as an "energy only" market, in which generators are compensated only for electricity actually delivered. In an "energy plus capacity" market, they also would be compensated for generating capacity that's maintained but kept in reserve for special or unusual circumstances.

It's 'complicated':Downtown Austin glowed bright while thousands went without power

The problem, said Mark Rose, also a former LCRA and Bluebonnet Electric Cooperative general manager, was that extra capacity was opposed by large industrial consumers of electricity and led to constant conflict at the PUC. 

Those big industrial players were looking for the cheapest possible rate — and building more capacity costs money. 

On Wednesday, ERCOT chief executive Bill Magness dismissed the idea that moving to a capacity market would have changed the outcome. 

"A capacity market wouldn’t have changed the weather," he said. "There isn’t a capacity shortage. It was a problem of capacity being knocked out by an extraordinary event."

Meanwhile, an agency called the Texas Reliability Entity is charged with ensuring that the Texas grid lives up to federal reliability standards, although it has no role in overseeing ERCOT’s operation of the state’s competitive wholesale and retail electricity markets.

Matthew Barbour, a spokesman for the Texas Reliability Entity, said the state's overall grid was deemed reliable according to federal standards going into the current winter storm, which he described as "beyond what is expected (for Texas) based on all reasonable models and historic precedent."

Still, there isn't currently an enforceable federal winterization standard for electricity grids, Barbour said, although development of such a requirement is in the works.

'Egregious' and 'insufficient'

Chrysta Castañeda, an oil and gas attorney who ran unsuccessfully last year for a seat on the Texas Railroad Commission, agreed with Tuttle that there is no shortage of culprits in the ongoing failure of the Texas power grid. The Railroad Commission regulates the state’s oil and gas industry.

But Castañeda, a Democrat, singled out in particular an “egregious” communication failure on the part of ERCOT in terms of the making people aware in advance of the likely severity of the situation. She also cited what she called an anti-regulation mindset among many in the state’s Republican leadership that has resulted in lax oversight overall.

“There are insufficient standards in place to prevent this event,” she said. But “raising the standards costs money, and individual (generators and transmission companies), if they don’t have the incentives to do so, will avoid spending that money.”

Legislative hearings and a variety of investigations have already been announced. 

A decade ago, in the wake of the February 2011 weather-related blackouts, Glenn Hegar, then a Republican state senator from Katy, authored legislation that required the Public Utility Commission to analyze emergency operations plans developed by electric utilities; analyze and determine the ability of the electric grid to withstand extreme weather events in the upcoming year; and make recommendations on improving emergency operations plans and procedures in order to ensure the continuity of electric service.

 “When I passed this legislation, it was intended to identify the mistakes made in 2011 and ensure that our power grid, including our generation capacity, was prepared for winter weather emergencies," Hegar, now the state comptroller, told the Statesman. "While the issues that are plaguing our electric grid system in this disastrous winter storm are complex, I am extremely frustrated that ten years later our electric grid remains so ill-equipped for these weather events.  

"The most immediate issue is getting power to the millions of Texans who have experienced prolonged outages that threaten their lives and property," he continued. "However, once the grid is back to being fully operational again, we must address why, after ten years have passed, are we in a worse position today than in 2011. Why are certain areas going without power for two days or longer, while other areas have successfully navigated through rolling blackouts, or never experience power outages at all? The most pressing question is what can Texas do in the 21st century to ensure that our grid doesn’t experience these issues again?”

The questions are going to be coming from local officials as well.

“The majority of my district is without power, along with huge parts of the city and state. This is beyond unacceptable,” Austin City Council Member Greg Casar said. “The state’s emergency response has been insufficient, communications at all levels has been deficient, and the statewide power grid was woefully underprepared for this weather. On the other side of this storm, we must ask hard questions about what got us here, locally and statewide, and hold people accountable."