The Big Freeze didn’t just screw Texas

I had no idea.

Texas’ deep freeze didn’t just disrupt natural gas supplies throughout Lone Star country—its effects rippled across the country, extending as far north as Minnesota. There, gas utilities had to pay $800 million more than they anticipated during the event, and Minnesota regulators are furious.

“The ineptness and disregard for common-sense utility regulation in Texas makes my blood boil and keeps me up at night,” Katie Sieben, chairwoman of the Minnesota Public Utility Commission, told The Washington Post. “It is maddening and outrageous and completely inexcusable that Texas’s lack of sound utility regulation is having this impact on the rest of the country.”

The gas and electric markets in Texas are lightly regulated and highly competitive, which has pushed companies to deliver energy at the lowest possible cost. But it also means that many companies were ill-prepared when the mercury dropped. To save money, they had skimped on winterizing their equipment. As a result, gas lines across the state—which has about 23 percent of the country’s reserves—quite literally froze. The spot price of natural gas soared to 70-times what it would normally be in Minnesota, and gas utilities paid a hefty premium when they used the daily market to match demand.

In a twist, the biggest gas utility in Minnesota is CenterPoint Energy, a Houston-based company that also supplies a large swath of Southeastern Texas. The company said it spent an additional $500 million on gas that week in February, and it has asked Minnesota’s utility commission for permission to add a surcharge to customers’ bills. The surcharge not only seeks to recoup the additional money CenterPoint spent on natural gas, it also includes 8.75 percent interest. The company expects that each customer would shoulder a burden of $300 to $400.

Crazy, huh? I heard about this from friends on a recent Zoom call. CenterPoint is not only pushing to bill their Minnesota customers more to make up for the price differential, they’re asking to begin doing that in May instead of in September when price adjustments are normally made. They’re doing this because they say they’re in a cash bind, while at the same time their CEO is assuring investors that their cash position is just fine. They sure know how to make friends, don’t they?

The WaPo story has more details. This bit at the end caught my interest:

The state’s attorney general, Keith Ellison, a former Democratic member of Congress, has filed a strongly critical response to CenterPoint’s plan.

It notes that over the two-year payout schedule, the interest charged to customers would amount to $60 million, “at a time when many of them are already behind on their bills.”

CenterPoint argues that the interest charge reflects its own capital borrowing costs and that it is an appropriate item to add to its bills.

“The company has already had to pay most of the natural gas costs from February, but these costs will only be recovered over an extended period of time,” [CenterPoint spokesperson Ross] Corson wrote. “Until recovered, CenterPoint Energy must finance these costs through a combination of debt and equity. Given the unprecedented magnitude of this financial commitment, it is appropriate to include finance charges.”

Annie Levenson-Falk, executive director of a nonprofit called the Citizens Utility Board of Minnesota, asked in an interview why CenterPoint didn’t appeal for voluntary reductions in gas use when it saw prices spike.

She said the utilities should demonstrate why they had to rely so heavily on the spot market. But, she added, “there’s no getting around it — these are big costs that someone is going to have to incur.”

Natural gas, though, is an “essential good,” she said, adding that ordinary Minnesotans, collateral damage in the Texas disaster, are blameless.

“You know, somebody made a lot of money off people needing to heat their homes,” she said. “And that’s not right.”

There’s talk that Minnesota AG Ellison may file a lawsuit against CenterPoint over this. I can already hear the caterwauling from certain local politicians if that happens.

On a side note:

An updated analysis of February’s Texas power crisis by experts at the Electric Reliability Council of Texas shows that lost wind power generation was a small component of the huge losses in electric generation that plunged much of the state into darkness during the severe cold weather.

While Texas Republicans were quick to blame renewable energy during the storm — and have continued to target renewable energy for reform during this year’s legislative session — a recently updated report on the causes of generator outages during the week of Feb. 14 show that the most significant cause of the low power supply to the grid came from natural gas plants shutting down or reducing electricity production due to cold weather, equipment failures and natural gas shortages.

In ERCOT’s first preliminary report on the causes of the power crisis, released in early April, the grid operator included a chart that appeared to show power generation losses from wind as just slightly smaller than natural gas generation losses that week. But that analysis used the capacity of the state’s wind turbines to generate electricity, not what wind turbines would have actually generated if not for the outages.

Wind power feeds into the grid depending on weather conditions, and renewable energy sources typically have much higher potential to generate electricity than what is actually produced on a day-to-day basis; sometimes renewable power generates a lot and at other times none or very little. ERCOT uses detailed weather forecasts to estimate how much wind and solar power will be available to the grid.

In the updated analysis included in a Wednesday ERCOT meeting, the grid operator calculated that for the week of Feb. 14, natural gas power losses were several times that of wind generation.


The analysis also provided a more detailed picture of the reasons for natural gas outages, showing that disruptions in natural gas supply to the plants were a bigger share of the outages than initially estimated. Still, weather-related problems and equipment problems remained the biggest reasons for natural gas plant outages.

Here’s a pretty picture for you:

Sure would be nice if the Legislature spent less time attacking transgender kids and renewable energy, and more time working to make the grid more reliable and less likely to produce another big freeze, wouldn’t it?

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5 Responses to The Big Freeze didn’t just screw Texas

  1. Bill Daniels says:

    I don’t see what’s controversial about this. In Minnesota, they bought natural gas in a free market….there was a problem with supply, the price went up. They didn’t have a PUC/ERCOT that mandated price spikes, the price spiked because natural gas became more scarce. Gas utilities are regulated, if it’s the same in Minnesota, the service providers don’t make money on the gas sold, they pass it through at the price the provider paid for it, making money on the monthly service charge instead.

    So if the service provider had to pay more, then why shouldn’t the customers pay to reimburse the service provider? The gas providers should be made whole for financing the extra cost. Maybe there’s some room to negotiate the interest rate on the money the gas companies floated to their customers, but there should be no question that the companies should be reimbursed for their investments.

  2. Frederick says:


    You forgot to mention the monumental ineptitude of the GOP in failing to adequately protect the energy infrastructure in Texas as the source of all the problems.

  3. Bill Daniels says:


    Let’s go with that supposition, that lax regulation in Texas was the proximate cause of gas prices spiking in Minnesota. That doesn’t change the calculus, that the gas customers of Minnesota should pay for the gas they used. Centerpoint is an innocent middle man, and they shouldn’t suffer because the spot market for natural gas spiked.

    Unless we can prove that natural gas producers and pipeline companies colluded, Enron style, to shut in production to spike natural gas prices, then it’s just a simple matter of supply and demand, and no one complains when energy prices crash, only when they spike.

  4. policywonqueria says:


    Re: “In the updated analysis included in a Wednesday ERCOT meeting, the grid operator calculated that for the week of Feb. 14, natural gas power losses were several times that of wind generation.”

    This cannot even be called an “analysis”. It’s just a matter of how the data (assuming it’s even valid data) was/is presented, i.e., a question of how to “lie” or “spin the story” with statistics.

    There was no secret from the start about the difference between “nameplate” capacity of wind generation facilities on the one hand, and expected generation based on weather (wind) forecasts on the other, and therefore of the ability to compare actual generation to either the highest-possible generating capacity under optimal conditions, or how much wind power was excepted to contribute to the grid at a particular point in time or time interval.

    So if – for political, ideological, or vested-interest reasons — you want to lay blame at wind power, you can make the apparent performance of that energy source look much worse by comparing it to what the wind farm is capable of producing under optimal wind conditions as designed by the manufacturer.

    Another way to make wind power look worse is to show how they performed during the February winter storm (or the month of February) relative to an entire year. That’s not legit either because wind varies by season. In other words, no one expects the wind-generating infrastructure to produce as much in the winter as in the summer.

    And operators can store fuel on site to run thermal plants even if there is a temporary supply disruption, but you can’t store wind or instruct God or Mother Nature to blow air as needed. (Hydroelectric power based on reservoirs is a different story. In that scenario, water can be released to drive turbines as needed as long as it remains liquid).

    An extreme form of the blame-shifting argument regarding energy source would be to fault solar farms for not generating at full capacity at night, i.e., blame the sun for not shining (or the earth, for continuing to rotate). It’s pretty ridiculous, but look at the green line on Page 16 of the updated report (“Solar Outage and Derate”) which reports solar nonproduction on a 24-hour basis. So this metric includes solar power “loss” at night because the facility retained the technical capacity to generate all night long, had the “fuel” (i.e., sunlight) been available.


    This issue of relative contribution to the power-generation shortfall by source/fuel is a good illustration that the public, the pundits, and especially the media, shouldn’t just uncritically accept representations by parties with an ax to grind (including politicians), but should use their own critical thinking skills to the full extent.

    That skepticism should include graphs and tables representing quantitative data. Just because it’s numbers (which imply precision), there is no assurance that there isn’t a manipulative purpose, or sloppy thinking that went into the graphics, perhaps even unwittingly at times.

    Seriously, does it makes sense to attribute blackouts to the sun not shining at night? — Not since the advent of electricity. And it’s all about the electricity here.

    It should also extend to wariness regarding interested parties releasing data only selectively, or not at all (such as on the nature/cause of power plant failure, tripping, or derate). There is usually a reason for such selectivity and/or recalcitrance.

    Also get this, even now: “ERCOT cannot disclose the unit-specific outage causes because they are Protected Information.”

    Gee … Millions of actual people (human needs consumers) had their power shut off to freeze or otherwise fend for themselves and more than 100 died, but the power generating industry that is directly responsible for the failure to perform and meet demand when critically needed must be protected from prying eyes?

    Not to mention being rewarded for their collective failure with $9,000 per MWh that they were able to produce.

    And when ERCOT — even now — doesn’t release the raw data upon which the tables and graphs in the slide show are based, how can we be sure that what’s being reported does even correctly reflect the underlying data? And the data itself is post-fact attribution-of-causes survey data solicited from industry players, and surely has its own problems regarding reliability and bias.

    You can compare it to a “report” on the state of public opinion on an issue where we are not even told what questions were asked of respondents, and what answer options were available.

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