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Do we actually know how to fix the grid?

The evidence is unclear.

Texas lawmakers and experts who study the state’s power grid aren’t thrilled with a proposal by state energy officials aimed at preventing future widespread outages such as the one during the 2021 winter storm.

The Public Utility Commission of Texas last week unveiled a proposal, backed by Chair Peter Lake, that would essentially pay power generators to make sure they have enough reserve electricity to feed the state’s electrical grid in times of extremely high demand. Generators would receive “performance credits” after proving their ability to keep the lights on during those periods — a system that doesn’t exist anywhere else in the world, according to the commission’s consultant.

In the days since, state legislators and energy experts have cast doubts on the proposal, which would cost power customers an additional $460 million yearly, according to the PUC’s estimate. They also questioned the plan’s complexity and the time it would take to implement such a novel system.

“There are huge reliability stakes and huge dollar stakes,” said Alison Silverstein, a former senior adviser at the PUC, which regulates the Electric Reliability Council of Texas, the state’s grid operator. “We need certainty. But there are ways to create certainty without making potentially billion-dollar errors.”

The Texas Legislature last year ordered the commission to overhaul the state’s energy market, which functions mostly off of supply and demand, in the wake of the winter storm. Texas’ electrical grid nearly collapsed as ice and snow blanketed the state. Below-freezing temperatures caused the demand for electricity to surge, triggering widespread power outages that left millions of Texans in the dark without heat for several days. Hundreds of people died as a result.

Power suppliers were allowed to charge sky-high prices for energy as demand spiked during the storm — but frozen equipment meant that they couldn’t meet that demand.

During their first chance to weigh in on potential reforms to the market, lawmakers on a key Senate panel this week made it clear they’re not impressed with the commission’s main proposal.

“This plan is so convoluted, has a long timeline to be put into place, that it’s a set-up for failure for everybody,” state Sen. Donna Campbell, R-New Braunfels, said during a Thursday hearing of the Senate Business and Commerce Committee, adding that the additional costs of the plan will ultimately be paid by power customers.

“The end loser is the end user,” Campbell said.

Senators expressed concerns about making the state’s power customers pay more for an untested system on top of paying off billions of dollars in costs incurred during the storm — costs that energy experts have said Texans will be paying off for decades.

“There was already a wealth transfer that we saw happen [during Uri], probably the largest in the state’s history,” state Sen. Lois Kolkhorst, R-Brenham, said.

I’ve read this story and the Chron story about the same hearing a couple of times, and I’m still not really sure what was on the table here. Part of the reason for this is that PUC Chair Lake rejected the recommendations of the consulting firm they hired, which among other things called for requiring electric providers to buy “reliability credits” from power generators, the idea being that generators would commit in advance to provide enough power during periods of high demand. Given that this kind of robustness was cited as a key problem from last February it at least sounds like a decent starting point. If that’s not the plan, and we don’t care what FERC has to say, then where exactly are we? I don’t know, and it sounds like the Lege doesn’t either. Maybe we should do better about that? Just a thought. TPR has more.

The cryptomining surge in rural counties

Here’s one possible answer to that question I posed the other day.

Jacob Rodriguez was driving a John Deere tractor in a West Texas cotton field when he received a phone call that would change his life.

“I was pulling a 59-foot air seeder … and at the same time I was on the phone having my interview,” Rodriguez, 29, said.

On the other end of the phone early this year were representatives from a new business that was coming to Dickens County, a community of around 2,000 people an hour east of Lubbock.

By March, Rodriguez had quit farming cotton — something he called “just another job” — and began training to work in a cryptocurrency mine.

The county had exactly what London-based Argo Blockchain was looking for: plenty of open land and easy access to affordable power, thanks to a large wind farm built there more than a decade ago.

Texas political leaders have been promoting the state as a destination for companies producing bitcoin and other digital currencies, touting the state’s reputation for low taxes and cheap power. Around 30 have come in the past decade, and dozens more have expressed interest in moving to Texas.

But instead of moving to the state’s large urban areas — which have the extensive infrastructure and large workforce that attracts most relocating companies — cryptocurrency companies have largely done the opposite and located in rural areas, according to Lee Bratcher, president of the Texas Blockchain Council, a group promoting crypto growth and innovation.

Crypto companies have been welcomed by many small towns hungry for an economic boost. Argo Blockchain opened its 125,000-square-foot Helios facility in Dickens County in May and hired a couple dozen locals, including Rodriguez. It has also added $17 million to the local tax base, according to Kevin Brendle, the county judge. The county’s overall assessed property tax value is $283 million, he said.

That economic infusion has allowed Dickens County to cut county property taxes by around 1.5%, give small raises to county staff, and purchase new equipment for the sheriff’s office and for road and bridge improvements.

“The end result is enhanced services to the community,” Brendle said. “We’re going to be able to do a better job of serving them, and we’ll be able to be competitive in our wages.”

In Milam County, northeast of Austin, a large crypto facility owned by Riot Blockchain that opened in 2020 has added hundreds of new jobs and millions of dollars for the local tax base, according to County Judge Steve Young. He said the boost in taxes has allowed the county government to pay for basic services such as road improvements. When the crypto company needed to employ contractors for various projects, it hired locally, he added.

See here for my question. The article notes that the recent crackdown on crypto mining in China has led to opportunities in places like Texas to pick up the slack. The Republican obsession with cryptocurrency and the fact that these places are locating in rural areas makes a lot of sense politically. And of course, as always, there’s this:

Many rural counties are offering crypto companies tax breaks to lure them to their communities. Milam County, which lost its biggest employer — an Alcoa aluminum plant that employed nearly 1,000 people at its peak and closed in 2008 — offered Riot Blockchain a 45% discount on local taxes for 10 years, said Young, the county judge.

“Businesses are typically not going to come to your county unless you’re willing to give them a tax abatement,” Young said.

Crypto companies still add millions of dollars to the local tax base, Young said, and in Milam County, Riot Blockchain also helped rebuild the local animal shelter and installed new lights at local sports fields.

On the other side of the state, Brendle said Argo Blockchain has committed to refurbishing the county-owned public pool, which closed more than a decade ago.

Brendle and Young both said local residents didn’t oppose the new businesses but had lots of questions about cryptocurrency and whether outsiders would flock to their rural counties.

“When they first came here, people had no idea what it was — neither did I,” Young said. “As it’s gone forward, the county as a whole has started to get a grasp of what’s going on and clearly appreciates the fact that they’re out there providing jobs, enhancing county services, hiring local contractors for the most part and spending a ton of money here. It’s a huge benefit to the county.”

Dig down far enough, there’s always a tax break. Look, I hope this works out well for these communities. Rural Texas has been losing population for a variety of reasons, and they could use the economic boost. I remain skeptical of cryptocurrency as a long-term endeavor, and I remain very worried about the demand it puts on our power grid, but there’s not much I can do about that. All I can say is that the last Big Economic Thing that happened in rural Texas was the private prison industry, and I really hope this turns out better all around than that. You’ll forgive me, I hope, if I will need to see it to believe it.

NOTE: This is the time of year when I clear out some posts that have been sitting in my Drafts while other more important news items got blogged about. This one was from early October, well before the crash of FTX. I’ll have a separate post about that shortly; the news hook for that is what prompted me to finally publish this one.

By the way, the grid is still not fixed

In case you were wondering.

A federal assessment indicates the Texas electricity grid remains almost as vulnerable to extreme winter weather as it was when it nearly collapsed during a prolonged deep freeze in February 2021 — although state utility regulators contend the analysis is flawed.

“The (Federal Energy Regulatory Commission) report contained inaccuracies and ERCOT has called on the agency to correct the report,” said Rich Parsons, a spokesperson for the Public Utility Commission of Texas.

The Public Utility Commission oversees the Electric Reliability Council of Texas, which manages the state’s power grid.

Mary O’Driscoll, a spokesperson for the Federal Energy Regulatory Commission, released an updated version of the agency’s assessment late Tuesday, but it drew the same conclusion as the original version dated Oct. 20 in terms of a potential shortfall during extreme winter conditions.

According to the document, the ability of the ERCOT grid to handle extreme winter weather along the lines of what hit the state in February 2021 appears to be only marginally better, despite more than 18 months of effort to make the grid more dependable — as well as assurances from state regulators, and from Gov. Greg Abbott, that it is significantly improved.

Consumer demand for electricity on the Texas grid could exceed available generation capacity by 18,100 megawatts under a winter scenario similar to what triggered the 2021 disaster, the report says.

[…]

The federal assessment indicates the ERCOT grid will have more than enough generating capacity this winter under typical weather conditions.

“Basically, what (the federal energy commission) is saying is if we get weather conditions like in February ’21, we would have close to a repeat of what happened,” said Doug Lewin, president of Austin-based energy consulting company Stoic Energy.

The federal agency “is sounding the alarm very clearly,” Lewin said. “The risk that existed (in February 2021), for all intents and purposes, is about the same heading into this winter.”

FERC had issued an initial report last November that criticized the lack of weatherization in the grid. I was unable to locate a copy of this report, but I’m sure it will turn up online. To be sure, we don’t expect weather conditions this winter to be like what we got in February 2021. But we didn’t really expect that either – at least, I’d say that while most of us knew it was going to be colder than usual, we were blithely unaware of the disaster potential – and we know from recent history that sooner or later another storm like that is going to pass through. As was the case following the 1989 and 2011 storms, it’s just a matter of whether we did anything about it. So far, not so much.

Tell me again why we’re encouraging all these crypto-miners to come to Texas

Seriously, what are we doing here?

Cryptocurrency miners are accelerating their push to expand in Texas far beyond what authorities had initially expected, threatening to send the state’s electricity use skyrocketing.

Enough miners have applied to connect to Texas’s power grid to use up to 33 gigawatts of electricity, the Electric Reliability Council of Texas, which runs the system, said in an email Friday. That’s a third more than what the grid operator’s chief executive officer said in April that officials were preparing to handle over the next decade. It’s also enough to power all of New York State.

A spokeswoman for the grid operator, known as ERCOT, said officials expect to have enough power plants available to meet any rise in demand. The miners will need approval from ERCOT before connecting to the grid.

The surging interest underscores how appealing Texas remains to crypto miners, even as the value of Bitcoin has plunged more than 50% in the past year. And while many of those miners may never actually set up shop, the sheer number applying raises questions over whether the state’s grid, which collapsed during a deadly 2021 winter storm, will be able to meet the demand for electricity.

Crypto miners currently account for about 1.2 gigawatts of electricity demand in Texas, according to the Texas Blockchain Council, which represents miners. That’s enough to power about 240,000 homes. Over the past four months, the number of miners applying to plug into the grid has doubled.

The state has aggressively recruited miners, touting its cheap power, abundant renewable energy and business-friendly regulatory environment. Texas has some of the cheapest electricity rates for big consumers, averaging about 7.57 cents per kilowatt-hour in June, a third lower than the national average, according to the U.S. Energy Information Administration. It also has more wind power than any other state, which is appealing to miners pushing to appear more environmentally friendly.

In April, ERCOT’s interim CEO Brad Jones said he was working with miners to prepare the grid to handle about 25 gigawatts of crypto demand over the next decade. When asked if Texas aims to be the world’s largest mining center, he replied: “Yeah, that’s what we are planning.”

See here for some background. This story is from about a month ago, and it was the publication of another crypto story in the Trib that spurred me to finally hit publish on it. My main question is simply “Why?” What are we getting out of this? I’ll come back to that in the next crypto post. Yahoo News has more.

Beto still seeking to dismiss oligarch’s lawsuit against him

Might have better luck this time around.

Remember last year when Gov. Greg Abbott’s biggest donor sued gubernatorial candidate Beto O’Rourke for defamation, slander, and libel? Well, that’s still going on.

The legal fight has moved into a state appeals court, where O’Rourke is seeking to dismiss Kelcy Warren’s defamation lawsuit or remove the case from the energy executive’s county of choice.

Warren sued the Democrat in February, alleging that O’Rourke is trying to “publicly humiliate him and discourage others from contributing to Gov. Abbott’s campaign.”

[…]

Last month, a judge in San Saba County rejected O’Rourke’s request to dismiss the lawsuit.This week, O’Rourke made the same request to the Austin-based 3rd Court of Appeals, arguing that he exercised his free speech rights protected by the Texas Citizens Participation Act.

The state law protects against retaliatory lawsuits that seek to intimidate or silence speakers on matters of public concern.

“This is a frivolous abuse of the judicial system to silence political debate,” O’Rourke’s appeal said. “O’Rourke’s colloquial use of sharp words to describe a gas industry billionaire making a $1 million contribution days after the governor signed legislation containing a loophole favoring the gas industry is protected political speech and is not defamatory.”

On Wednesday, O’Rourke filed a second appeal at the 3rd Court, which argues that if the lawsuit was allowed to continue, it should be moved from San Saba County.

See here, here, and here for the background. I saw a story about the initial rejection of the motion to dismiss last month, but it was a super busy news time and I didn’t get around to noting it. I still think there could be political value in just going straight to discovery and depositions on this, but I also think Beto will win on his motions, and that that is the more prudent course of action. I will continue to watch this space. The Statesman has more.

We’re going to have a “colder than normal” winter

What could possibly go wrong?

Make your Cancun plans now

Savor the rest of the sweltering summer because this winter in Texas is going to be “colder than normal,” according to Farmers’ Almanac.

The Almanac, which has been predicting the weather outlook for farmers and gardeners for over 200 years, says to expect a “chilly” winter with “normal precipitation.” Cold temperatures are expected to arrive in the South in mid-to-late November, mid-to-late December, and early and late January.

The Farmers’ Almanac previously predicted Texas’ deadly winter storm in 2021, in which heavy snowfall, ice storms and bitter temperatures put an enormous strain on the state’s power grid, leaving millions without electricity. Over 200 people died.

For this year, North Texas could see the most potential for snow and ice storms throughout the season. The Almanac says that heavy snowfall is expected to reach North Texas by the first week of January, followed by “significant snows” from North and Central Texas by the second week.

While this winter “will be filled with plenty of shaking, shivering and shoveling,” most of the cold weather is expected to “rattle warm weather seekers in the Southeast and South Central states, but the real shivers might send people in the Great Lakes area, Northeast, and North Central regions hibernating.”

There are a lot of qualifiers to this: The Farmers Almanac forecasts are not necessarily accurate. Other forecasters have not yet made their predictions, so this one might be an outlier. That 2021 storm really was an unusual event. But look, we know that basically nothing was done to address the power grid failures from that year, and at this point we know how bad it can get. There’s every reason to feel anxiety about this, no matter what ends up happening. That’s as much a failure as the inaction on the grid itself is. And it’s on Greg Abbott.

When we say “fix the grid”…

This is one of the obvious ways we could attempt to do that.

Photo from Wikimedia Commons

The state’s High Plains region, which covers 41 counties in the Texas Panhandle and West Texas, is home to more than 11,000 wind turbines — the most in any area of the state.

The region could generate enough wind energy to power at least 9 million homes. Experts say the additional energy could help provide much-needed stability to the electric grid during high energy-demand summers like this one, and even lower the power bills of Texans in other parts of the state.

But a significant portion of the electricity produced in the High Plains stays there for a simple reason: It can’t be moved elsewhere. Despite the growing development of wind energy production in Texas, the state’s transmission network would need significant infrastructure upgrades to ship out the energy produced in the region.

“We’re at a moment when wind is at its peak production profile, but we see a lot of wind energy being curtailed or congested and not able to flow through to some of the higher-population areas,” said John Hensley, vice president for research and analytics at the American Clean Power Association. “Which is a loss for ratepayers and a loss for those energy consumers that now have to either face conserving energy or paying more for the energy they do use because they don’t have access to that lower-cost wind resource.”

And when the rest of the state is asked to conserve energy to help stabilize the grid, the High Plains has to turn off turbines to limit wind production it doesn’t need.

“Because there’s not enough transmission to move it where it’s needed, ERCOT has to throttle back the [wind] generators,” energy lawyer Michael Jewell said. “They actually tell the wind generators to stop generating electricity. It gets to the point where [wind farm operators] literally have to disengage the generators entirely and stop them from doing anything.”

[…]

Wind energy is one of the lowest-priced energy sources because it is sold at fixed prices, turbines do not need fuel to run and the federal government provides subsidies. Texans who get their energy from wind farms in the High Plains region usually pay less for electricity than people in other areas of the state. But with the price of natural gas increasing from inflation, Jewell said areas where wind energy is not accessible have to depend on electricity that costs more.

“Other generation resources are more expensive than what [customers] would have gotten from the wind generators if they could move it,” Jewell said. “That is the definition of transmission congestion. Because you can’t move the cheaper electricity through the grid.”

A 2021 ERCOT report shows there have been increases in stability constraints for wind energy in recent years in both West and South Texas that have limited the long-distance transfer of power.

“The transmission constraints are such that energy can’t make it to the load centers. [High Plains wind power] might be able to make it to Lubbock, but it may not be able to make it to Dallas, Fort Worth, Houston or Austin,” Jewell said. “This is not an insignificant problem — it is costing Texans a lot of money.”

Some wind farms in the High Plains foresaw there would be a need for transmission. The Trent Wind Farm was one of the first in the region. Beginning operations in 2001, the wind farm is between Abilene and Sweetwater in West Texas and has about 100 wind turbines, which can supply power to 35,000 homes. Energy company American Electric Power built the site near a power transmission network and built a short transmission line, so the power generated there does go into the ERCOT system.

But Jewell said high energy demand and costs this summer show there’s a need to build additional transmission lines to move more wind energy produced in the High Plains to other areas of the state.

Jewell said the Public Utility Commission, which oversees the grid, is conducting tests to determine the economic benefits of adding transmission lines from the High Plains to the more than 52,000 miles of lines that already connect to the grid across the state. As of now, however, there is no official proposal to build new lines.

Sure would be nice to have such a proposal, wouldn’t it? That’s a thing that the Governor and the Legislature could make happen if they wanted to. Unfortunately, a lot of them don’t want to, and of course Greg Abbott is incapable of taking any positive action. So here we are, with those of us too far away from the existing turbines to benefit from them looking longingly at the Gulf of Mexico for some future relief. I don’t know how much it might cost to build out the transmission network (the story doesn’t say), or to invest in battery storage for solar energy (another thing we’re good at generating in this state, as noted in the story), but I’m sure we could find the money if we wanted to. First, though, we have to want to. And that means electing people who want to. Because we don’t have that now.

Offshore wind farm proposed

Let’s do it.

The Gulf of Mexico’s first offshore wind farms will be developed off the coasts of Texas and Louisiana, the Biden administration announced Wednesday, and together they’re projected to produce enough energy to power around 3 million homes.

The wind farms likely will not be up and running for years, energy analysts and the state’s grid operator said, but the announcement from the U.S. Interior Department is the first step in ramping up offshore wind energy in the United States, which has lagged behind that of Europe and China. The only two operating offshore wind energy farms in the U.S. are off the coasts of Rhode Island and Virginia, which together produce 42 megawatts of electricity — enough to power fewer than 2,500 homes.

One of the new wind projects announced Wednesday will be developed 24 nautical miles off the coast of Galveston, covering a total of 546,645 acres — bigger than the city of Houston — with the potential to power 2.3 million homes, according to the U.S. Interior Department’s Bureau of Ocean Energy Management. The other project will be developed near Port Arthur, about 56 nautical miles off the coast of Lake Charles, Louisiana, covering 188,023 acres with the potential to power 799,000 homes.

“It’s exciting to see offshore wind in the Gulf getting closer to reality,” said Luke Metzger, executive director of Environment Texas, an environmental protection group. “With strong winds in the evenings when we need energy the most, offshore wind in the Gulf of Mexico would greatly complement Texas’ onshore renewable energy resources, help bolster our shaky electric grid and help our environment.”

[…]

“Offshore wind has a great potential in Texas,” Brad Jones, president of the Electric Reliability Council of Texas, which manages Texas’ main power grid, told The Texas Tribune on Thursday. “It will take some time to develop, and that time will be based on how quickly we can put together port facilities, the specialized ships that are necessary and train our labor force to achieve this type of development. It is new for the U.S.”

I suppose it’s a sign of the times that when I read stories like this I go looking for the bit where Ken Paxton threatens to file a lawsuit to stop it. I may need therapy. No mention of any such action in this story, or in the Chron story that has a few more details.

The wind energy area proposal is still just a draft, the bureau said. Visitors to its website can comment on the plans, and the bureau will hold online public meetings Aug. 9 and 11 to discuss the proposals.

“Once the final wind energy area or areas have been identified, the next step is to propose a lease sale for public comment either later this year or early next year,” said John Filostrat, a spokesman for BOEM’s Gulf of Mexico office.

The bureau said state officials and wind developers would determine if electricity generated in the areas’ boundaries would flow to the Texas power grid or the neighboring East Coast grid system. The Coast Guard would determine if commercial or recreational boats — including commercial fishing and shrimping operations — could enter the waters near the wind turbines, bureau officials said, adding that they have held several meetings with fishing groups and associations this year.

As a result, they said they have already carved out parcels from the lease area to leave bare for shrimping operations to continue.

[…]

Wind power along the Gulf Coast tends to be strongest south of Corpus Christi, tapering off by the time it reaches Florida, according to a bureau study.

Even so, the Gulf of Mexico has a leg up on the competition, said Josh Kaplowitz, vice president of offshore wind for the American Clean Power Association. The region is home to an entire supply chain dedicated to offshore energy and a trained workforce. Already, he said, a massive wind turbine installation vessel is being built in Brownsville.

“The Gulf of Mexico has a head start, and we should be leveraging that,” he said. “Wind turbine technology is getting better. They’re getting larger, and as they get larger they can be built in a more economical way at lower wind speeds.”

One issue more pressing for Gulf turbines than those in other offshore areas is the potential for strong hurricanes. Kaplowitz said the turbines off Rhode Island and those designed for off the coast of North Carolina have been engineered to withstand hurricane-force winds. He said those built off the Texas coast would likely be designed to withstand winds of the strongest storms projected to hit that part of the coast.

Offshore wind turbines have yet to be tested in such a ferocious storm, Andy Swift, associate director of education with Texas Tech’s National Wind Institute, told the Chronicle in October. Turbines onshore have suffered catastrophic damage in tornadoes, he said, requiring companies to take out large insurance policies on them. That could also be the case in the Gulf, he said.

“The storm issue — it’s a big one. I think people are looking at building more hurricane-resistant turbines as much as they can to stand against the high winds continually buffering of equipment, with waves and winds gusting against it,” Swift said in October. “I think that’s a challenge for offshore.”

The BOEM’s press release about this is here, and it points you to this page for info about public meetings and providing feedback. This is likely the start of a ten-year process, so settle in and make yourself comfortable. Assuming there isn’t already a national injunction against it issued by some cretinous Trump judge in Lubbock or something. Did I mention that I need help?

I’m sure they’ll evaluate themselves objectively

What could possibly go wrong?

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.”

[…]

When the PUC, which regulates public utilities in Texas and oversees ERCOT, sought companies to provide an independent analysis of the market proposals, only two responded: E3 and Potomac Economics, an independent market monitoring service out of Fairfax, Va.

Potomac monitors ERCOT to ensure companies don’t cheat in the wholesale power market, where power producers compete to supply the cheapest electricity.

Silverstein, the energy consultant, said unlike E3, Potomac cannot receive money from power generators or retailers because of its independent status.

Ed Hirs, an energy fellow with the University of Houston, said the requests for proposals for the independent analysis was written in a way that may have worried some analysis firms. He said it looked like the PUC was looking for a rubber stamp, a concern he said is also reflected in its contract with E3.

E3 told the PUC about its work with NRG and Exelon during the solicitation process, according to the contract, but noted that the relationship had “been terminated prior to signing this contract.”

I feel like if someone wanted to do a modern-day version of The Best Little Whorehouse in Texas, you could quite reasonably work the entire ERCOT/PUC freeze-and-post-freeze saga in as a subplot for the Governor, though you might have to tone it down a bit so it doesn’t come off as too ridiculous. Jokes aside, the obvious solution to this particular situation is to simply disqualify E3’s proposal from consideration. There’s no conflict of interest problem if E3 isn’t being asked to judge themselves. It’s so simple that of course we’ll never do it. But since I brought up TBLWiT, here’s the video of the song you now have in your head:

You’re welcome, and may God forgive me.

Sure hope our grid can handle a bunch of crypto

I have three things to say about this.

With interest surging in digital currencies and the blockchain technology behind them, more and more investors and operators are turning to Texas, lured by its cheap energy and hands-off regulatory approach. The rush, like those underway in Wyoming, South Dakota and other states, has been welcomed by energy executives and some elected officials who see it as a catalyst for job growth and tax revenue.

But it is also adding massive new demand to the state’s fragile electricity grid and putting pressure on legislators to harness the growth in ways that are sustainable — and that don’t price out residential consumers.

The Energy Reliability Council of Texas, which manages the state’s grid, is projecting that the explosion in cryptocurrency and other “large load” operators could bring as many as 16 gigawatts of new electricity demand by 2026. That’s about a quarter of the grid’s current capacity and enough to power over 3 million homes on a summer day.

“I don’t think anybody thinks all of that will be built, but it’s still a tremendous amount,” said Cyrus Reed, conservation director for the Lone Star Chapter of the Sierra Club.

For a state that failed so spectacularly to secure the power supply during last year’s winter blackouts, piling on more demand will be a critical new test, especially in the face of climate change. Last week alone, unseasonably high temperatures drove electricity demand to midsummer levels. Late Friday, the state asked Texans to conserve power after six natural gas-fired power plants tripped offline.

Leaders in the crypto industry say their entrance will improve reliability by bringing uniquely flexible loads — often sprawling, power-hungry data warehouses — that can shut down within minutes and put electricity back on the grid when demand peaks.

[…]

Joshua Rhodes, a researcher at the University of Texas at Austin who has consulted for a crypto mining company, said the same hallmarks of the state’s deregulated electricity market that helped lead to such growth in wind and solar over the past two decades could make it hard for leaders to rein in bad actors.

“They have the ability to be part of the energy transition that we need, but I’m becoming less convinced that the majority of them care enough to do it,” Rhodes said of the industry.

Any new regulation will have to wait until next year’s legislative session. Last cycle, the House and Senate set up a study group that includes two Republican members and the president of the Texas Blockchain Council, a trade group whose lobbyist is a former top aide to Republican Gov. Greg Abbott. The group will meet to take public testimony this month.

Rep. Tan Parker, R-Flower Mound, has been leading the crypto push in the House. He said his focus is on helping the industry grow with minimal restrictions and on ensuring there is enough power to meet demand, including new generation from fossil fuels and possibly nuclear power.

“It’s all about creating a level playing field so that folks know what the rules of engagement are, and therefore can be successful,” Parker said.

If new rules are on the way, many in the industry aren’t worried that they’ll stifle growth.

“We just had a gubernatorial race where we had three candidates tripping over each other to be the most bitcoin candidate there was, so I don’t see regulation coming now,” Griffin Haby, co-founder of Limpia Creek Technologies, told attendees at a crypto conference last month in Houston, referring to the Republican Party primary. “But you never know.”

1. This story weirdly does not mention the utter mess that the crypto market is in right now. I’m hardly a crypto expert, and things change quickly over there, so one might simply say that it’s all a bit of minor turbulence that will have no effect on the longer term projections. Fair enough, but the volatility of the market, the zeroing out of some entire currencies, the huge loss of investors’ capital, you’d think it would have at least merited a sentence or two.

2. We all know that the Republicans will do absolutely nothing to bolster or protect the grid as they roll out the red carpet for coinminers. They did nothing after the freeze last year, so it would be delusional to think they’ll do anything here. Maybe those “large load” operators will come swarming in, and maybe the coinminers themselves will have a bit of civic responsibility. That’s about the best you can hope for as long as the Republicans are in charge.

3. It’s going to be a long, hot summer. Forget the future projections, hope that the grid doesn’t crap out on us tomorrow or next week or (God forbid) in August.

How much is Greg Abbott sweating right now?

I hope it’s a lot. It should be a lot.

With temperatures soaring statewide, Gov. Greg Abbott is scrambling to reassure Texans he’s closely monitoring the state’s shaky electric grid as other GOP officials vow to get back to work fixing a system many, including Abbott, declared they had repaired after deadly outages during last year’s winter storms.

An hour after high-level meetings with Abbott, the state’s electricity monitor warned the public that six power plants had failed, forcing the state to call on Texans to reduce air conditioning usage and watch their energy consumption through the weekend. Electric Reliability Council of Texas did not disclose which units had gone offline or when they’d be back up.

ERCOT data showed demand for power in Texas was projected to be within 2,000 megawatts of the total supply by mid-afternoon on Saturday, triggering the conservation alert. Typically the state has a much bigger cushion. When operating reserves drop below 1,750 megawatts for more than 30 minutes, ERCOT can interrupt power for large industrial customers and can call for rotating blackouts if reserves drop to 1,000 megawatts. A megawatt is about enough electricity to power 200 homes on a hot day.

Peak demand on the grid was expected between 5 and 6 p.m on Saturday.

Abbott, who said last June that lawmakers did “everything that needed to be done” for the grid, released a photo of himself on Friday, meeting with officials from ERCOT and the Public Utilities Commission in his office just over an hour before the conservation warning was sent out.

“We continue to work closely to ensure Texas’ power grid remains reliable & meets the needs of Texans,” Abbott said.

[…]

Democrat Beto O’Rourke has been blistering at rallies, reminding voters that more than 700 Texans died, by some estimates, when the grid failed in 2021 during the winter storms. Lawmakers had been repeatedly warned that the power grid needed reforms, but those warnings had largely been unheeded until millions of Texans were left without power during the record freezing temperatures last winter.

O’Rourke has been campaigning on forcing more weatherization requirements on energy providers and connecting the Texas grid to the national grid to ensure the state can tap into national emergency supplies when needed, something Republicans who control the Legislature have declined to do.

On Friday, he blasted Abbott for waiting until after 5 p.m. on Friday to make ERCOT put out their conservation alert, even though he had been meeting with them well before that.

“He doesn’t want Texans to know that he STILL can’t keep the power running in the energy capital of the world,” O’Rourke said on Friday after the ERCOT alert went out.

By the time you read this, the worst is likely to be over, and maybe there haven’t been any power outages resulting from the extra demand on the grid. But you know, it’s not even halfway through May yet. There will be more opportunities for us to be told to turn the A/C down as the temperatures creep up towards 100. Maybe if Greg Abbott had spent some of that federal COVID relief money on fixing the grid instead of having the National Guard write jaywalking tickets we’d be better off now.

Here are some tweets to sum it up:

The classics always have something to say to us.

More on the oligarch suing Beto

From the Observer; I’m picking it up after the initial statements by Beto that got Kelcy Warren’s undies in such a wad:

Free-speech advocates and many legal scholars have long decried these sort frivolous lawsuits—known as SLAPPs, or Strategic Lawsuits Against Public Participation—as a blatant abuse of the country’s legal system by powerful and wealthy people and corporations in an attempt to silence outspoken activists, critical reporters, and rivals alike.

“Kelcy Warren is far from the first billionaire to file a lawsuit against someone who says something they don’t like. … And even though they’re highly unlikely to succeed on the merits, they file them anyway,” Evan Mascagni, policy director for the anti-SLAPP advocacy group Public Participation Project, told the Observer.

“SLAPP-filers don’t go to court to seek justice. Rather, they file these meritless lawsuits to silence, harass, and intimate their critics. Defending against a meritless lawsuit can cost tens or even hundreds of thousands of dollars and clog up the court system for years while at the same time having a chilling effect on the writer or speaker.”

With one of Abbott’s top donors going directly after his political ally’s opponent, Warren’s lawsuit marks an unprecedented incursion into Texas politics—one that is likely to only further elevate the mega-donor’s role in the most high-profile election this year. It seem to be an unwelcome move for Abbott, whose campaign promptly issued a statement saying that it had no involvement with the suit. O’Rourke, meanwhile, is spoiling for the fight—and has doubled-down in his rhetoric in the wake of the lawsuit. Earlier this month, O’Rourke compared Abbott to Russian President Vladimir Putin, calling him an “authoritarian” and a “thug,” and said, “he’s got his own oligarch here in the state of Texas”—an apparent reference to Warren.

The law firm—Kasowitz Benson Torres—that Warren hired to take on O’Rourke is notorious for aggressively litigating these types of suits on behalf of its powerful clients, including his company, Energy Transfer Partners. The firm’s founder, Marc Kasowitz, was also the longtime attorney for the infamously litigious former President Donald Trump.

[…]

While it’s not clear if O’Rourke will ultimately file a motion to get the suit tossed, experts say the state’s anti-SLAPP law was created for cases like these.

“My general impression of the lawsuit is that it’s very much subject to dismissal under the TCPA,” Lane Haygood, an Odessa-based lawyer who has worked on free-speech cases in the state, told the Observer.

“The statements that could survive [an anti-SLAPP dismissal] are the ones that get closest to accusing Mr. Warren of committing a specific crime,” Haygood added. “There are a couple of times that O’Rourke uses words like extortion or bribery, which are defined crimes under the Texas Penal Code. But they are also rhetorical shorthand and hyperbolic, and so in context, Texas courts are generally likely to hold that such language is not specific enough to be actionable defamation. It is the difference between saying ‘John Smith assaulted me on September 4, 2021,’ and ‘John Smith is a bully who beat me up.’ ”

O’Rourke has dismissed Warren’s claims as blatantly frivolous, saying that everything he’s said is based on publicly available facts and media reports. So far, he’s indicated that he wants to let the case play out—paying for any legal costs with campaign funds. This week, his attorneys filed motions to change the venue of the lawsuit to a court in his home of El Paso County and called for a trial by jury.

Under the state’s anti-SLAPP law, O’Rourke has 60 days from the date he was served—February 28—to file a motion to dismiss. It’s not uncommon for attorneys to wait until the deadline to do so in case the defendant files an amended petition, Haygood said.

Or O’Rourke may see the public spectacle of this lawsuit as a political gift that’s well worth going to court over—especially since his ample campaign funds should easily cover the legal costs of a drawn-out legal battle.

See here and here for the background. Beto has basically until the end of April to file a motion for dismissal, which is still the legally sound strategy. Politically, though, it likely makes more sense to say “bring it”, and start filing tons of motions for discovery. I have no idea what Beto will do, but I’d love to sit in on his next call with the lawyers.

Beto responds to oligarch’s lawsuit

Game on.

Democrat Beto O’Rourke is blasting a pipeline company executive and top donor to Greg Abbott’s re-election campaign for filing a defamation lawsuit against him as he tries to unseat the two-term Republican governor.

O’Rourke’s attorney filed a legal response to the suit in San Saba County on Monday saying it lacked any factual or legal grounds and that O’Rourke denies all the allegations made by Kelcy Warren, a major Abbott donor.

O’Rourke is also asking for a trial by jury. He calls Warren’s lawsuit an attempt to stop him from talking about the role pipeline companies like Warren’s played in causing power outages during the February 2021 freeze that killed over 200 Texans, by the state’s count.

“But no matter how much money they have, or how hard they try to silence me in the courts, I will never back down from standing up for the people of Texas,” O’Rourke said.

[…]

Since 2019, Warren has given Abbott $1.25 million, making him one of Abbott’s top four financial backers for his re-election campaign.

Warren, from Dallas, is chairman of the board at the gas pipeline company Energy Transfer Partners and its former CEO. Abbott over the years has appointed Warren to high-profile boards and commissions — Warren is a member of the University of Texas Board of Regents and was previously a member of the Texas Parks and Wildlife Commission.

Warren’s lawsuit alleges that O’Rourke is trying to “publicly humiliate Warren and discourage others from contributing to Gov. Abbott’s campaign.”

“What Mr. Warren is interested in stopping are the irresponsible, defamatory and highly offensive statements by Mr. O’Rourke related to his donation to Gov. Abbott’s campaign,” says a statement from Energy Transfer Partners.

See here for the background, and look deep in your heart for all the sympathy you can muster for this poor, maligned, misunderstood billionaire who only wanted to get an exorbitant return on his investment. Is that so much to ask?

Some details, for the lawyers:

From that first document:

The Plaintiff sued O’Rourke for defamation, and claims venue is proper (indeed, mandatory) in San Saba County because he resided here when the allegedly defamatory statements were made. Original Petition, ¶ 10 (citing Tex. Civ. Prac. & Rem. Code §15.017).

This claim is untrue. Although the Plaintiff does effectively control some real property in San Saba County, most of it is: (1) undeveloped; and (2) held in the name of an entity that the Plaintiff controls, not the name of the Plaintiff. The evidence shows the Plaintiff in fact lives in Dallas County, Texas, where his homestead is located, where he is registered to vote and where he actually, physically resides. Because the Plaintiff has Filed suit in a county other than a county of mandatory venue, the Court must grant this Motion to Transfer Venue and order the suit to be transferred to El Paso County, Texas, the county of O’Rourke’s residence.

And from the second:

Without waiving the right to plead further, Defendant specially excepts to the remainder of Plaintiff’s claims because Plaintiff has failed to assert factual and legal grounds for recovery against the Defendant under Texas law, or any other applicable law, for the remainder of his purported causes of action. The Defendant requests that Plaintiff be ordered to replead to state a legally actionable cause of action within a specified reasonable time and, upon Plaintiff’s failure to do so, that Plaintiff’s claims against the Defendant be dismissed.

I Am Not A Lawyer, but I’m pretty sure that’s fancy lawyer-speak for “This whole thing is bullshit”. You love to see it. I hope this is giving Greg Abbott indigestion. The Daily Beast has more.

One of Abbott’s billionaire patrons just sued Beto

OMG, this is amazing.

The former CEO of one of the nation’s biggest pipeline companies and a major donor to Gov. Greg Abbott is suing Democrat Beto O’Rourke for defamation, slander, and libel for talking about his company’s role in the 2021 Texas winter storm and referring to the executive’s subsequent donations to Abbott’s re-election as “pretty close to a bribe.”

Kelcy Warren, who was a top executive at the gas pipeline company Energy Transfer Partners, filed suit against O’Rourke in San Saba County, seeking more than $1 million in damages from O’Rourke, claiming he is trying to “publicly humiliate Warren and discourage others from contributing to Gov. Abbott’s campaign.”

O’Rourke on Monday responded with a press conference just 5 miles from Energy Transfer Partners’ headquarters in Dallas calling the lawsuit “frivolous” and aimed at trying to stop him from telling the truth about what happened before and after the deadly storms on Abbott’s watch.

“He is trying to stop me from fighting for the people of Texas,” O’Rourke said. “And just as we did before, we are not backing down right now.”

For months, O’Rourke has been blasting Abbott for accepting a $1 million contribution from Warren after the Texas power grid failure during the storm. The Wall Street Journal has reported that Energy Transfer Partners made an additional $2.4 billion last year when the state’s grid manager pushed power prices sky-high to end rolling blackouts. The freeze killed more than 200 people by the state’s estimate and resulted in billions in property damages.

O’Rourke said all he’s done is “connect the dots” for people so they see how Abbott received generous donations from companies that profited on the winter storms.

During a campaign stop in San Antonio last month, O’Rourke said energy companies have essentially paid off Abbott for not being more aggressive and holding them accountable.

“That’s pretty close to a bribe by any definition that I’m familiar with,” O’Rourke said in San Antonio, though he did not call out Warren by name.

Warren also took issue with O’Rourke retweeting a story from Dallas ABC affiliate WFAA in January which details how another energy company, Luminant Corp., had filed a complaint against Energy Transfer Partners with the Texas Railroad Commission. Luminant says in the complaint that Energy Transfer Partners threatened to shut off gas supply to the company unless it paid $22 million in fees connected to the 2021 storms. O’Rourke retweeted the story, with a comment: “That’s extortion.”

In the court filing, Warren’s attorneys argue that O’Rourke’s heated rhetoric has been damaging to “Warren’s reputation and exposed him to public hatred, animus, contempt or ridicule, or financial injury.”

See here and here for some background. A copy of the complaint is here. I almost don’t know where to begin with this. Well, okay, how about what an absolute whiny crybaby snowflake? Did that mean ol’ Beto hurt your widdle fee-fees? Poor, poor, obscenely wealthy baby.

I Am Not A Lawyer, so I’m not going to pretend I know what the likelihood of success for poor downtrodden Kelcy Warren is. I do know that it’s likely months before this ever sees the inside of a courtroom, and if it somehow manages to survive a motion to dismiss it could be a couple of years before we get to the deposition and pretrial hearing stages. But suppose we were to have the lawyers on each side begin the discovery process right now. Who do you think would be more nervous about it, Beto or Abbott? I kind of don’t think Beto will have much to hide. How many emails and texts between Abbott and Warren do you think they might find?

I mean, has anyone introduced ragtag man of the people Kelcy Warren to the Streisand Effect? What better way to make sure that Beto’s main campaign theme is a topic for every local news station to cover on a regular basis? I’ve already seen tweets to this effect, but my first reaction was that Beto is going to have to list this lawsuit as an in-kind donation to his campaign on the July finance report. You literally can’t buy this kind of publicity.

I guess most of us will never understand the pain and suffering and angst and ennui of common folk like Kelcy Warren. We should be grateful to him for performing this service for us. May we come to know him and his inner turmoil much more intimately now. The Trib, who so insensitively refers to Warren as an “oil tycoon”, has more.

Create your own power grid

Two words: Solar panels.

For nearly eight hours one day in late January, the power to Sam Bryan’s house blinked off after a transformer near his greater Third Ward lot blew a fuse.

The same transformer has long had issues, he said, leading to blackouts at Bryan’s house and those of his neighbors several times a year. But in January, Bryan’s lights stayed on, thanks to 43 photovolatic solar panels bolted onto his roof and a battery system stored in his garage. Instead of comforting his 4-year-old, who had grown anxious during power outages since the freeze of February 2021, they played a game.

“It was a pretty neat experience,” he said. “Part of the fun was that I don’t have to explain why we can’t turn the lamp on.”

Bryan is among thousands of Texans who have turned to solar power and battery storage, creating so-called microgrids, as a solution to blackouts. With a venture creating the same little power plants for apartment buildings, Texas has become a national leader in residential solar power installations.

From 2019 to 2020, small-scale solar capacity in Texas grew by 63 percent, to 1,093 megawatts from 670 megawatts, according to the Energy Information Administration. In the first three quarters of 2021, another 250 megawatts of residential solar were installed in the state, according to the Solar Energy Industries Association. In last year’s third quarter alone, Texas ranked second behind California in the amount of power from new installations during the period, the industry’s Washington, D.C. trade group said.

[…]

Rooftop solar systems and other residential generators like those powered by diesel or batteries can create microgrids to power an individual house or be linked to others in a neighborhood. They can operate as part of the main power grid — like the one managed by the Electric Reliability Council of Texas that almost collapsed last year — or they can disconnect and be managed autonomously during a power outage.

The flip of a switch can disconnect a microgrid from the larger utility, says Stephen Bayne, department chair of electrical and computer engineering at Texas Tech University. It can be as simple as a breaker in a garage or a computer system that automatically disconnects from the grid when there’s a disruption. More advanced microgrid systems, sometimes known as virtual power plants, can track usage, generation and battery storage across multiple buildings. It also prevents the microgrid’s power from flowing to the wider grid during emergencies.

“So let’s say the grid has to turn off for some reason, say in Houston you had flooding and part of grid is underwater, but not a certain community,” Bayne said. “That area could still lose power for days, but if the community had a microgrid, it could disconnect and use a diesel generator, battery storage, solar — it could keep grid going, or at least keep critical loads going for a while.”

Sounds pretty good, no? The main obstacle is the up-front cost, which can be in the mid-to-high five figures, though federal tax incentives can bring it down some. You do get much lower utility bills, which pays you back over time, but if you can’t spend fifty or sixty grand for the panels and the battery equipment, this won’t be for you. We need to think about some creative ways to defray those initial capital costs for homeowners, so more people can do this.

More on Abbott’s involvement in “getting the power back on”

Also known as more from the Brazos Electric Power Co-op lawsuit against ERCOT, but that didn’t fit well in the title.

The former chair of the Texas Public Utility Commission testified in court Thursday that during last year’s winter storm and blackout Governor Greg Abbott had ordered her to ride out to the power grid control room in Taylor with one of his top advisers.

DeAnn Walker, who resigned in the political fallout of the blackout, said Abbott told her to, “get the power back on” and keep it on and had a state game warden drive her out to the control room.

“He told me to go out to the Taylor facility and to figure out a way to get the power back on to all the customers and to not go back into rolling outages,” she said in federal bankruptcy court in Houston.

[…]

The utility commission originally ordered power prices to the $9,000 cap on Feb. 16, as power plants began freezing up and dropping off the grid at a fast rate. The next day, as generators were beginning to come back online, there was pressure from some power companies to let the power market resume normal operations.

But Magness and Walker resisted, testifying the grid was still unstable and at risk of falling into a total blackout that could take weeks to recover from.

On Thursday Walker, a former adviser to Abbott who was appointed to the utility commission in 2017, faced questions about why she didn’t call a meeting of the utility commission to consult with other commissioners about keeping power prices at the $9,000 cap.

She replied that she believed the commission’s order from Feb. 16, “was still in place.”

“That was an independent decision I made,” she said. “It wasn’t something as a commission we discussed.”

Asked if she discussed it with anyone else, Walker said, “I don’t remember.”

Walker struggled to remember details of the blackout at numerous times during her testimony Thursday, at times drawing criticism from U.S. Bankruptcy Judge David Jones.

At the end of her testimony, Jones commented, “I see no purpose in simply highlighting the areas of your unreliability.”

“I am disappointed in your conduct and your lack of candor this morning.”

See here for the previous day’s testimony from former ERCOT head Bill Magness. While it may sound like Abbott was ordering Walker to do something good, it contradicts his previous claims that he was not involved in the decisions being made by ERCOT and the PUC. In addition, the crux of this lawsuit is that ERCOT and the PUC mandated that the price cap for energy remain at the maximum level of $9,000 per kilowatt hour for days after the grid began coming back up, which put many millions of dollars into the pockets of some power generators at the expense of companies like Brazos Electric and their customers, which is to say people like all of us. The lawsuit, part of Brazos’ bankruptcy filing, is over how much they actually owe their suppliers. The plaintiff’s argument, which is backed up by a lot of outside experts, is that the max price cap, which ostensibly was to coax offline generators back online, did nothing of the sort. It was just a huge windfall for the providers that were already producing.

Anyway. A favorable decision for Brazos Electric would obviously be good for them, and I would hope good for their customers. It would also cause other power retailers to follow suit, and who knows how chaotic that might get. Not that it would be a bad thing, just a big uncertainty. And if there are a bunch more lawsuits of this nature, ERCOT is going to be very busy defending itself.

The Electric Reliability Council of Texas does not have sovereign immunity from all lawsuits and the Texas Public Utility Commission does not have exclusive jurisdiction over all claims against ERCOT, according to a ruling by an appeals court ruling this week.

The 12-to-1 decision Wednesday by the Fifth District Court of Appeals in Dallas was widely anticipated because it could have ramifications in hundreds of lawsuits pending in Houston courts stemming from the deadly winter storm in 2021 in which ERCOT is a defendant.

In the ruling, judges cleared the path for Panda Power Funds to pursue hundreds of millions of dollars in damage claims in state court against ERCOT. Panda claims that ERCOT committed fraud, negligent misrepresentation and breach of fiduciary duty when it published intentionally inaccurate reports in 2011 and 2012 that projected a “serious and long-term scarcity of power supply.”

As a result of ERCOT’s allegedly false market data, Panda invested $2.2 billion to build three new power plants — operations that have not generated the revenue that ERCOT predicted.

[…]

The Fifth Court opinion, authored by Justice Erin Nowell, also reverses a decision the same court made in 2018 that ERCOT has sovereign immunity.

“To date, the supreme court has not extended sovereign immunity to a purely private entity neither chartered nor created by the state, and this court will not create new precedent by extending sovereign immunity to ERCOT,” Nowell wrote. “ERCOT is not entitled to sovereign immunity and the legislature did not grant exclusive jurisdiction over Panda’s claims to the PUC. To the extent we previously held otherwise, that holding is in error.”

“Although ERCOT argues it has the power to make binding law, which it calls the ‘quintessential sovereign power,’ the applicable statutes do not support this argument,” the court ruled.

Justice David Schenck dissented, but there is no record of a written dissent.

Lawyers on both sides say the case is now headed to the Texas Supreme Court.

The issue of ERCOT’s sovereign immunity is critical in more than 200 individual wrongful death, personal injury and property damage lawsuits brought by victims of the winter storm that name ERCOT among defendants. Those cases have been consolidated before a judge in Houston.

“This is a huge win for both Texas consumers and businesses whose lives and livelihoods were so drastically impacted by the actions and inactions of ERCOT,” said Houston trial lawyer Derek Potts, who represents dozens of victims of the storm. “It is safe to say that more litigation against ERCOT is coming.”

See here, here, and here for more on the Panda Power case, which originated in 2019 and thus has nothing to do with the freeze lawsuits. Well, it didn’t at the time, which was of course before the freeze, but it sure does now. Justice Nowell is now a candidate for State Supreme Court, by the way. Just passing that along.

Go ahead and blame Greg Abbott for your high electricity bills

They really are his fault.

The former head of the Texas power grid testified in court Wednesday that when he ordered power prices to stay at the maximum price cap for days on end during last year’s frigid winter storm and blackout, running up billions of dollars in bills for power companies, he was following the direction of Governor Greg Abbott.

Bill Magness, the former CEO of the Electric Reliability Council of Texas, said even as power plants were starting come back online former Public Utility Commission Chairman DeAnn Walker had told him that Abbott wanted them to do whatever necessary to prevent further rotating blackouts that left millions of Texans without power.

“She told me the governor had conveyed to her if we emerged from rotating outages it was imperative they not resume,” Magness testified. “We needed to do what we needed to do to make it happen.”

Abbott’s office did not immediately respond to a request for comment.

Last year the governor’s spokesman, Mark Miner said the governor was not “involved in any way” in the decision to keep prices at the maximum of $9,000 per megawatt hour – more than 150 times normal prices. He described a decision to send an aide to ERCOT’s operations center in the middle of the crisis as based on the feeling the grid operator was spewing “disinformation.”

Magness’s decision to keep power prices at the maximum cap for more than 24 hours after conditions on the power grid began to improve is now at the center of a bankruptcy trial waged by the Waco-based electric co-op Brazos Electric.

Brazos contends that decision was made recklessly, adding up to a $1.9 billion power bill from ERCOT that forced them into bankruptcy.

“It did nothing at all to cause more generation to come online,” said Lino Mendiola, one of the attorneys representing Brazos. “It was an attempted remedy that didn’t solve any of the problems caused by the winter storm.”

The original order to raise power prices to the cap was made by the Public Utility Commission on Feb. 15, to try to get power plants back online and encourage large power users like factories and petrochemical plants to stay offline. ERCOT elected to keep prices at the cap until Feb. 19, a decision that the Texas Independent Market Monitor criticized in a report last year as having, “exceeded the mandate of the Commission.”

“This decision resulted in $16 billion in additional costs to ERCOT’s market,” wrote Carrie Bivens, director of ERCOT’s Independent Market Monitor.

See here, here, and here for some background. Seems like kind of a big deal, doesn’t it? Maybe also puts some recent pronouncements by Abbott in a different context, too. Abbott, through a spokesperson, has now denied the claims of the testimony, which of course he would. I can’t wait to hear what else comes out of this lawsuit.

Winter storm litigation about to get busy

Some test cases will be underway soon.

During the past year, the wrongful-death, personal injury and property damage lawsuits — nearly all consolidated before one judge in Houston — moved at a snail’s pace. Hardly any court hearings were conducted. No witnesses were deposed. Settlement discussions never took place.

The next two months, however, are pivotal to the survival of the lawsuits.

On orders of a judge, plaintiffs’ attorneys have spent recent weeks updating their cases, adding dozens of corporations as defendants and presenting new theories about why the power grid nearly collapsed in the brutal cold, leaving millions without power and contributing to the deaths of hundreds.

Key defendants in most of the earliest lawsuits were the Electric Reliability Council of Texas, which manages the state’s electricity grid, and large generators and transmission companies such as CenterPoint Energy, TXU Energy, Reliant and NRG Energy.

Now the suits have added the power providers’ parent companies, subsidiaries and business partners, such as power producers and retailers such as Vistra, Duke Energy, NextEra and Talen Energy.

Judge Sylvia Matthews has given attorneys until Feb. 28 to choose five individual suits from the 174 brought by more than 400 plaintiffs to be so-called test cases.

“By all accounts, this is a judge who wants these cases to move forward and doesn’t allow grass to grow under her feet,” said Mikal Watts, a Houston lawyer who represents 65 people in the cases.

[…]

Not all the legal disputes are part of the multidistrict litigation.

For example, nearly all the energy companies named in the wrongful-death, personal injury and property lawsuits also are battling each other and ERCOT over issues such as wholesale power pricing that reached $9,000 per kilowatt-hour.

“Lawyers on both sides agree that the financial ramifications of Winter Storm Uri caused the biggest transfer of wealth in Texas history,” said Houston lawyer Derek Potts, who is involved in several of the pending lawsuits. “The question is, ‘Was it legal?’”

“Actual discovery has not even started, and that is when we will pinpoint what links in the chain are to be held responsible,” he added. “The pipeline companies, for example, reaped a tremendous windfall from Winter Storm Uri and the outrageous prices. Is that legal?”

See here for some background on the cases before Judge Matthews and our new best friend, the Texas Multidistrict Litigation Panel, for which I still want someone to write me a long background story. I’m very interested both in those five initial test cases and in the fight over the ridiculous price level that power was allowed to reach last year. I’d sure like for the answer to those questions posed to be “No”, but I have no idea what it would mean if a court were to make that decision. Not that I wouldn’t want to find out, just that it would be more chaotic than if the Legislature took action. But chaos may be the only way forward, so here we are. Original story is from Texas Lawbook, but it’s behind a paywall. The above is taken from the Chron excerpt.

In case you’d forgotten, we still haven’t fixed the power grid

It has other problems too, which we also haven’t addressed.

Millions of Texans lost power in February 2021. Hundreds died as a result. Tens of billions of dollars in damages were lost. Billions were just transferred from consumers by government action, and now consumers are paying billions to bail out corporations. What went wrong?

Stripping away everything else, the system operated by the Electric Reliability Council of Texas, ERCOT, failed because generator companies did not invest in weatherization practices after a similar failure in 2011. For eight of the 10 years prior to 2021, the average wholesale price of electricity in ERCOT was too low for generator companies to earn returns on capital. Consequently, they had every incentive not to invest in weatherization. The ERCOT market rewarded volatility at the expense of reliability, despite a decade of warning.

[…]

We identified that the ERCOT market rewards gaming to drive up prices in times of tight supply — driven by the weather or contrivance. Recall the 2001 movie “A Beautiful Mind” about Nobel Prize-winning game theorist John Nash.

Nash showed that sellers will explicitly or tacitly collude to drive up prices if given the opportunity — as the OPEC cartel demonstrates. The ERCOT market has been subject to complaints about market manipulation since 2003. For example, suppose the ABCD Generation Company operates 10 large plants in the ERCOT service region. For much of the year, it operates seven plants, keeping three idle. Let’s have bad weather hit anytime.

Ask yourself what the payoff is to start the three idle plants if there is a chance that adding the power generated by those three plants would keep the average wholesale market price at 3 cents per kilowatt hour when not starting those plants virtually guarantees that the wholesale price jumps higher — perhaps to the price cap of $9 per kWh under the ERCOT market rules in 2021? Is there a question about what the generators would do?

The ERCOT market has trusted participants to make infrastructure investments, conduct maintenance and needed upgrades, and to maintain reserves at the generator rather than system level. But without having incentives or mandates to maintain electric reserves in case of a surge in demand, the Texas marketplace has been caught off guard when demand outpaces the supply of energy.

The ERCOT market exchanged reliability in favor of volatility and increased uncertainty for consumers and generators alike.

The common argument for the design of the ERCOT market is that it keeps electricity prices low, a key issue for energy-intensive manufacturing plants along the Gulf Coast. Proponents continue to argue that electricity rates in Texas are lower than in states with regulated utilities.

The data do not support that claim. Individual customers in the ERCOT territory paid on average $5,500 more on their electric bills over a 14-year period. Prices for consumers within the ERCOT marketplace are consistently higher than for the roughly 15 percent of Texas customers in regulated marketplaces outside the ERCOT service area.

Estimates by the Wall Street Journal show that ERCOT’s consumers paid almost $28 billion more between 2004 and 2019 than they would have in an old-fashioned regulated market.

A report by the Texas Coalition for Affordable Power found that prior to partial deregulation in 2002, Texans paid rates 6.4 percent below the national average, while in the following 10 years, they paid rates 8.5 percent above the national average.

We’ve discussed these topics before, but there’s always more to learn or be reminded about. The author of this piece is Ed Hirs, who co-produced a report about ERCOT in 2013 that detailed all of these problems, which remain in place. In other words, it’s been an issue the entire time that Greg Abbott has been Governor. Go read the rest.

A year after the freeze

A sobering portrait of grief and loss from last year’s freeze, from the Chron.

A year ago, a blast of frigid weather swept across the state, paralyzing the power grid and setting off a catastrophe. Power generators went offline, leaving millions in the dark for days without heat or water. Frozen pipes ruptured, damaging tens of thousands of homes in Houston alone. The state’s overwhelmed electrical grid came within five minutes of a total collapse.

Hundreds of Texans died from a variety of freeze-related causes, including automobile wrecks, hypothermia and carbon monoxide poisoning from fires or generators brought inside their homes.

In a place all too familiar with natural disasters, many still remain shocked by the failures of the electrical grid and government leaders, who failed to heed prior warnings about the importance of ensuring power plants prepared for winter storms.

Add to that the fear that another winter storm could spell disaster once more, even as residents across Houston and Texas still are fixing property damage, awaiting the results of lawsuits and mourning those lost in last year’s freeze.

“I think about her every day,” William said of his mother. “If it weren’t for that freeze, I feel like she would still be alive.”

This is a more focused and intimate look at people who lost loved ones last February, rather than a broader look at the numbers. (*) It’s about the people, not the policies and the ways that they failed us, and it’s tough to read because you can feel the sadness and guilt and despair. It’s worth your time.

(*) If you want to read a story about the numbers, it’s here.

How the grid held up

Basically, this cold front wasn’t anything like last year’s cold front.

Texas’s power grid passed its biggest test since last year’s deadly blackouts, keeping most lights on during a wintry blast. This storm, however, was far less severe than last year’s monstrous one, leaving questions whether the state is really ready for another deep freeze.

While reforms politicians enacted in the past year did help keep power plants running, analysts and power-market experts say the biggest reason things went so smoothly was it simply wasn’t as cold for as long. That meant natural gas kept flowing and wind turbines worked far better, helping the grid meet the increased power demand as millions of Texans cranked up electric heaters.

“The grid held up fine for a couple of reasons: the weather wasn’t as bad as we thought, and wind overperformed,” said Michael Webber, an energy professor at the University of Texas. “The demand wasn’t as high, and the supply wasn’t as low.”

[…]

Gas flowed freely during this week’s storm, but that’s largely because it didn’t get cold enough.

“The state still remains vulnerable because we have not set requirements for winterization of the gas system,” said Webber, who’s also chief technology officer at venture fund Energy Impact Partners. “As such, the reliability of gas production is still flimsy.”

In Dallas, last year’s temperatures fell as low as -2 Fahrenheit (-19 Celsius), and there were 11 straight days with highs below 40 degrees. This year, forecast lows are around 10 degrees, and meteorologists expect just three consecutive days with highs below 40.

In Midland, the hub of the oil- and natural gas-rich Permian Basin, last year saw eight consecutive days when temperatures never rose above freezing, which crippled the flow of gas and starved power plants of fuel. This time, Midland didn’t have back-to-back days when the mercury stayed below 32 degrees.

“The last one was both longer and more extreme,” said Marc Chenard, a meteorologist at the U.S. Weather Prediction Center.

While Ercot didn’t ask consumers to conserve, widespread closures of schools and businesses helped cut down on consumption. Peak demand for electricity was significantly lower and a bit later than anticipated Friday morning, with consumption hitting 69 gigawatts when Ercot previously projected record demand of 75.6 gigawatts. A gigawatt is enough to power about 200,000 Texan homes.

And don’t forget the coin miners. Like Slytherin in the Battle of Hogwarts, the coin miners did their part.

In the short run at least, this is good for Greg Abbott, whose bet paid off. By the same token, though, we’ve spent the last few weeks talking about the freeze, reliving our experiences from it, and expressing a big lack of confidence in the grid, even if it did stay up this time. We still have the actual one-year anniversary of the freeze coming up in about a week, so we’re not done yet with the trauma of it all. That can’t be great for Abbott. He won his bet, which meant he didn’t get absolutely pummeled by circumstances that he had some control over but did nothing to affect, but the payoff was mostly that he broke even. That’s probably good enough for him since he’s leading in the polls, but winter isn’t over yet, and I doubt too many people are feeling better about it. The DMN has more.

The noble sacrifice of the coin miners

You’re welcome.

Chad Harris got an urgent phone call during last February’s epic Texas winter storm, something he was expecting as the operator of the single largest bitcoin mining and hosting facility in North America.

“You need to shed your power now; we need it,” Harris said, recalling the conversation with his local transmission company in Central Texas. As CEO of Rockdale-based Whinstone, which later became a subsidiary of Riot Blockchain, he had a ready answer.

“I told them we already had done it two days ago,” he said.

That storm left at least 4.5 million electricity customers in Texas without power.

This time around, there’s been a year of dialogue between mining companies, the governor’s office and the state’s grid operator, the Electric Reliability Council of Texas. Miners met with Gov. Greg Abbott in October and said they would shut down in the event of another winter storm.

Earlier this week, Riot Blockchain sent a letter to Abbott with its plan to voluntarily shut down and had 99% of its operations powered off by 7 p.m. Wednesday.

“Last year, the miners turned off during [the] winter storm, but there were fewer bitcoin miners then and less megawatts to be taken offline,” said Lee Bratcher, president of the Texas Blockchain Council, an association representing the blockchain industry. “It still made an impact on thousands and thousands of homes. But this year, there are more and larger mining operations that can push back power and they’ve been proactive.”

After the 2021 storm, ERCOT contacted mining companies — drawn to Texas by lower energy costs — for help since they are heavy electricity users. ERCOT realized miners could assist in balancing supply and demand during extreme weather by shutting down operations and selling unused power back to the grid as part of an emergency response program.

Yeah, and you can save more gas by not driving a Hummer instead of not driving a Honda Civic. Any virtue you may derive from that still needs to be balanced against the gas-guzzling you had been doing before. I’m glad that the coin miners were willing to do their part to keep my lights on, but let’s not throw them a parade just yet.

Okay, so maybe there will be some blackouts

Oops.

With freezing weather expected to hit a large portion of Texas this week, Gov. Greg Abbott on Tuesday tried to assure Texans that the state is better prepared this year than last, but said there could be local power outages throughout the state.

“Either ice on power lines … could cause a power line to go down, or it could be ice on trees that causes a tree to fall on power lines,” Abbott said.

This week’s cold front could be the first significant test of the state’s main power grid since last February’s freeze left millions of Texans without power for days in subfreezing temperatures. Hundreds of people died because of that storm.

“No one can guarantee there won’t be [power outages],” Abbott said Tuesday, just over two months after he promised the lights would stay on this winter.

Coulda fooled me. It’s almost as if you can’t believe a word this guy says.

We’re all grownups here, and we all know that power outages occur all the time, for reasons that have nothing to do with the capability or robustness of the state’s electric grid. Stuff happens, and the local folks are pretty good about responding to these situations. That’s not the point here. The point is that we had an enormous systemic failure a year ago, one that came with a tremendous cost. It was the third such failure in recent years, and there were clear lessons learned and improvements to be made from the first two that just never happened. Even after that third massive and deadly failure and the lessons we re-re-learned, we got way more blather and empty promises from Greg Abbott, who raked in millions of dollars in campaign contributions from the power grid fat cats who made absolute bank off of the debacle, than action. And now Abbott is trying to hedge his bets a little and claim that when he said there would be no power outages this winter, he didn’t really mean it. You tell me what we should do about that.

Who’s worried about electricity in Texas?

The guy who writes The Watchdog for the DMN, for one. The people with real power in this state, not so much.

I was lonely.

For more than a decade, it was as if I were the only North Texas journalist regularly covering the flaws of the Texas electricity system. It’s not that I was so smart. I heard from hundreds of readers every year who complained about the confusing and unfair deregulated market.

Yet when the Texas Legislature met, nothing ever happened. An electricity activist, Carol Biedryzcki, promoted common-sense solutions that nobody listened to. Sylvester Turner, a former state representative who is now Houston’s mayor, introduced reform bills that never got voted on.

Another Houston representative, Gene Wu, introduced fix-it bills, too. Lawmakers who cared about the issue could fit in a small elevator.

It became obvious that no governor or state lawmaker wanted to tangle with what former U.S. House Speaker Sam Rayburn once said of the electricity industry: “The most powerful, dangerous lobby… that has ever been created by any organization in this country.”

[…]

Then came the horrific February freezeout, and everything changed. People died. Homes were ruined. Businesses were shuttered. The suffering was immeasurable for days. One of the worst Texas weather events ever.

The story was suddenly front and center. The Texas energy house of cards collapsed. Complete favoritism toward the industry was as obvious as the noontime sun. Right before our eyes, in real time, corruption flourished.

[…]

When the power returned, I began by pointing fingers at the governors, lawmakers, regulators and industry powerhouses who were responsible.

“Don’t count on state lawmakers to admit culpability,” I wrote. “And don’t trust their coming investigations to be unbiased.”

I released the 2021 edition of my annual electricity shopping guide. It’s a free step-by-step guide with tips that I’ve shared with tens of thousands of Texans, online, in the newspaper and as a paper flier.

DeAnn Walker, the chairperson of the (p)UC, who months before in a huff had eliminated the Enforcement Division, appeared before the state Senate. I called her the “incredible shrinking chairman.”

“You’re the commissioner!” one Republican senator chastised. “Y’all don’t have any teeth,” another scolded.

Her reply shows why she lost the P: “If you believe we have that authority, I’m open to moving forward with it,” Walker said. Believe it.

She resigned in disgrace and was replaced as chair by Arthur D’Andrea.

He lasted two weeks. In a 48-minute conference call with investors, first reported by Texas Monthly, he assured them he was doing everything within his power “to tip the scale as hard as I could” so billions of dollars in overcharges from the freezeout would not be reversed.

He laid out the strategy that would come later when lawmakers, the Texas Railroad Commission (regulating oil and gas) and the (p)UC approved the sale of $10 billion in bonds to pay back energy companies’ losses.

Unfortunately, companies that made millions of dollars during the crisis will see some of that bailout money, too.

Who repays the $10 billion? You. But don’t worry, it’s a long-term loan.

D’Andrea also told investors in that call that he didn’t “expect to see a ton” of improvements passed by lawmakers. He was correct. Although for the first time ever, many reform bills were introduced. Most died.

The Watchdog kept a scorecard for good reform bills. Most had notations of either “Stuck in committee” or “No action taken.”

Texans should not have been surprised at electric grid operator ERCOT’s failing. The non-profit was a cesspool of corruption years before. In 2005, a massive procurement scandal led to criminal convictions. Fake companies were created by ERCOT managers, and millions of dollars were siphoned from ERCOT funds.

There’s more, but you get the idea. A lot of this we’ve seen before, but there’s no harm in being reminded. Greg Abbott is counting on a normal winter and a whole lot of short attention spans to claim a victory for doing nothing. Don’t let him do it.

The cities and the freeze

Well, at least some government entities are trying to learn from the February disaster, even if they’re having a rough go of it.

Ten months after the freeze, Texas cities have made some headway on storm preparedness, an oft-neglected area of local government. They have bolstered reserves of bottled water for residents in case of water outages, bought tire chains for city emergency vehicles, and implemented measures intended to shorten potential power outages for residents and keep electricity flowing to critical facilities.

But as winter approaches and the electrical grid remains vulnerable to blackouts, cities are still short on two key fronts: making sure their most vulnerable residents have the information they need to survive a similar calamity and that the water stays on. Many preparations cities are undertaking to protect residents against future disasters will take months, if not years, to put in place, city officials have said.

And worries abound that officials didn’t learn the lesson and will neglect to adopt new readiness measures — as they have after past disasters.

Austin officials failed to make emergency preparations before February that may have helped during the winter storm, despite past recommendations to do so, according to a recent report conducted by city auditors. Austin has adopted only a sliver of the recommendations made in the wake of other recent calamities, the report says.

“It’s extremely frustrating, and we need systems in place that don’t let that happen again,” Austin City Council member Alison Alter said during a meeting on the report’s findings last month.

Emergency officials say part of the reason those calls haven’t been entirely heeded is that large-scale disasters are becoming increasingly common as climate change worsens, making it more difficult to learn from the last one before the next one hits. On top of that, responding to the COVID-19 pandemic has stretched emergency responders thin.

“There hasn’t been enough time in between them to look at all those corrective actions,” Juan Ortiz, who heads Austin’s Office of Homeland Security and Emergency Management, told a council committee in November. “That really has caused the congestion in work that needed to be done.”

[…]

In San Antonio, city and utility officials are scheduled to deliver a joint emergency communications plan at the end of the month. An important question they are expected to address is how to communicate ahead of and during a storm with residents who don’t have internet access to begin with — like many residents on the city’s South Side.

Those residents can’t be left out in the cold, said council member Adriana Rocha Garcia.

“A preparation checklist should be on a door hanger for every vulnerable community to be able to just literally go out and get it from their doors so that they know exactly what to do, exactly who to call in case of an emergency during a winter storm,” Rocha Garcia said.

Now do the story about what Greg Abbott has learned from the experience and what he’s doing about it. Oh, wait…

We are so screwed if there’s a real cold front

[bangs head on desk].

During Texas’ first strong cold front of the winter this past weekend, natural gas production in the state’s top energy-producing region dropped by about 25%, according to a report from S&P Global. And while the lights largely stayed on across the state, the gas system’s performance during a brief cold snap raised more questions about the grid’s ability to handle extreme winter weather.

A separate Bloomberg report said gas production in the Permian Basin region of West Texas plunged to its lowest levels since last February’s deadly winter storm.

A number of natural gas companies reported to the Texas Commission on Environmental Quality that they had to unexpectedly flare off gas last weekend because their equipment froze.

Meanwhile, the Railroad Commission, which regulates the oil and gas industry, said it didn’t know anything about the sudden drop in gas production. An agency spokesperson said the commission is “currently evaluating available data on natural gas production during the weekend of Jan. 1 and 2.”

Natural gas fuels a majority of power generation in Texas, and some power generators reported disruptions to their gas supply — but they said it was not enough to impact generators’ ability to produce electricity. Gov. Greg Abbott said the state’s main power grid operator was prepared with extra power supply online.

The Electric Reliability Council of Texas, the grid operator, said there were no significant power outages around the state.

But the disruptions to the natural gas supply during a typical Texas cold front calls into question whether the state’s gas companies are ready for extreme winter weather, a concern energy experts and power company executives have expressed in recent months after lawmakers didn’t require gas companies to immediately prepare their equipment for extreme cold.

“I think it means the gas system’s not ready for another cold snap,” said Michael Webber, an energy resources professor at the University of Texas at Austin. “It wasn’t even really cold. It was cold, but nothing close to Winter Storm Uri [in February].”

Who are you gonna believe, Greg Abbott or your lying eyes? At this point, all I can say is it would be best to prepare for winter like you prepare for hurricane season. Assume a disaster is coming, and act accordingly. Abbott doesn’t care if you live or die, so it’s everyone for themselves. Godspeed and good luck.

The final official death toll from the big freeze

It’s undoubtedly an underestimate.

Texas has added 36 more deaths to the official death toll from the February snow and ice storm, bringing the total to 246 in what was one of the worst natural disasters in the state’s history.

The Department of State Health Services disclosed the new total in a report on the storm that was released Friday and described as the “final report” in an analysis by the department’s Disaster Mortality Surveillance Unit. The deaths occurred between Feb. 11 and June 4. The figure includes people who were injured in the storm but did not die until later, and also people whose bodies were found after the storm, including during repairs of damaged homes.

The 246 deaths spanned 77 counties and included victims ranging from less than 1 year old to 102 years old, according to the report. Close to two-thirds of the deaths were due to hypothermia. Of the deaths, the report classified 148 as “direct,” 92 as “indirect” and six as “possible,” using criteria developed by the Centers for Disease Control and Prevention.

DSHS previously pegged the death toll at 210 in July. The agency said in the report that it identifies deaths through “mortality surveillance forms, death certificates, and verification of informally reported deaths.”

[…]

In addition to hypothermia, DSHS attributed the storm-related deaths to “exacerbation of pre-existing illness” (10%), motor vehicle accidents (9%), carbon monoxide poisoning (8%), fires (4%) and falls (4%). The Texas Tribune and NBC News reported in December that portable generators, which can cause carbon monoxide poisoning, are some of the deadliest consumer products.

There are other ways to approach this question. Last spring Buzzfeed used “excess mortality” – a comparison to the actual number of deaths at that time to the historic baseline – and estimated that as many as a thousand people may have died as a result of the freeze. That comes with large error bars, but even the low end of that range is almost twice as much as the official DSHS tally. However you look at it, it was a lot, and it was totally unnecessary. And it remains a big risk going forward because Greg Abbott and the Legislature and the Railroad Commission did basically nothing to mitigate it. That’s the real headline here.

Nobody bullshits like Greg Abbott

Some stories I blog about require subtle thought and detailed analysis. Others pretty much speak for themselves.

The two most powerful people overseeing Texas’ electric grid sat next to each other in a quickly arranged Austin news conference in early December to try to assure Texans that the state’s electricity supply was prepared for winter.

“The lights are going to stay on this winter,” said Peter Lake, chair of the Public Utility Commission of Texas, echoing recent public remarks by Gov. Greg Abbott.

Two weeks earlier, Abbott had told Austin’s Fox 7 News that he “can guarantee the lights will stay on.” The press conference that followed from Lake and the chief of the state’s independent grid operator, the Electric Reliability Council of Texas, came at the governor’s request, according to two state officials and one other person familiar with the planning, who were not authorized to discuss the matter and spoke on the condition of anonymity.

“It was 150% Abbott’s idea,” said one of the people familiar with the communication from Abbott’s team. “The governor wanted a press conference to give people confidence in the grid.”

A source close to Lake said the idea for the press conference was Lake’s, and the governor supported it when Lake brought up the idea during a meeting.

Abbott has for months been heavily involved in the public messaging surrounding the power grid’s winter readiness. In addition to the press conference, he has asked a major electric industry trade group to put out a “positive” public statement about the grid and has taken control of public messaging from ERCOT, according to interviews with current and former power grid officials, energy industry trade group representatives and energy company directors and executives.

But the messaging has projected a level of confidence about the grid that isn’t reflected in data released by ERCOT or echoed by some power company executives and energy experts who say they’re worried that another massive winter storm could trigger widespread grid failures like those that left millions of Texans without power in February, when hundreds of people died.

Abbott has also met one-on-one with energy industry CEOs to ask about their winter readiness — but those meetings happened weeks after Abbott made his public guarantee about the grid.

“You’d think he would have asked to meet with us before saying that,” one person involved in the energy company meetings, who was not authorized to speak publicly, said of Abbott’s guarantee.

Ten months after the power grid failures caused hundreds of deaths and became national news, an election year is approaching and Abbott’s two top primary challengers and his top Democratic challenger have already been harshly criticizing the governor over his handling of the power grid.

“It might be a good political move, but it’s just a political move,” Peter Cramton, an energy markets expert and former ERCOT board member who resigned after the storm, said of Abbott’s promise. “It’s not surprising. His fate is on the line. So this is a sensitive political issue now.”

The details may be news, but the basics have been known for some time. Abbott has bet the 2022 election on there not being a freeze big enough to cause another massive blackout. When we make it through the winter without anything bad happening – and let’s be honest, the odds of another freeze like this past February are pretty small, though perhaps the odds of any kind of freeze are higher – he will claim full credit for “fixing” the problem, even though he has done nothing of the sort. But who are you gonna believe, your own uninterrupted power supply or those yappy liberals?

I, being more risk averse and being the type of person who wants to actually, you know, do things, would not take this approach. But given that he was never going to advocate for something that would make a difference anyway, why not double down? The odds are in his favor, if not ever in his favor. Just remember that no matter what happens over the next three months or so, it was all bullshit. Every last bit of it.

ERCOT and PUC swear there will be no blackouts this winter

Do you believe them?

The Public Utility Commission and the Electric Reliability Council of Texas on Wednesday pledged that the “lights will stay on” this winter as it inspects power generators and enforces other requirements to avoid a deadly power outage that crippled Texas during a February storm.

Peter Lake, chairman of the PUC, which regulates utilities in the state, said at a press conference that his agency and ERCOT, the state’s grid manager, have moved at “lightning speed” to change the requirements for power producers and natural gas supplies to operate during winter months. The PUC oversees ERCOT.

“Our grid is safer and stronger than ever,” he said. “Because of all these efforts, the lights will stay on. No other grid has made so many changes in such a short amount of time as we have.”

The promise to keep power flowing comes about 10 months after massive outages caused by a winter storm that plunged millions of Texans into freezing darkness, leading to the deaths of hundreds. All commissioners who served the PUC resigned or were fired, as was the CEO of ERCOT. State legislators and new commissioners on the PUC have passed laws and rules requiring power generators and affiliated companies to better prepare for frigid weather.

Among the changes are new penalties and requirements, and a reduction in the maximum price for one megawatt hour of power to $5,000 from $9,000 beginning Jan. 1. 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, said the previous pricing scheme allowed generators to make the bulk of their money during tight grid conditions.

“This is intended to redistribute revenues so instead of making all your money only during extreme scarcity events, you’re getting more money from a flatter curve,” she said. ” You’re still getting $5,000 per megawatt hour in a tight time, which is still a whole lot of cash, but more of your revenue will come from normal days.”

[…]

Silverstein said that the violation reports and other rules changes are a good start, but that more needs to be done. The PUC, she said, should commission an analysis of the current condition of the grid, determine what needs to be done to improve reliability and estimate the cost to consumers, she said. Power generators, she said, should be able to show they can restart the entire grid in the event it collapses. And, she said, the PUC should address Texas’ nation-leading energy demand instead of solely focusing on adding new generation.

“I think they are right to say they have made a meaningful dent in preventing some of the problems that Winter Storm Uri revealed,” Silverstein said. “But that doesn’t mean the job is done yet.”

It is plausible to me that some beneficial changes have been made. Whether any of that makes a material difference or not, who knows. If we do make it through the winter with no problems, the odds are it’s due to a more normal winter and a bit of luck rather than anything transformative, but in the end it is the result that matters. For sure, whether by luck or by better oversight and regulation, Greg Abbott will win his bet and claim credit for it. The Texas Signal and the Trib, which reminds us that the Railroad Commission has not yet drafted any new weatherization rules for gas producers, have more.

A brief look at the winter storm litigation

This story is actually about the judge who will be presiding over winter storm cases, but it caught my eye for a reason that will be apparent.

Sylvia A. Matthews presided over more than 175 jury trials and 160 bench trials during her decade as a Harris County District Court judge. Lawyers for plaintiffs and defendants say she is smart, fair, well-prepared, hard-working, efficient and decisive.

Matthews will need all those qualities over the next several months as she oversees more than 150 highly complex civil lawsuits filed by victims seeking billions of dollars in damages as the result of last February’s winter storm, which was one of the deadliest and costliest disasters in Texas history.

The lawsuits filed across Texas include individuals suing for wrongful death, personal injury and property damages and companies complaining about breach of contracts, interruption of business and price-gouging.

Some of the largest power companies, such as the Houston utility CenterPoint Energy, the Chicago company Exelon and Vistra Energy of Irving, one of the state’s biggest generators and retail electricity providers.

While the lawsuits have been filed in more than a dozen Texas courts, the Texas Supreme Court has consolidated them into one docket, called multidistrict litigation.

The cases are consolidated for efficiency, allowing pretrial issues, such as production of evidence and admissibility of testimony, to be decided in a uniform matter. Once the pretrial issues are decided, the cases are usually sent back to the courts where the lawsuits were filed for trial.

For example, lawyers predict that the 200 lawsuits already filed in the Astroworld tragedy will also be consolidated into a single proceeding for pre-trial purposes.

[…]

The winter storm litigation is likely to take years to resolve, according to legal experts. In fact, the statute of limitations for more lawsuits does not expire for another year, meaning more cases may still be filed.

The stuff in between is about Judge Matthews, a Republican now serving as a visiting jurist following her electoral defeat in 2018. It’s fine, I’m glad she’s good at her job, but it was the stuff about the Texas Multidistrict Litigation Panel that I noticed. Here’s this thing I’d never heard of before October of this year, and now it’s turning up all over the place, including and not surprisingly in the AstroWorld cases. I feel like someone owes me a nice in-depth explainer about this body. How long has it been in existence, what are the rules that govern it, who serves and how do they get there, and is it just one of those things that it’s been a key player in such high profile and hot button matters as these cases plus SB8 or is it somehow a sign of the times? Oh, to be an assignment editor. Seriously, someone write me that story, I’d read the hell out of it.

Anyway. Litigation over the freeze and blackout and responsibility for the latter will no doubt go on for years, but hopefully it will help provide some answers. Lord knows, we’re not getting any from our state leaders. I’ll be keeping an eye out for further news.

It’s the power grid, stupid

It’s also a campaign theme.

Texas Democrats want to talk about the power grid.

Specifically, they want to talk about how it failed in February, how they don’t think enough has been done to fix it and why they believe Republicans in statewide leadership positions are the ones to blame.

Democratic candidates and strategists see the power grid as the Republican party’s biggest vulnerability — and they see highlighting it as their best shot at winning crossover voters in the state’s 2022 election cycle, which is expected to be an uphill battle for the minority party.

In stump speeches and messages to supporters, Democrats say that GOP leaders failed at fixing the shortcomings of the state’s energy infrastructure that led to millions of Texans losing power for multiple days during a winter storm in February, which resulted in a death toll that has been calculated as ranging from 210 to more than 700 people.

Beto O’Rourke, the frontrunner to challenge Republican Greg Abbott for governor, has said the two-term incumbent did “absolutely nothing” to heed warnings despite a previous electricity blackout in 2011. Mike Collier, who is running for lieutenant governor, coined the slogan “fix the damn grid” as one of his campaign’s top priorities. And Luke Warford, who is running for a seat on the Texas Railroad Commission, which regulates the state’s oil and natural gas industry, has made “Let’s keep the lights on!” his campaign slogan.

“It makes sense for Democrats to want to channel those doubts and put them front and center,” said Jim Henson, director of the Texas Politics Project at the University of Texas at Austin. “About the only good thing for Democrats about the extended Republican monopoly [in state politics] and their demonstrated inability to break that monopoly is that there’s only one political party that can be blamed.”

Republicans, not surprisingly, disagree. It’s not much of a campaign slogan if there’s no conflict. The story notes that 1) the public largely agrees with the position that Abbott and the Lege didn’t do enough, according to the polling data we have; 2) the state’s own studies say we’re still vulnerable to blackouts under the right (or wrong, depending on how you want to look at it) set of circumstances; and 3) numerous Republicans, from Dan Patrick to the pack of jackals running against Abbott in the Republican primary, think that Abbott and the Lege didn’t do enough to fix the problem. As I said, this is Greg Abbott’s bet, that things will be sufficiently OK through the next winter and summer, and if so he’ll claim the credit for it. Only time will tell.

Greg Abbott’s bet

What, me worry about blackouts?

Gov. Greg Abbott promised that the state’s electric grid would be able to withstand pressures caused by any potential winter storm that occurs this year in a television interview Friday.

“Listen, very confident about the grid. And I can tell you why, for one: I signed almost a dozen laws that make the power grid more effective,” Abbott said. “I can guarantee the lights will stay on.”

After the winter storm in February that left millions across the state without power, the Legislature passed a number of bills requiring additional “weatherization” measures for companies that maintain the state’s electric grid.

But experts have expressed concerns that loopholes have allowed some natural gas providers to exempt themselves from the weatherization requirements, potentially leaving the system still vulnerable.

“Everything that needed to be done was done to fix the power grid in Texas,” Abbott said in June when he signed two of the bills.

[…]

“You’re going to have another winter and another summer that’s going to strain the electric grid,” said Brandon Rottinghaus, a professor at the University of Houston. “If there’s any kind of problem for people, there’s a direct connection to how Democrats can use that to their political advantage against Republicans.”

Well, “guarantee” is a strong word.

After last winter’s freeze hamstrung power giant Vistra Corp.’s ability to keep electricity flowing for its millions of customers, CEO Curt Morgan said he’d never seen anything like it in his 40 years in the energy industry.

During the peak days of the storm, Vistra, Texas’ largest power generator, sent as much energy as it could to power the state’s failing grid, “often at the expense of making money,” he told lawmakers shortly after the storm.

But it wasn’t enough. The state’s grid neared complete collapse, millions lost power for days in subfreezing temperatures and more than 200 people died.

Since the storm, Texas lawmakers have passed legislation aimed at making the grid more resilient during freezing weather. Signing the bill, Gov. Greg Abbott said “everything that needed to be done was done to fix the power grid.”

But Morgan isn’t so sure. His company has spent $50 million this year preparing more than a dozen of its plants for winter. At the company’s plant in Midlothian, workers have wrapped electric cables with three inches of rubber insulation and built enclosures to help shield valves, pumps and metal pipes.

No matter what Morgan does, though, it won’t be enough to prevent another disaster if there is another severe freeze, he said.

That’s because the state still hasn’t fixed the critical problem that paralyzed his plants: maintaining a sufficient supply of natural gas, Morgan said.

Natural gas slowed to a trickle during the storm, leaving the Midlothian facility and 13 other Vistra power plants that run on gas without enough fuel. The shortage forced Vistra to pay more than $1.5 billion on the spot market for whatever gas was available, costing the company in a matter of days more than twice the amount it usually spends in an entire year. Even then, plants were able to operate at only a fraction of their capacity; the Midlothian facility ran at 30% of full strength during the height of the storm.

“Why couldn’t we get it?” Morgan said recently. “Because the gas system was not weatherized. And so we had natural gas producers that weren’t producing.”

If another major freeze hits Texas this winter, “the same thing could happen,” Morgan said in an interview.

[…]

Texas has done “next to nothing” to weatherize its natural gas supply, said Doug Lewin, an Austin-based energy consultant.

“We don’t have a regulatory system in place that holds the industry accountable. That is the problem,” Lewin said. “It’s not a technology or engineering problem. It’s a regulatory problem.”

And maybe that doesn’t matter, at least for this year. I’m sure Greg Abbott can afford to have a meteorologist on his political staff, and I’m sure that person will have advised him that another freeze like the one we saw this year is unlikely. Even a freeze that isn’t quite as bad probably won’t happen. Given that Abbott isn’t going to lift a finger to improve the grid’s reliability, why not bet big on the more probable outcome, even if the downside is so massive. At this point he’s made his bed anyway, and if we make it through next summer without anything bad happening he gets to claim the credit for it. I’m too risk averse to want to make that bet, but here we are. As they say, it’s a bold move and we’ll see if it pays off for him.

We’re still vulnerable to blackouts

So says ERCOT.

Electricity outages in Texas could occur this winter if the state experiences a cold snap that forces many power plants offline at the same time as demand for power is high, according to an analysis by the Electric Reliability Council of Texas. The outages could occur despite better preparations by power plants to operate in cold weather.

Heading into the winter, ERCOT considered five extreme scenarios in a risk assessment of the state’s power supply. The grid operator estimates both how much electricity Texans are expected to demand and how much electricity power plants are expected to produce ahead of each season.

Following the widespread February power outages that left millions without electricity for several days, ERCOT changed those assessments to calculate what would happen if extreme conditions occurred simultaneously — like what happened this year.

The calculations show the power grid’s vulnerability to the cumulative impact of multiple pressures that could leave the system short of a significant amount of power. Power grids must keep supply and demand in balance at all times. When Texas’ grid falls below its safety margin of 2,300 megawatts of extra supply, ERCOT, the grid operator, starts taking additional precautions to avoid blackouts, such as asking residents to conserve power.

The calculations for severe risk this winter show that it wouldn’t take a storm as bad as the one in February, when hundreds of people died, to take the grid offline.

[…]

“We’ve had years of poor planning of peak [demand] by ERCOT,” said Alison Silverstein, an expert on Texas’ electricity system who formerly worked at the Federal Energy Regulatory Commission and the Public Utility Commission of Texas. She spoke during a public event hosted by the environmental group the Sierra Club on Saturday. “ERCOT’s power market has historically been managed to minimize costs, not to assure excellent reliability.”

Four of the five extreme risk scenarios ERCOT considered would leave the grid short a significant amount of power, which would trigger outages for residents.

The extreme scenarios have a low chance of occurring, ERCOT emphasizes in its report, and the grid operator estimates more power generation will be available than last winter.

Under typical winter grid conditions, the ERCOT report said, there will be sufficient power available to serve the state.

Well yeah, but if this winter had been typical we wouldn’t have had the massive power failures we did. The point is we did have them. There is a calculation that needs to be done to balance the likelihood of a given event occurring and the bad things that will happen if it does. Not all risks are worth the cost of mitigation, but we do tend to take action against the things that have the biggest downside. House fires are increasingly rare, for a variety of reasons, but we still install smoke detectors and carry insurance against the damage and loss they cause. If we’re not taking all reasonable steps to mitigate against the kind of outage we had this February, we are definitely doing it wrong.

FERC report on the freeze

It was lack of weatherization all along.

A shortage of natural gas during the winter storm that swept Texas and other states in the south central United States in February was primarily caused by the oil and gas industry’s failure to weatherize its systems, resulting in more than 58 percent of generation outages occurring at natural gas-fired power plants, the Federal Energy Regulatory Agency reported Tuesday.

Over a more than 300-page report, federal officials catalogued how one of the largest blackouts in the nation’s history came to pass, leaving millions of people in Texas without power for days on end. And while all parts of the region’s energy industry shouldered some of the blame, federal officials reported natural gas operators’ equipment freezing up was responsible for more than twice as much of the gas supply shortages as were rolling blackouts and downed power lines.

“The (report) highlights the need for substantially better coordination between the natural gas system and the electric system to ensure a reliable supply that nearly 400 million people across North America depend upon to support their way of life,” Jim Robb, president of the North American Electric Reliability Corporation, said in a statement.

[…]

In September, FERC and NERC issued a preliminary report recommending power plants and natural gas producers be required to protect critical equipment from freezing temperatures, as well as providing compensation for generators to recoup weatherization costs – similar to recommendations made following a similar but less severe power outage in Texas in 2011.

The agencies reiterated those recommendations Tuesday but also included more detail on what in went wrong in February.

Among their findings were:

– Eighty-one percent of freeze-related generating unit outages occurred at temperatures above the units’ stated ambient design temperature.

– Eighty-seven percent of unplanned generation outages due to fuel issues were related to natural gas, predominantly related to production and processing issues, while 13 percent involved issues with other fuels such as coal or fuel oil.

– Natural gas fuel supply shortages were caused by natural gas production declines. Some 43 percent of natural gas production declines were caused by freezing temperatures and weather, and 21.5 percent caused by midstream, wellhead or gathering facility power losses, which could be attributed either to rolling blackouts or weather-related outages such as downed power lines.

See here for the September preliminary report, and here for the FERC news release, which includes a link to the full report. It’s nothing we haven’t heard before – you know, going back to 2011 and 1989 – but there it is again. Maybe someone in a position of power will read it this time.

On a related and timely note, we now have a new expression for the higher gas and electricity prices we’re now paying because of this malfeasance:

I’m thinking you’ll probably hear that a few more times over the next 12 months or so. Chris Tomlinson, who has harsh words for the Railroad Commission and their false claim that a “paperwork snafu” was at fault, has more.