Public Utility Commission

Watch out for your electric bill

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As Texans continue paying off the costs of the deadly 2021 winter storm, state lawmakers are considering a Republican-backed proposal that would allow for more frequent rate hikes and prevent cities from challenging the increases.

Supporters of Senate Bill 1015 say it would help bolster the power grid, making it easier for utilities to recover the costs of building poles and wires to transmit electricity across growing cities.

For years, cities have negotiated settlements with electric utilities over these proposed rate hikes, securing lower costs for residents and businesses if they can show the increase is excessive.

While electric utilities have to go before the Public Utility Commission every four years to justify what they charge overall, they have also been allowed since 2011 to periodically hike rates to cover new distribution lines and any related costs. As of now, companies can do a distribution-related increase only once a year, and only if an existing rate isn’t under review by the PUC.

SB1015 would let utilities seek two distribution rate hikes a year, including when they have a rate case pending. And it would make the PUC, not cities, responsible for reviewing and challenging the hikes.

Critics say the bill would cost ratepayers millions. It would amount to “utility self-regulation,” with “the potential of multiple, sizable increases to ratepayers over a very short period,” argued Tina Paez, director of Houston’s Administration and Regulatory Affairs Department.

“The current law strikes a good balance between the utility that makes the capital investment and the ratepayers that fund it,” Paez told a panel of Senate lawmakers this week. “But the proposed bill would eliminate that balance, tipping the scales entirely in the utilities’ favor.”

The bill’s author, state Sen. Phil King, said the measure “is about trying to bring consistency and efficiency” to the process of recouping costs.

Aside from distribution costs, utilities are allowed to seek rate hikes up to twice a year for work on transmission lines, which carry electricity from power stations to substations (as opposed to from substations to homes and businesses). King said his bill would apply the same standard to both transmission and distribution lines.

The Weatherford Republican also said he wants to reduce the legal fees that utilities pay when cities challenge their interim rate hikes. Utilities are entitled to pass those litigation costs on to ratepayers.

“At the end of the day, whatever we do to streamline the administrative process, the review process, theoretically reduces attorneys fees, reduces other costs involved, and that ultimately saves the person paying the bill a lot of money,” King said.

The proposal comes as CenterPoint Energy, the regulated utility that distributes most of the electricity in the Houston area, prepares to recoup $200 million it spent to lease mobile power generators during emergencies.

I don’t know enough about this to say with any confidence what the effect of SB1015 would be. But I do know that I don’t trust Phil King, I fear the Republican attacks on cities’ authority, and any bill involving regulation of utilities that doesn’t come with the support of stakeholders like cities and consumer groups is automatically suspicious to me. Your mileage may vary, but that’s my perception of this one.

Last chance to file Winter Storm Uri lawsuits

Feb 17th, 2023

by Charles Kuffner.

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The two year anniversary of the big freeze of 2021 is upon us, and the statute of limitations for civil actions in this sort of thing is two years, so you know what that means.

When Cherrilyn Nedd left her uncomfortably cold Summerwood home during the February 2021 winter storm to stay with her in-laws — who had a generator — she never expected that she would return to find the house ruined. She left the faucets dripping and her cabinets open. Hurricanes worried her, not freezes.

But a hissing noise greeted Nedd, 53, when she and her husband came back the next day to check on their house. Water spewed from a broken pipe in the collapsed ceiling, flooding every room on the first floor — their bedroom, the kitchen, the dining room and the living room.

“What is going on?” Nedd asked herself, in shock, stepping through the water.

The couple shut off the water to the house and swept out as much as they could. They would spend nearly a year and some $90,000 fixing the home, but they would never get back the ruined photos of a family cruise and their nephew as a baby; the computer equipment Nedd used for her consulting work was destroyed.

Lawyers representing storm victims like Nedd are working to file the final lawsuits related to the disaster as its two-year anniversary arrives this week — and the two-year statute of limitations for filing suit begins to expire. Thousands are accusing power companies, distribution companies, electric grid operators and others of failing to prepare properly for it, creating a catastrophe that caused property damage, countless injuries and hundreds of deaths. One expert estimated the cost of the freeze was as high as $300 billion.

[…]

Nedd and others see the lawsuits as another way to force change. The defendants would likely need to see that it costs more to fail than to do what’s needed to keep the power on, said Greg Cox, a plaintiffs’ liaison counsel. The various lawsuits are being directed to one judge in Harris County who will handle all of them.

The plaintiffs include a person whose house caught fire when power was restored, another who had both feet amputated after getting frostbite and a disabled person whose ceiling collapsed on him while he was in bed, Cox said.

“This catastrophe was not caused by an act of God, but instead was caused by intentional decisions by individual Defendants made both before and during Winter Storm Uri that were known to other Defendants and caused multiple operational failures which combined to cause the failure of the ERCOT grid,” one lawsuit states.

The story notes the so-far feeble efforts to enact reform and the big legal question of whether ERCOT can be sued. Some number of lawsuits will not survive if the answer to that is no. More from the Chron:

This week’s anniversary of the crippling storm — blamed in the deaths of more than 200 and which left millions of Texans without power, heat and in some cases water — means that the two-year legal deadline for filing related lawsuits is about to take effect.

The result is that lawyers representing more than 1,500 Texans and businesses have filed more than 80 wrongful death, personal injury and property damage lawsuits against more than 360 energy companies, insurance companies and the Electric Reliability Council of Texas, the state’s grid manager, since Thursday. Dozens more lawsuits are expected to be filed in Texas courts this week. The deadline depends on the date of the injury to the plaintiff.

The new lawsuits will be combined with the 230 cases lodged in 20 counties across Texas. Those cases, which include more than 1,500 individuals and businesses, have been consolidated into one multidistrict litigation docket in Harris County for the purpose of case management. The plaintiffs seek billions of dollars in damages.

[…]

But the individual cases represent just a slice of the legal disputes involving Texas energy companies. A couple dozen power companies have sued ERCOT and the Texas Public Utility Commission challenging their decision to increase the wholesale price of electricity by 650 percent to $9,000 per megawatt-hour. A decision could come this week.

Two other cases pending before the Texas Supreme Court challenge ERCOT’s claim that it is immune from civil lawsuits. A decision on that point is expected this spring.

Meanwhile, three energy companies — Brazos Electric Coop, Just Energy and Griddy — filed for corporate bankruptcy and restructuring.

“This litigation is massive, unlike anything we have ever experienced in Texas,” CenterPoint Energy Executive Vice President Jason Ryan said. CenterPoint is one of the companies being sued.

“What happened during those four to five days in February 2021 was the largest transfer of wealth in Texas energy history,” Ryan said. “The legal issues surrounding Winter Storm Uri are incredibly complex. Billions and billions of dollars are at stake.”

Scores of Texas electric companies asked a Houston appeals court Friday to dismiss the cases against them, saying the claims against them are without legal merit, would “upend the state’s electricity markets” and would “allow for ‘ruinous’ liability for entities that don’t contract with or deliver electricity to consumers.”

“This litigation is as unprecedented as the 2021 winter storm that spawned it,” lawyers for the power generators, such as Dallas-based Luminant and Houston-based NRG, argued in legal documents filed last week. “The stakes are exceedingly high. If permitted to proceed, this litigation will upend the state’s electricity markets, stretch Texas negligence and nuisance law beyond recognition, and make the state a national outlier.”

See here, here, and here for some background on the bankruptcies and the lawsuits related to them. The expectation is that the cases before the appeals court will be allowed to proceed, according to the story. We’re going to have this litigation for a long time. I don’t know how much of that wealth will be transferred back, but it sure needs to be a lot.

More on the PUC’s attempt to fix the grid

Jan 28th, 2023

by Charles Kuffner.

1 comment

From TPR:

After the last big blackout, state lawmakers passed Senate Bill 3, telling the commission to improve grid reliability. So, commissioners have been working on changing the state’s electricity market. They want to reform how energy is bought and sold on the power grid to create a market that makes sure power is there when people need it.

To do that, the commission hired a consulting firm that came up with a plan called a Performance Credit Mechanism, PCM for short.

Basically, this plan would create reliability credits that electricity providers (the companies most Texans pay their power bills to) have to buy from power generators (the companies that own the power plants). The credits represent a commitment from those power generators to deliver electricity when the grid is most stressed.

“I believe that PCM is the right solution because it’s a comprehensive solution that sets a clear reliability standard as required by [Senate Bill] 3,” Peter Lake, chair of the Public Utility Commission, said earlier this month.

The consulting firm that came up with the plan says it will cost $5.7 billion more a year. Supporters say power generators will use that money to invest in new power plants and to keep the energy supply humming in extreme weather. They also argue that not all that extra money will be shouldered by consumers. But, in Texas, consumers typically end up eating extra costs.

The plan is supported by power plant owners, who stand to earn money from the credits. The Electric Reliability Council of Texas, the state’s grid operator, is in favor of it. Gov. Greg Abbott and Public Utility Commissioners, including Lake, who are appointed by Abbott, also support the PCM.

The list of opponents appears to be significantly longer.

The independent market monitor, a position that serves kind of as a third-party auditor for the Texas grid, does not think it is a good plan. Consumer and environmental groups oppose it or are skeptical. The Texas Association of Manufacturers, a group that represents big industrial energy users in the state, is against it. The oil and gas lobby is not convinced it will work, and many state politicians also oppose it.

This group of opponents represent diverse interests, so their reasons for opposing the PCM vary.

Environmentalists point out that the plan is designed to bring more natural gas power plants to Texas, which is bad for climate change and air pollution.

Others, who want more natural gas plants built, argue that the PCM may not accomplish that goal. Some would prefer more direct subsidizing of new plants instead of the addition of a new layer of rules into the already complex Texas energy market.

And others say a big overhaul of the energy market is not even necessary, and that the grid can be improved without investing billions in building more power plants.

“I think we have an operational flexibility problem,” Carrie Bivens, the PUC’s independent market monitor, told a state Senate Committee late last year. “I do not believe we have [an energy] capacity problem.”

One thing all opponents agree on is that the plan is untested. It will cost billions, but there’s no real-world example to show it will work.

See here for the background. At this point, it’s not about whether this plan works or not. The issue is with going forward with an untested plan when there was a lot of disagreement about what that plan was and even a lack of consensus that this was the right kind of plan. It’s also not clear to me what the definition of success is for this plan. If new plants are built, which is the goal of this plan, but big outages still occur, is that a “success” because the new plants were built? If the capacity issues that Carries Bivens identifies are fixed before any new plants get built and the outages go away, is that a success for the plan? This is a basic thing that happens in the business world. If we can’t be sure that the plan worked, how will we know if it’s a good idea to do again if the same problems arise later? We’re just rolling dice and hoping for the best here.

PUC makes an attempt to fix the grid

Jan 21st, 2023

by Charles Kuffner.

1 comment

People are skeptical.

The Public Utility Commission voted Thursday to make a substantial change to the state’s electricity market in a controversial effort to get the whole system to be more reliable. The agency said it will let the Legislature review its plan before moving forward with putting it in place.

The idea, known as the “performance credit mechanism,” is a first-of-its-kind proposal. It’s meant to help produce enough power when extreme heat or cold drives up demand and electricity production drops for various reasons — such as a lack of sun or wind to produce renewable energy or equipment breakdowns at gas- or coal-fired power plants.

Under the new concept, which still has many details to work out, companies such as NRG would commit to being available to produce more energy during those tight times. The companies would sell credits to electricity retailers such as Gexa Energy, municipal utilities and co-ops that sell power to homes and businesses.

The credits are designed to give power generators an added income stream and make building new power plants worthwhile.

Theoretically, the credits help retailers and customers by smoothing out volatile price spikes when demand is high — but there’s wide disagreement over whether this will happen in practice. Some electricity providers filed for bankruptcy after the 2021 winter storm because they had to pay so much for power.

Critics of the plan say the idea is risky because it wasn’t properly analyzed and has never been tested in another place. Members of the Senate Committee on Business and Commerce wrote to the PUC in December that they had “significant concern” about whether the proposal would work.

[…]

Experts disagree on whether the performance credits will actually convince power companies to build more natural gas plants, which are dirtier than wind and solar energy but can be turned on at any time. Some say new plants will be built anyway. Others say companies can simply use the credits to make more money from their existing plants without building more.

Michele Richmond, executive director of Texas Competitive Power Advocates, wrote in her comments to the commission that the group’s members were “ready to bring more than 4,500 [megawatts] of additional generation” to the state grid if the new system were adopted. That would be enough to power 900,000 homes. The group’s members include Calpine, Luminant and NRG.

If the PUC doesn’t change the market, there won’t be enough reason to invest in building new power generation facilities and keep operating existing facilities, she wrote.

The Lone Star Chapter of the Sierra Club was among groups that asked the PUC to spend more time considering whether the new credits are the best solution “before making fundamental changes to our market that would increase costs to consumers,” as Conservation Director Cyrus Reed wrote.

The independent market monitor, Potomac Economics, which is paid by the PUC to watch the market for manipulation and look for potential improvements, does not support the idea. The group believes enough corrections have been made already to make sure the grid is reliable.

Still others, such as Alison Silverstein, a former senior adviser at the PUC and the Texas Public Power Association, which is made up of municipal-owned utilities, cautioned that there wasn’t enough reliable information and analysis about the proposed credits to make such a significant decision.

The grid’s reliability must improve, Silverstein wrote to the PUC, but “we cannot do so at any cost, and we cannot do so using poorly understood, poorly-analyzed, or unproven market mechanisms to address unclear problem definitions and goals.”

Silverstein added: “If the commission makes a bad decision on … market reform due to haste, erroneous problem definition, sloppy analysis or misguided rationalizations, all Texans will bear the consequences for years through higher electric costs, lower reliability, and a slower economy, and millions of lower income Texans will suffer degraded health and comfort as they sacrifice to pay their electric bills.”

See here for some background. The PUC unanimously approved the plan, which was spearheaded by Greg Abbott’s appointed Chair. I sure don’t know enough to say whether this will work or not. It sounds like it could, but there’s more than enough uncertainty to make it a risky proposition. I get the argument against waiting for more data, but I have to wonder if there were some other ideas with greater certainty that could have been used in the meantime. Not much to do but hope for the best now, and maybe take the idea of “accountability” more seriously in the next election. The Chron, whose headline says that electricity prices are likely to rise under this plan, has more.

SCOTx to decide if ERCOT can be sued

Jan 11th, 2023

by Charles Kuffner.

1 comment

Big decision to come.

Lawyers argued before the Texas Supreme Court on Monday over whether the state’s power grid operator should be protected from lawsuits, a question that has become especially important after the deadly February 2021 freeze.

Individuals and insurance companies have filed lawsuits against the Electric Reliability Council of Texas and power generators since the storm, which left millions of Texans without power in bitterly cold temperatures and hundreds of people dead after electricity was cut in large portions of the state. How those cases proceed will depend on what the Supreme Court decides in the coming weeks or months.

Lawyers for the ERCOT — the nonprofit that manages the state grid — argued Monday that it should receive the same “sovereign immunity” that largely shields government agencies from civil suits.

Because ERCOT is empowered by the state to fulfill a public function and is overseen by a state agency — the Public Utility Commission of Texas — ERCOT should not be held liable, they argued, saying legal claims against ERCOT should instead be the responsibility of the PUC.

ERCOT “has no function other than what the state assigned,” attorney Wallace Jefferson said. “It has no autonomy from the state. … It has no private interest. Its interest is in furthering the public’s interest in a reliable grid. The state controls its bylaws. And the state sets the fee that funds the organization.”

The opposing argument from attorneys in two separate cases was that giving ERCOT such immunity was inappropriate.

Attorneys for Panda Power Funds, a Dallas-area private equity firm that develops and operates power facilities, and CPS Energy, San Antonio’s energy utility, argued that just because ERCOT is regulated by a government entity doesn’t make it part of Texas government.

CPS Energy attorney Harriet O’Neill said the state Legislature has the power to make ERCOT explicitly part of the government, “but despite many opportunities, including after the winter storm, the Legislature has never conferred government status on ERCOT, which it knows how to do.”

Supreme Court Justice Jeff Boyd offered an analogy to explain the lawyers’ arguments: Imagine the state Legislature decided that all the yellow stripes on highways needed to be repainted red. If the Texas Department of Transportation did the work and was accused of doing it wrong, it would be protected from lawsuits.

But if the Legislature instead told TxDOT to authorize another entity to do the work and TxDOT set the prices and dictated how to paint the stripes, would the contractor then be considered a government entity?

See here, here, and here for some background. Note that the original Panda Power lawsuit was filed in 2019, well before the infamous freeze, and is over their claim that ERCOT intentionally manipulated projections of energy demand to encourage new power plant construction. I think Justice Boyd’s analogy is a good one and I can see the merit in either side. On balance, though, I think we overextend the principle of sovereign immunity in this state, and as such I’m rooting for the plaintiffs. But this could go either way. We ought to know in a few months.

No, really, are we emotionally prepared for this freeze?

Dec 22nd, 2022

by Charles Kuffner.

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Ready or not, here it comes.

State officials warned residents Wednesday to prepare their homes and vehicles for the coming freeze while trying to reassure on-edge Texans that the electric grid will stay online.

Temperatures are expected to plummet Thursday into single digits — with even lower wind chills. Leaders urged residents to check their car tires and batteries to be sure no one gets stranded on the road, to burn wood or gas inside only if there’s proper ventilation, and to insulate pipes.

“This is a dangerous storm coming our way,” said Nim Kidd, chief of the Texas Division of Emergency Management. “The temperatures will be extremely cold and the winds will be high, which will generate some very dangerous wind chills.”

Forecasters predicted life-threatening minus-10-degree wind chills in the Dallas-Fort Worth area and wind chills as low as minus 30 degrees in the Panhandle, Kidd said. Aside from light precipitation in the Panhandle, the state was expected to stay dry.

The lack of concerns over icy roads and infrastructure makes this a different threat than the 2021 Winter Storm Uri, which overwhelmed the state’s main electric grid and killed hundreds of people. Officials are promising that, this time, the power will stay on.

The Electric Reliability Council of Texas, which manages the grid that powers most of Texas, and the Public Utility Council made improvements after Uri, such as ensuring natural gas-fired plants have additional sources of fuel on site and improving communications among electricity regulators, oil and gas regulators, and the Texas Division of Emergency Management.

“The grid is ready and reliable,” said Peter Lake, chair of the Public Utility Commission, which regulates grid operators, on Wednesday. “We expect to have sufficient generation to meet demand throughout this entire winter weather event.”

ERCOT officials expected power demand to be highest from Thursday night through Saturday morning. The peak — near 70,000 megawatts — was predicted Friday morning, when grid operators expected to have nearly 85,000 megawatts of supply if all goes as planned.

“We do expect to have sufficient generation supply to meet the forecasted demands,” said Pablo Vegas, ERCOT’s president and CEO.

Of course, in an extreme scenario, the grid could still face rolling blackouts or tight conditions, and ERCOT could still issue a conservation notice. There may also be local power outages that have nothing to do with the viability of the power grid, caused by things such as wind knocking trees onto power lines.

See here for the background. We’ll find out soon enough. You’ll forgive me, and millions of other Texans, if we remain skeptical. I hope you all stay warm and safe, and that we have a good long time before we have to worry like this again.

Are we emotionally prepared for the oncoming freeze?

Dec 20th, 2022

by Charles Kuffner.

3 comments

That’s the real question at this point.

ERCOT on Friday notified power generators in Texas that they need to be online and ready to provide power during an expected wave of cold air that could drop overnight temperatures into the 20s late next week.

The Electric Reliability Council of Texas, the state’s nonprofit grid operator, issued the notice effective Dec. 22-26, though officials said they expect there will be enough power to meet demand.

The state’s power grid has been bolstered since a February 2021 winter storm knocked out power to large parts of Texas for several days and was linked to about 200 deaths. During that storm, demand for power soared while power generation equipment froze, knocking several producers offline.

“As we monitor weather conditions, we want to assure Texans that the grid is resilient and reliable,” said Pablo Vegas, ERCOT President and CEO. “We will keep the public informed as weather conditions change throughout the coming week.”

The coming burst of cold isn’t expected to be as strong as what was seen during the 2021 freeze, according to Space City Weather.

“While we will continue to watch this forecast very closely, we do not believe that the intensity, duration, or impacts of the cold will rival what we saw in 2021, which saw mid or low teens for lows,” wrote Space City Weather meteorologist Matt Lanza.

In the wake of the historic storm almost two years ago, state officials forced ERCOT to improve the power grid and make it less likely to falter in severe weather.

[…]

Ed Hirs, an energy fellow with the University of Houston, said those changes still fall short of larger market concepts he said could strengthen the grid’s reliability. The Public Utility Commission, which oversees ERCOT, is reviewing proposals for doing that and is expected to vote on a proposal recommendation at its Jan. 12 meeting. The Texas Legislature will debate the recommendation and other options during the 2023 legislative session.

“It takes more than 20 months to fix something broken over 12 years of underinvestment,” he said. “We’ll find out if the Band-Aids the PUC put in place will hold.”

That’s where I am right now, as I remember the forty-plus hours that we went without power in February of 2021. My family was pretty well equipped to handle the cold – not “fuck off to Cancun” privileged, but we were never in any real danger. Even with that, it was very unpleasant. We had our pipes bust in 13 places – thankfully, we were able to get a plumber out quickly to fix that – we lost a Meyer lemon tree that had produced a lot of fruit over the years, and it was just damn traumatic on the girls. I’m a little in denial about this freeze coming in, for reasons I can’t quite grasp other than I’m an idiot and this is how I cope with stuff like this. If the grid does fail in spectacular fashion again, the one thing we have learned is that there won’t be any political consequences for it. There’s never an election around when you really need one. Anyway, I hope we all manage to stay warm this time, with the exception of Greg Abbott and everyone on his campaign staff. The rest of you, bundle up and hope for the best. TPR, Reform Austin, and the Trib have more.

Beto tries again to get ridiculous defamation lawsuit dismissed

Dec 8th, 2022

by Charles Kuffner.

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Hope he has better luck here.

The gubernatorial election is over, but Kelcy Warren’s defamation lawsuit against Beto O’Rourke lives on.

Warren, the Dallas pipeline tycoon, sued O’Rourke in February over accusations he made on the campaign trail that Warren effectively bribed Gov. Greg Abbott with a $1 million contribution following the 2021 power grid collapse. The lawsuit has since been working its way through the legal system, and a state appeals court heard oral arguments Wednesday on O’Rourke’s motion to dismiss it.

Addressing a three-judge panel at the Third Court of Appeals, O’Rourke lawyer Chad Dunn argued that O’Rourke’s scrutiny of the donation was protected by the First Amendment and involved someone who had become a public figure.

“The minute you give $1 million to a gubernatorial candidate in one of the largest states, in Texas, you can expect attention,” Dunn said. “Mr. O’Rourke’s attention was not libel or slander.”

Warren’s lawyer, Dean Pamphilis, maintained his client is a private citizen.

“What they’re asking you to do here is to conclude that a million-dollar — or any — campaign contribution makes you a public figure, opens you up to attack that you can’t defend against unless you prove actual malice, and there is no precedent for that whatsoever,” Pamphilis said.

[…]

Both lawyers suggested the case has broader stakes for freedom of speech and electoral politics.

“Do we wanna live in a world where after political campaigns, we’re gonna have jury trials about what candidates said along the way?” Dunn said.

See here for the last update. I maintain this is a nuisance suit being brought by a fabulously wealthy dude who wants to have big influence over politics and lawmaking but doesn’t want to be held accountable for it. He absolutely does not deserve this level of protection from his own actions.

Do we actually know how to fix the grid?

Nov 23rd, 2022

by Charles Kuffner.

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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.

By the way, the grid is still not fixed

Nov 3rd, 2022

by Charles Kuffner.

Comments are off for this post

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.

Beto still seeking to dismiss oligarch’s lawsuit against him

Aug 23rd, 2022

by Charles Kuffner.

4 comments

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

Aug 20th, 2022

by Charles Kuffner.

Comments are off for this post

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.

More on your forthcoming phone bill increase

Aug 13th, 2022

by Charles Kuffner.

Comments are off for this post

The Chron gets on the story.

Texans who use a phone should expect to pay more for that service, thanks to a startling rate increase adopted by the Public Utility Commission of Texas last month.

Commissioners in July voted to increase a longstanding surcharge assessed on telecommunications providers’ receipts for voice services to 24 percent from 3.3 percent. The new rate, which took effect Aug. 1, will add couple of dollars a month for a consumer with a typical individual cell phone plan, and potentially several times that for customers with family plans, or those who pay for calls on a per-minute basis.

“It’s unprecedented,” said Rusty Moore, COO of BBT Telecom, a provider headquartered in Alpine, and board president of the Texas Telephone Association.

[…]

The PUC, in a statement, said the increased fees were imposed on the telecom companies, and they “are not required” to pass on the costs onto residential and business customers. But in practice, telecommunications providers typically choose to do so, the agency explains in a separate Universal Service Fund fact sheet.

T-Mobile, for example, has begun notifying customers that increased fees will show up on their bills starting this month. The exact increase will depend on the customer’s plan.

The change will remain in effect for months, if not longer. Rich Parsons, the agency’s spokesman, said the PUC plans to reduce the fee in about a year as the fund is replenished. But, he added, the rate may not drop back to its previous level of 3.3 percent unless the commissioners vote accordingly.

“It is too soon to know how much the rate will be reduced,” he said.

While the Texas Telephone Association heralded the initial court victory, Moore explained that the PUC’s approach to covering the gap is really not what the organization had in mind, or considers best. In 2021, TTA had backed legislation that would have extended the universal service fee to voice over internet protocol service providers — which allow users to make phone calls over the internet —as well as traditional providers. The bill passed the Texas Legislature with overwhelming support but was vetoed by Gov. Greg Abbott.

It would be better, Moore argued, to have “a much longer glide path” to restoring the funding with more modest rate increases over a longer period..

“This is not what we advocated for in any way, shape, or form,” he said.

Moore’s company, BBT, reckons higher cost residential consumers approximately $4.61 per month, and business customers $6.21.

See here for the background. This story puts some actual numbers on the increase – as noted, how much your bill will go up depends on your carrier and your plan – but just implies the connection to Greg Abbott. At least now this is known to more people. Feel free to help them understand where it came from.

When we say “fix the grid”…

Aug 8th, 2022

by Charles Kuffner.

Comments are off for this post

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.

Your phone bill is about to go up

Jul 28th, 2022

by Charles Kuffner.

Comments are off for this post

Surprise!

Attention all Texans who use a cell phone or landline: The Watchdog has bad news.

Starting with September’s phone bill, your bill is going up.

I can’t provide a specific number for you except to say that all Texas phone users are about to contribute to a $210 million fund to pay a backlog of debt owed to rural telephone companies and phone co-ops.

Although I can’t be specific about your increase, I can show you below how to get an estimate of your particular price jump.

In my case, the increase for this surcharge — called the Texas Universal Service Fund — will boost the USF fee on my bill from $2 a month to $14.

Who to blame for this fiasco? Our old friends who previously ran the (Public) Utility Commission before they were bounced out for incompetence after the February 2021 freezeout disaster. (Remember I took away the “P” away until the UC shows greater care for the public.)

Another culprit here is Gov. Greg Abbott.

Both had a chance to fix this, but both backed out. I’ll show you why.

If you get a sense of déjà vu that you’ve heard this before, it is similar to the electricity crisis.

Just like with the electricity crisis, Abbott and his previous slate of (p)UC commissioners abandoned us by the side of the road, drove off and left us paying the bills.

Every month, Texas phone users pay toward the Universal Service Fund so that dozens of rural telephone companies can provide phone service to several million Texans who live in remote areas. The cost of wiring is too expensive.

In the past several years the (p)UC fell behind in making the payments mandated by the Texas Legislature. The rate was 3.3% of the basic service cost on your phone bill.

In June 2020, the (p)UC staff recommended that the fee increase to 6%, but commissioner Arthur D’Andrea blocked it, saying “This is not a time when we should be raising taxes on people.”

The (p)UC chair, DeAnn Walker, said to “leave the fund as it is.”

When the Texas Legislature tried to fix the backlog last year, Abbott vetoed the bill, saying “It would have imposed a new fee on millions of Texans.”

Well, I’m all for blocking fees, but in this case, by avoiding the problem, the new rate jumps from 3.3% to a whopping 24%.

“We have been baffled by this from the beginning,” says Mark Seale of the Texas Telephone Association about state leaders’ avoidance of this growing debt. “If they’d raised the rate two years ago at 6% they would have avoided this entire thing.”

Annoying! The reason this is happening now is because the Texas Telephone Association filed a lawsuit against the PUC and won in court, with the ruling upheld by the appeals court. The PUC responded with the fee hike, which goes into effect on August 1. I think the reason why Abbott acted as he did is simple enough: He got to claim the credit for blocking the more modest fee increase, with the chance that it would end there. Now that that has blown up, it’s more complicated to pin on him, since generally speaking one doesn’t associate the governor with one’s phone bills. It’s also a typical case of the followup story being of a far lower profile than the initial one. As craven as Greg Abbott is, it’s hard to see this landing on him. But at least now you know.

C’mon, we should get to see the city’s after-action report on the freeze

Jun 13th, 2022

by Charles Kuffner.

1 comment

This is silly.

Houston will not release its retrospective report on the 2021 winter freeze, citing a post-9/11 law shielding information that could be exposed by terrorists or criminals.

The city drafted a report, called “After-Action Report/Improvement Plans for the 2021 Winter Storm,” after the February freeze, when plunging temperatures crippled the state’s electrical grid and led to hundreds of deaths across Texas.

The prolonged power outages, paired with tens of thousands of burst water pipes, also brought down Houston’s water system. The city at times was unable to send water to customers, including the Harris County Jail and parts of the Texas Medical Center. The system was under a state-mandated boil water advisory for four days. More than a dozen generators failed at city water plants, inhibiting their ability to withstand the electrical outages.

The after-action report includes information about the city’s response and adjustments it has made to plan for future events. It details operational coordination, communication procedures, and emergency medical services, among other information.

The Chronicle requested the report in February 2022 under the Texas Public Information Act, but the city sought the opinion of the attorney general’s office, which said the city must withhold the document. City attorneys argued the information could help criminals or terrorists plot an attack.

The Texas Government Code says municipalities must withhold information that is collected “for the purpose of preventing, detecting, responding to, or investigating an act of terrorism or related criminal activity,” and relates to staffing requirement and tactical plans. It also allows an exemption for assessments about how to protect people, property or critical infrastructure from terrorism or criminal activity. Those exemptions were added as part of the Homeland Security Act, passed by the Texas Legislature in 2003.

[…]

Joseph Larsen, a Houston attorney who has worked on public information cases, said the issue lies in the broad interpretation of the exemptions by governments seeking to withhold documents, the attorney general’s office tasked with enforcing it, and the courts that review those decisions.

“Their hands are not tied, that’s just ridiculous. They can release the report if they want to,” Larsen said of the city. “This is one of the very worst exceptions… It can be used to basically withhold anything.”

Governments often use the terrorism exemption to the Texas Public Information Act to shield weather readiness plans, Larsen said. Similar arguments were made to conceal plans made after Hurricane Ike. And the city is not the only one to use it for the winter storm. The Public Utility Commission, which oversees the state’s electrical grid, has been raising the same argument, according to Larsen.

The open records law is supposed to be “liberally construed in favor of granting a request for information,” the attorney general’s office has said. Exceptions to that rule should be interpreted narrowly, Larsen said.

“They’re not being narrowly interpreted, and that’s just a fact,” Larsen said. “They allow government bodies to cover their behinds for any specific event, and it prevents the public from actually fixing the problems, which is the whole point of freedom of information.”

I can believe that the existing law could be interpreted broadly enough to exclude this after-action report, and I can certainly believe that Ken Paxton’s office would prefer a sufficiently broad interpretation so as to keep most government activity under wraps. That doesn’t mean this is a good idea or that it’s the correct interpretation of the law. I don’t see what’s wrong with just doing a little redaction if there is some legitimately sensitive operational data in there. Blocking the whole thing, especially when there has already been reporting about what the city will do differently now, seems to me to serve no one. We can do better than that.

I’m sure they’ll evaluate themselves objectively

Jun 6th, 2022

by Charles Kuffner.

2 comments

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.

How much is Greg Abbott sweating right now?

May 15th, 2022

by Charles Kuffner.

1 comment

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:

.
Wholesale electricity prices have been super high most of the afternoon, as power has become increasingly scarce.

— Matt Largey (@mattlargey) 5:18 PM – 13 May 2021

.
Priorities: While your governor was throwing a tantrum about brown babies getting the food they need electric plants were failing, leading to a call for energy conservation across Texas.

— Scott Braddock (@scottbraddock) 6:15 PM – 13 May 2021

.
30 years of iron-fist Republican rule in Texas, and the best they can do is: “please set your AC to 78.”

— Gene Wu (@GeneForTexas) 11:11 AM – 14 May 2021

.
Right?

— Nathan Ryan (@nthnryn) 5:02 PM – 14 June 2021

The classics always have something to say to us.

More on the oligarch suing Beto

Apr 2nd, 2022

by Charles Kuffner.

3 comments

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

Mar 23rd, 2022

by Charles Kuffner.

Comments are off for this post

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:

.
– O’Rourke motion to transfer venue: https://static.texastribune.org/media/files/b308730737b5ef5c0ef3b84757a813f0/warrenvorourke_motiontotransfervenue.pdf
– O’Rourke answer and jury demand (contingent upon the venue change): https://static.texastribune.org/media/files/7b960a97544c20688318af3966e919f8/warrenvorourke_answerandjurydemand.pdf

— Patrick Svitek (@PatrickSvitek) 8:04 PM – 21 March 2022

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

Mar 8th, 2022

by Charles Kuffner.

6 comments

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.

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

Mar 1st, 2022

by Charles Kuffner.

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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

Feb 24th, 2022

by Charles Kuffner.

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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.

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

Feb 16th, 2022

by Charles Kuffner.

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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.

How the grid held up

Feb 8th, 2022

by Charles Kuffner.

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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.

Okay, so maybe there will be some blackouts

Feb 2nd, 2022

by Charles Kuffner.

1 comment

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?

Jan 23rd, 2022

by Charles Kuffner.

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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.

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

Jan 13th, 2022

by Charles Kuffner.

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[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

Jan 4th, 2022

by Charles Kuffner.

1 comment

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

Dec 31st, 2021

by Charles Kuffner.

4 comments

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

Dec 10th, 2021

by Charles Kuffner.

Comments are off for this post

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

Dec 7th, 2021

by Charles Kuffner.

2 comments

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

Dec 5th, 2021

by Charles Kuffner.

2 comments

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

Dec 2nd, 2021

by Charles Kuffner.

3 comments

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.

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