natural gas

More on the oligarch suing Beto

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

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

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

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

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

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

[…]

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

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

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

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

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

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

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

Beto responds to oligarch’s lawsuit

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.

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

Feb 16th, 2022

by Charles Kuffner.

Comments are off for this post

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.

Comments are off for this post

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.

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

Jan 13th, 2022

by Charles Kuffner.

Comments are off for this post

[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.

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.

Our cow poop future

Dec 10th, 2021

by Charles Kuffner.

1 comment

It’s a resource we have a lot of, to be sure.

TotalEnergies plans to build its first biomethane plant in the Texas Panhandle to produce renewable transportation fuel from cow manure.

The French oil major on Tuesday said it has partnered with California-based Clean Energy Fuels Corp. to construct a biomethane plant on the Del Rio Dairy Farm in Friona, Texas, where it plans to produce more than 40 gigawatt hours of biomethane every year. The biomethane produced at the dairy farm will be distributed across the country through Clean Energy’s fueling station network, supplying renewable natural gas to as many as 300 trucks a year.

“We are pleased to consolidate our entry into the U.S. biomethane market by jointly developing this first production unit on the Del Rio Dairy farm, through our joint venture with Clean Energy,” said Laurent Wolffsheim, TotalEnergies’ senior vice president of green gases and growth. “This project marks another step in TotalEnergies’ transformation into a multi-energy company, and in the implementation of its ambition to be a major player in renewables.”

Oil and gas companies are increasingly investing in biogas and alternative fuel projects as they face mounting pressure from governments and investors to avoid the worst consequences of climate change. TotalEnergies said it expects its Texas biomethane project will divert 45,000 tonnes of carbon dioxide emissions annually by substituting fossil fuels with renewable natural gas made from cow manure, a significant source of methane emissions.

You can supply your own Ted Cruz joke here. I don’t actually know how much of an improvement biogas is over other options, from a climate change perspective. I hope it’s worthwhile, if only for the long term humor potential. And that’s your important cow poop news update for the week.

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.

We’re still vulnerable to blackouts

Nov 28th, 2021

by Charles Kuffner.

3 comments

So says ERCOT.

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

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

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

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

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

[…]

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

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

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

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

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

FERC report on the freeze

Nov 20th, 2021

by Charles Kuffner.

Comments are off for this post

It was lack of weatherization all along.

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

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

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

[…]

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

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

Among their findings were:

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

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

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

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

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

.
“an Abbott tax” https://texasmonthly.com/news-politics/beto-running-for-texas-governor/

— Erica Greider (@EricaGreider) 12:33 PM – 16 November 2021

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

Those pesky high utility rates

Nov 16th, 2021

by Charles Kuffner.

3 comments

Still a problem.

Those of us who lived through Winter Storm Uri have hardly forgotten the experience, of course. But we’ll have a little reminder of it on our gas bills. Every month. For the next decade. At least.

And should we face a similar winter weather disaster soon, as we may, well, that’s all right — any costs incurred then can simply be added to the tab, too.

“There’s a huge moral hazard here,” says Doug Lewin, an energy consultant based in Austin who, like many Texans, sustained serious property damage in February, thanks to a busted pipe.

The Railroad Commission of Texas on Wednesday approved a plan under which the Texas Public Finance Authority will issue $3.4 billion in state-backed bonds to pay back the natural gas suppliers that remained in operation during the February storm.

The move has been in the works for a while. During the crisis, as you no doubt recall, the price of gas soared to historic heights, as utilities scrambled over limited supplies. A Bloomberg analysis found that gas producers reaped $11 billion in profits as a result.

Those costs would have been passed on to consumers directly, but legislators this year passed a measure, House Bill 1520, allowing for the bill to be spread out via the securitization process. As ratepayers, we’re still on the hook for the $3.4 billion, but we’ll pay it back in smaller increments, over a longer period of time; utilities expect the costs for each customer to be roughly $5 a month.

The House Research Organization, in its bill analysis, summarized the argument from supporters: “State policies have been cited as contributing factors that led to the widespread power outages experienced by millions of Texans. Therefore, it would be appropriate for the state to play a role in minimizing the impact of the storm to ratepayers and utilities, including through securitization of certain costs.”

[…]

Industry executives and trade associations have suggested that stronger state action is not necessary because power producers themselves have an incentive to winterize. If they weren’t able to produce during Uri, they missed out on an unusually profitable week. During the course of the storm, natural gas spot prices soared across the country. And the Electric Reliability Council of Texas set prices at $9,000 per megawatt-hour — the highest allowable rate and several hundred times higher than the typical rate — in a desperate effort to get more power on the grid.

But that logic doesn’t really hold up to scrutiny. If every producer had adequately winterized, none of them would have been able to make hay over the situation. From a coldly calculating perspective — if we’re just looking at the heartless logic of economic incentives — the optimal move would be to partially weatherize; that way, in the event of another storm, you would have less product to sell, but at comically higher prices.

“I’m not one of these people who thinks the oil and gas industry is evil or something like that, but they need a clear, strong regulatory signal of what they need to do,” said Lewin. “They are for-profit businesses. If they don’t have a clear regulatory signal, they will follow price signals — and the price signal tells them these kind of events are great for the bottom line.”

“What industry doesn’t like making 11 billion in one week?” he added.

Executives themselves seem content with the current regime. In June, for example, oilman Kelcy Warren donated $1 million to Gov. Greg Abbott’s reelection campaign. His company, Energy Transfer Partners, had its best quarter ever during the storm, raking in an additional $2.4 billion as a result.

We’ve discussed this before. Author Erica Greider notes that this will be an issue in the race for Railroad Commissioner. I hope she’s right, and that it’s more than just in that race. The more we talk about it, the better those chances are.

And it’s not just your heating bills.

Have you looked at retail electricity prices lately?

On the suggestion of readers, I pulled up the state-sponsored marketing site — PowerToChoose.org (beware of imitators) — and it was like I stuck my finger in a wall socket. I was shocked.

For as long as The Watchdog can remember, the opening pages usually highlighted kilowatt hour rates of around 6 to 9 cents.

Now the opening pages show double-digit pricing of 10 cents or more.

Prices of the two dominant players in the market — TXU Energy and Reliant Energy — offer an added jolt.

TXU shows one-year plans for 1,000 kWh around 12 cents. Another listed plan offers a 15.9 cents rate.

On the TXU website, I saw different plans that varied from those presented on the state website. A reminder that with all companies, always remember to check both PowerToChoose and that company’s website.

Reliant shows plans on the state site from 13.4 cents to 15.2 cents for various kWh usage.

[…]

What do Texas experts say about these price jumps?

Ed Hirs, an energy fellow at the University of Houston, says the banning of Griddy, which sold power at wholesale prices, removed a major incentive for retailers to keep their prices down to compete.

He says the increase in natural gas prices we’re seeing is another cause because many Texas power plants run on gas. He blames hurricanes which struck the Gulf of Mexico.

He also blames the Texas government’s bailout allowing companies to recoup billions of lost dollars during the horrific February freezeout through the purchase of $6.5 billion in bonds. Those costs will be passed on to consumers.

When the Texas Legislature sided with companies over consumers, he said, “You know the game is fixed.”

Beth Garza, who served until 2019 as the independent monitor of grid operator ERCOT, said companies selling one-year contracts must anticipate higher prices expected to increase during the length of those contracts.

James Boyle, who once led Texas’ Office of Public Utility Counsel, said: “We all know that what happened in the legislative session is that everybody was taken care of except the home folks. And the consumer pays for everybody else’s mistakes. I think that’s reflected in those prices.”

Kelso King, who runs King Energy Consulting and monitors all Public Utility Commission meetings, warns that still to come is the pass-through to consumers of the multi-billion-dollar bailout for energy companies. That was the solution approved by lawmakers and Gov. Greg Abbott.

King added, “For decades, policymakers kept saying that the great thing about a competitive market was that all of the risks would be borne by generators instead of ratepayers. But when it came down to it, unsurprisingly, end use customers were left holding the bag.”

More fruit of the same tree. I agree that the original appeal to our “free market” in electricity was that providers would bear the risk of price fluctuations, but other than the late and not-really-lamented Griddy that hasn’t been the case. Of course, given the massive effect that big donors have on the system, how can you even call it a free market?

Luke Warford announces for Railroad Commissioner

Nov 12th, 2021

by Charles Kuffner.

1 comment

He’s got the right idea about what to run on.

Luke Warford

A 32-year-old former top staffer for the Texas Democratic Party is running for a spot on the three-person commission regulating the state’s oil and gas industry, hoping to unseat Republican incumbent Wayne Christian with a chief focus on the power grid failure earlier this year.

Luke Warford, the party’s former chief strategy officer, said in an interview with The Texas Tribune that he is running for the Texas Railroad Commission “because I genuinely think this is one of the most important elected offices in the state and because the current people serving on the commission are only looking out for their interests and the interests of their friends, not the interests of Texans.”

“No time was that clearer than during the winter storm,” Warford said, faulting the commission for not doing enough to ensure natural gas companies “weatherize” their facilities, or prepare them for extreme weather.

Christian announced months ago that he would seek a second term in 2022, and Warford is an underdog. The 2020 Democratic nominee for railroad commissioner, Chrysta Castañeda, lost by 9 percentage points, despite getting national money and facing a little-known Republican, Jim Wright, who had unseated an incumbent in the primary.

Warford is undeterred, saying he believes the grid failure “fundamentally changes the calculus” for the race. The latest University of Texas/Texas Tribune poll found that voters are very dissatisfied with how lawmakers responded to the crisis, with 18% approving and 60% disapproving.

Warford may or may not have the primary to himself – filing season still hasn’t begun, so we just don’t know yet. He may be a great candidate on paper, but we’ve all seen good candidates struggle to make themselves known to primary voters because they don’t have any money, and we know what kind of random results we can get because of it. So while I’m glad to see him in the race and I’m especially glad to see the issues he wants to prioritize, let’s not get ahead of ourselves.

All that said, Warford has the right idea for how to position this campaign. The freeze and the blackout are necessarily going to be big issues, and the Railroad Commission is uniquely placed to do something about what happened. I fully expect there will be similar messaging from the top of the ticket, which will help. I mean, probably 90% of the state has no idea who or what the Railroad Commission is, but thanks to that deeply scarring incident from earlier this year, more people have likely at least seen a mention of it, and should be receptive to hearing about what they have (not) done and what they can do to make sure another disastrous freeze-induced blackout doesn’t happen again.

Both incumbent Wayne Christian, a former backbencher in the Lege, and Democrat Grady Yarbrough, an annoying perennial candidate, were bigtime underperformers in the 2016 election. Both got the fewest votes for their party on the statewide ballot. Nearly 750K voters, a bit more than 8.5% of the total, picked one of the third-part candidates instead. Some of that is because voters’ attention tends to wander a bit in those lower-profile races, and some of that was because those two were and are unqualified chuckleheads. We can at least take care of our side of that equation this year. Beyond that, raising enough money to make sure the voters know who’s who on this ballot is going to be critical. I welcome Luke Warford to the race and hope he can pull his weight and get the support he’s going to need if he’s the nominee. The Chron has more.

Our latest wake-up call about our power grid

Oct 2nd, 2021

by Charles Kuffner.

1 comment

Same song, next verse.

Federal energy officials vowed to ensure that Texas improves its electricity grid and natural gas system after widespread blackouts during the February freeze led to more than 200 deaths and billions of dollars in property damage.

The Federal Energy Regulatory Commission and the North American Reliability Corp. on Thursday presented their preliminary findings from the winter storm and outlined a series of familiar recommendations to prevent another catastrophic power failure as climate change brings about more severe weather that threatens the nation’s power grids.

These recommendations, similar to the ones FERC issued in the aftermath of the 2011 Texas blackouts, would require power plants and natural gas producers to protect critical equipment from freezing temperatures, to update power generators that experience freeze-related outages and provide compensation for generators to recoup weatherization costs.

“This is a wake-up call for all of us,” FERC Chairman Rich Glick said. “We must take these recommendations seriously, and act decisively, to ensure the bulk power system doesn’t fail the next time extreme weather hits. I cannot, and will not, allow this to become yet another report that serves no purpose other than to gather dust on the shelf.”

Glick said he was “extremely frustrated” that Texas energy regulators and the state’s grid manager ERCOT failed to heed FERC’s recommendations after a February 2011 winter storm left more than 3 million Texans without power as the Super Bowl was played outside Dallas.

You and me both, buddy. You and me both.

Had Texas followed FERC’s guidance a decade ago, the state could have avoided February’s deadly and devastating blackouts, he said.

“In this day and age, we have people that froze to death because of power outages. That’s beyond unacceptable,” Glick said. “The worst part about this, one of the points that frustrates me the most, is that some of it was avoidable.”

[…]

In a 31-page report published Thursday, FERC said the February winter storm caused the largest forced power outages in the nation’s history, and was the third largest blackout after the Northeast blackout in 2003 and the West Coast blackout in 1996. The February freeze was the fourth severe winter event over the past decade, knocking out 61,800 megawatts of power across the Midwest and South, including Texas and Louisiana.

The Texas power grid managed by ERCOT received the harshest effects of the freeze. The storm knocked out an average of 34,000 megawatts of power on ERCOT’s grid, nearly half of its record winter demand load of 69,871 megawatts.

FERC said the biggest factors contributing to power plants failing were the lack of weatherization of critical equipment and natural gas supply issues at power plants. Nearly 58 percent of the power generators that went offline during the storm were natural gas plants.

You can find the FERC report here and their press release here. If you want to find any plan that Greg Abbott has to take action on this report, you’re going to have to look a lot harder.

Please enjoy the higher natural gas prices you’ll soon be paying

Sep 1st, 2021

by Charles Kuffner.

4 comments

And by “enjoy”, I mean “blame Greg Abbott”.

Texans are on the hook for $3.6 billion in natural gas costs incurred by utilities during one freezing week in February — a burden consumers will bear for a decade or longer.

During that same winter week, several natural gas pipeline companies and traders made billions of dollars as they transported and sold natural gas at sky-high prices when supplies were short.

Pipeline companies Energy Transfer of Dallas and Kinder Morgan of Houston made $2.4 billion and $1.1 billion, respectively, while British oil major BP made more than $1 billion from its natural-gas trading business during the deadly, historic storm, according to company filings and analyst estimates. Houston pipeline company Enterprise Products Partners said it made $250 million for transporting and selling natural gas at high prices to utilities, industrial customers and power generators during the storm.

Ultimately, Texans will fund these companies’ profits, said Jim Krane, an energy fellow at Rice University’s Baker Institute for Public Policy.

“It’s pretty clear this is a wealth transfer from the public to investors and traders who could capitalize on the high prices,” Krane said. “The frustrating thing is, even though people were shivering in their homes, their (natural gas) bills are going up anyway. They’re still going to have to pay for this. It’s really a slap in the face.”

More than 1.8 million CenterPoint Energy customers in the Houston area are responsible for the $1.14 billion natural gas bill incurred by the Houston utility when it had to quickly buy natural gas at sky-high prices after demand soared and supplies plunged during the storm.

[…]

Utilities such as CenterPoint pass along the cost of natural gas to customers without any markup and instead make money on its natural gas business through state-regulated distribution fees.

CenterPoint on Friday filed a request with regulators to finance the billions of dollars in excess gas costs. The paperwork submitted to the Railroad Commission outlined how much the financing would cost Houstonians in the coming years, reflected in their monthly bill.

The average natural gas bill in the Houston area — about $30 — could go up by $2 to $5 a month starting next year if CenterPoint is allowed to use state-issued bonds to finance what it owes for that high-priced gas. That means Houstonians could pay as much as $60 more a year for their natural gas over the next decade.

If CenterPoint’s request is rejected, it would levy a fee of $15 to $40 a month over the next year, pushing the average gas bill to almost $80 during summer and to more than $100 in winter. That means Houstonians could pay as much as $480 more for their natural gas over the next year.

The cost would hit everyone in CenterPoint’s territory, even if they couldn’t turn on their natural-gas heating systems because of rolling blackouts, Krane said.

“You either buy your local bill collector a six-pack or a gym membership,” Krane said. “It’s not insubstantial. For some people, it’s going to be pretty tough news if you’re just hanging on.”

See here for some background. As a reminder, this is how the system was designed to work. And of course, Greg Abbott benefited from that transfer of wealth, because that too is how the system is designed to work.

A timeline of the blackout

Aug 9th, 2021

by Charles Kuffner.

3 comments

Of interest.

A new report from University of Texas at Austin energy experts lays much of the blame for power outages during the state’s deadly February freeze on the failure of natural gas producers to fully weatherize their facilities.”

The natural gas system could not meet demand,” the authors of the 101-page study wrote. “The production losses stemmed principally from freeze-offs, icy roads and electric outages to the equipment used in the natural gas industry.”

UT issued the study Tuesday, the same day the state’s health department revised its official death toll from the disaster, raising it to 210 from 151. However, at least one data-driven report suggests the actual number may exceed 700.

[…]

For the study, UT researchers looked at the performance of 27 natural gas facilities during the freeze and found that as temperatures dropped, the operators’ pipelines and equipment ceased to function, resulting in an 85% falloff when power companies needed the fuel.

Indeed, 18 of the natural gas facilities it studied had “zero output” on February 17, the peak of the storm.

In addition to their human cost, the failures resulted in massive charges for the state’s power generators, according to the report. CPS Energy, for example, tallied losses on natural gas fuel purchases of as much as $850 million, and losses on purchased power costs of as much as $250 million.

The 101 page report is here. Neither of us is likely to read through the whole thing, but the Findings section of the Executive Summary give you the main points:

The failure of the electricity and natural gas systems serving Texas before and during Winter Storm Uri in February 2021 had no single cause. While the 2021 storm did not set records for the lowest recorded temperatures in many parts of the state, it caused generation outages and a loss of electricity service to Texas customers several times more severe than winter events leading to electric service disruptions in December 1989 and February 2011. The 2021 event exceeded prior events with respect to both the number and capacity of generation unit outages, the maximum load shed (power demand reduction) and number of customers affected, the lowest experienced grid frequency (indicating a high level of grid instability), the amount of natural gas generation experiencing fuel shortages, and the duration of electric grid operations under emergency conditions associated with load shed and blackout for customers. The financial ramifications of the 2021 event are in the billions of dollars, likely orders of magnitude larger than the financial impacts of the 1989 and 2011 blackouts.

Factors contributing to the electricity blackouts of February 15-18, 2021, include the following:

All types of generation technologies failed. All types of power plants were impacted by the winter storm. Certain power plants within each category of technologies (natural gas-fired power plants, coal power plants, nuclear reactors, wind generation, and solar generation facilities) failed to operate at their expected electricity generation output levels.

Demand forecasts for severe winter storms were too low. ERCOT’s most extreme winter scenario underestimated demand relative to what actually happened by about 9,600 MW, about 14%.

Weather forecasts failed to appreciate the severity of the storm. Weather models were unable to accurately forecast the timing (within one to two days) and severity of extreme cold weather, including that from a polar vortex.

Planned generator outages were high, but not much higher than assumed in planning scenarios. Total planned outage capacity was about 4,930 MW, or about 900 MW higher than in ERCOT’s “Forecasted Season Peak Load” scenario.

Grid conditions deteriorated rapidly early in February 15 leading to blackouts. So much power plant capacity was lost relative to the record electricity demand that ERCOT was forced to shed load to avoid a catastrophic failure. From noon on February 14 to noon on February 15, the amount of offline wind capacity increased from 14,600 MW to 18,300 MW (+3,700 MW).2 Offline natural gas capacity increased from 12,000 MW to 25,000 MW (+13,000 MW). Offline coal capacity increased from 1,500 MW to 4,500 MW (+3,000 MW). Offline nuclear capacity increased from 0 MW to 1,300 MW, and offline solar capacity increased from 500 MW to 1100 MW (+600 MW), for a total loss of 24,600 MW in a single 24-hour period.

Power plants listed a wide variety of reasons for going offline throughout the event. 3 Reasons for power plant failures include “weather-related” issues (30,000 MW, ~167 units), “equipment issues” (5,600 MW, 146 units), “fuel limitations” (6,700 MW, 131 units), “transmission and substation outages” (1,900 MW, 18 units), and “frequency issues” (1,800 MW, 8 units). 4

Some power generators were inadequately weatherized; they reported a level of winter preparedness that turned out to be inadequate to the actual conditions experienced. The outage, or derating, of several power plants occurred at temperatures above their stated minimum temperature ratings.

Failures within the natural gas system exacerbated electricity problems. Natural gas production, storage, and distribution facilities failed to provide the full amount of fuel demanded by natural gas power plants. Failures included direct freezing of natural gas equipment and failing to inform their electric utilities of critical electrically-driven components. Dry gas production dropped 85% from early February to February 16, with up to 2/3 of processing plants in the Permian Basin experiencing an outage.5

Failures within the natural gas system began prior to electrical outages. Days before ERCOT called for blackouts, natural gas was already being curtailed to some natural gas consumers, including power plants.

Some critical natural gas infrastructure was enrolled in ERCOT’s emergency response program. Data from market participants indicates that 67 locations (meters) were in both the generator fuel supply chain and enrolled in ERCOT’s voluntary Emergency Response Service program (ERS), which would have cut power to them when those programs were called upon on February 15. At least five locations that later identified themselves to the electric utility as critical natural gas infrastructure were enrolled in the ERS program.

Natural gas in storage was limited. Underground natural gas storage facilities were operating at maximum withdrawal rates and reached unprecedently-low levels of working gas, indicating that the storage system was pushed to its maximum capability.

The ERCOT system operator managed to avoid a catastrophic failure of the electric grid despite the loss of almost half of its generation capacity, including some black start units that would have been needed to jump-start the grid had it gone into a complete collapse.

Just as a reminder, the grid was not on the first special session agenda, and as of today isn’t on the second session’s agenda. I have heard it suggested that Abbott could add grid items to the agenda, or put them on but near the bottom of the agenda for this special session, to make it harder for the Dems to be away. The main problem with that analysis is that Abbott has been busy telling everyone in sight that the grid has been totally fixed. What’s to put on the agenda if that’s really the case? His problem for now, all of ours the next time the words “rolling blackouts” get mentioned.

One million reasons why Greg Abbott thinks the grid is just fine

Jul 24th, 2021

by Charles Kuffner.

1 comment

Or 2.4 billion reasons, depending on how you want to count it.

The Texas electric grid collapse during the February winter storm killed hundreds of Texans and caused an estimated $295 billion in damages, while generating seismic gains for a small and powerful few. The natural gas industry was by far the biggest winner, collecting $11 billion in profit by selling fuel at unprecedented prices to desperate power generators and utilities during the state’s energy crisis. No one won bigger than Dallas pipeline tycoon Kelcy Warren: Energy Transfer Partners—the energy empire Warren founded and now is executive chairman of—raked in $2.4 billion during the blackouts.

That immense bounty soon trickled down to Governor Greg Abbott. On June 23, Warren cut a check to Abbott’s campaign for $1 million, according to the governor’s latest campaign finance filing, which covers January through June. That’s four times more than the $250,000 checks that the billionaire has given to Abbott in prior years—and the most he’s ever given to a state politician in Texas.

In the months after one of the worst energy disasters in U.S. history, Abbott has dutifully steered scrutiny away from his patrons in the oil and gas industry. Last month, the governor signed into law a series of bills that strengthened regulation of the state’s grid. But experts warned that lawmakers didn’t go far enough to prevent another grid failure and failed to crack down on natural gas companies. At a bill signing ceremony on June 8, Abbott proclaimed that “everything that needed to be done was done to fix the power grid in Texas.”

The unusually large contribution from the blackout’s biggest profiteer raises questions about Warren’s influence over the governor and has prompted outrage at what many see as a blatant political kickback for kowtowing to the powerful natural gas industry.

[…]

As he gears up for a reelection bid in 2022, Abbott has resisted calls to include further power grid fixes in a special session. Instead, his current special session agenda centers on sweeping “election integrity” legislation that prompted House Democrats to break quorum for the second time this year and hole up in Washington, D.C., until the session expires.

The governor has relentlessly pinned blame for the grid failure on renewable energy sources like wind and solar, Electric Reliability Council of Texas officials (ERCOT), and even the state’s giant power generators, all while ignoring the significant failures of the natural gas industry. Lawmakers watered down proposed regulations on the gas supply system in the face of aggressive industry lobbying.

By refusing to include additional grid reforms in special sessions, Abbott has ensured that the natural gas sector will avoid any further legislative scrutiny. That, experts warn, means the state’s grid remains at risk of future collapse. Earlier this month, Abbott issued another love letter to his fossil fuel benefactors, ordering his three brand-new Public Utility Commission (PUC) appointees to create incentives for fossil fuel and nuclear power generators and impose new costs on wind and solar plants.

While gas companies made huge profits during the winter storm, the financial fallout has been passed on to Texans. In May, lawmakers passed legislation that provided several billion dollars in state bonds for power companies that were waylaid by the exponential hike in energy costs. Texans will be paying that off through higher gas bills for at least the next decade.

Not really much to add to this, is there? It’s not like this is anything new, but it sure feels more blatant than usual. If there isn’t an effective advertising message in this, I don’t know what one might be.

Abbott tells the PUC to, like, “do something” about electricity and stuff

Jul 8th, 2021

by Charles Kuffner.

2 comments

He’s a Very Serious man making Very Serious proposals.

Gov. Greg Abbott on Tuesday gave state electricity regulators marching orders to “improve electric reliability.”

In a letter to the Public Utility Commission, Abbott directed the three-person board of directors, who he appoints, to take action that would require renewable energy companies to pay for power when wind and solar aren’t able to provide it to the state’s main power grid, echoing a move state lawmakers rejected in May.

Abbott also told the PUC to incentivize companies to build and maintain nuclear, natural gas and coal power generation for the grid — which failed spectacularly during a February winter storm, leaving millions of Texans without power or heat for days in below freezing temperatures.

Texas energy experts were skeptical that Abbott’s orders would actually improve the reliability of the state grid, which operates mostly independently of the nation’s two other major grids.

“What is here is not a serious or prudent plan for improving the grid,” Daniel Cohan, an associate professor of civil and environmental engineering at Rice University, said in an interview Tuesday. “It’s more of a political job favoring some [energy] sources over others. For Texans to have a more reliable power supply, we need clearer thinking that makes the best of all the sources we have.”

Abbott’s letter also called on the PUC to direct the state’s main grid operator, the Electric Reliability Council of Texas, to better schedule when power plants are offline, an issue that caused tension between state regulators and power generators after some power plants unexpectedly went offline in June and led ERCOT to ask Texans to turn their thermostats up to 78 degrees for a week during a heat wave to conserve energy.

Abbott responded to the plant outages by declaring the power grid “is better today than it’s ever been.”

Does anyone believe that? I don’t know what the odds are of another major power failure between now and, say, next November, but does anyone think such platitudes will be accepted by the public if one does happen? Even Dan Patrick thinks that power grid reform items – most of which never went anywhere during the session – should be on the special session agenda. Maybe we all get lucky and nothing bad happens any time soon, but if that’s the case it won’t be because Abbott was busy urging us all to clap louder.

We’ll be paying for the freeze for a long time

Jun 30th, 2021

by Charles Kuffner.

26 comments

What’s more, we have done nothing to prevent the same thing from happening again.

Publicly funded state agencies needing to keep the lights and heat on during the freeze racked up huge bills. In February 2020, the Texas Department of Criminal Justice, which operates the state’s prisons, paid about $1.2 million for natural gas. This February the cost soared to nearly $8.5 million.

The University of Texas-Austin paid $940,000 for gas in February 2020. In 2021: $3.65 million.

Last month, state legislators passed laws to help companies borrow billions of dollars to pay for storm-inflated power costs and bill ratepayers over time to pay it back. Yet well before that, many Texas cities that own public utility companies already had been forced to scrounge up additional millions to cover gas and electric bills hugely inflated by the storm-caused shortages.

Outside of Dallas, Denton borrowed $140 million. Georgetown, just north of Austin, borrowed $48 million to cover the cost of providing electricity to its residents during the storm. Ratepayers will have to cover that, as well as a projected $5 million in interest and costs over the term of the loan.

Other cities dipped into their savings accounts to pay the storm-inflated power costs, depleting reserve funds. Garland siphoned millions from its rainy-day account. Weatherford, a small city outside of Fort Worth, drew down $13.7 million.

Wherever the money came from, eventually it will be repaid by local citizens, said Steve Moffitt, vice president of Schneider Engineering, a Boerne-based company working with municipal utility companies across the state to find the extra money. “At the end of the day, it has to come from customers somewhere,” he said.

The small city of Hearne borrowed $1.9 million to cover costs incurred by its publicly owned electric utility company. Ratepayers will pay off the debt over the next 10 years, said City Manager John Naron.

“Usually if we get a $2 million loan, we’re fixing streets, the sewage system, street lights,” he said. “Now we’re borrowing $2 million and getting nothing for it.”

When the dust cleared on the biennial legislative session that ended June 1, one thing was clear. Although it was ordinary Texans who suffered when the freeze hit four months ago — millions were left shivering in the dark for days; hundreds died — it is also ordinary Texans who would foot much of the bill, said Tim Morstad, associate director of AARP Texas.

“Consumers are being forced to prop up the system that failed us,” he said.

[…]

The magnitude of the financial fallout is difficult to digest. Experts estimate that based on the sky-high prices, nearly $50 billion-worth of electricity was consumed in Texas during the one-week storm — 250 times the normal cost, said Beth Garza, an energy analyst for R Street who from 2014 to 2019 was ERCOT’s independent market monitor, which watchdogs the electricity market.

Companies that had gas and electricity to sell cashed in on a Uri windfall. Some Wall Street investors made millions, too.

For those forced to buy gas and electricity during the height of the freeze it was expensive at best, catastrophic at worst. Brazos Electric Power Cooperative, the state’s largest and oldest member-owned electric company, declared bankruptcy after racking up about $2 billion in charges when its generators failed.

To spare ratepayers the financial pain of getting hit with giant utility bills all at once, last month state lawmakers passed several laws to help the biggest losers borrow money and pay it back over time. The laws are complex, and analysts and companies said they are still deciphering how they will be used.

Pending high-stakes legal battles over the storm’s giant bills add more uncertainty to the final tab. “There are a zillion contractual disputes underway right now,” said Garza, pointing out that those, too, will end up costing companies – and their customers — giant legal fees.

Still, analysts projected the taxpayer tab would come to roughly between $7 and $9 billion. Yet that doesn’t include numerous other hidden costs.

The primary advantage to our market for power and electricity has always been low prices. Lots of firms offer a variety of plans, both fixed and flexible rates, and for the most part it has worked pretty well, as long as you do a bunch of research and remember to switch plans again before your low-rate plan ends and you get dumped into a default higher-rate plan. (Some people do lots of research.) All of this is predicated on the Texas energy market being geared towards low prices, and the way it does that is by not mandating capacity. There’s no backup power, no plants generating extra power that isn’t used, and that means we’re not paying for anything we’re not using. It’s efficient, and that efficiency keeps prices down.

The down side is what we saw in February. Because there was no extra capacity, when a number of plants went down, there wasn’t any power to spare. The only way to get more juice was to pay for it, and when prices are allowed to be unconstrained, you can be sure someone is going to make a buck off of it. We also learned that another key ingredient to our everyday low prices for electricity was that the power plants could be and were run as super low-cost operations, which in this context meant no money spent on weatherization. I think we all know how that turned out.

The argument in favor of our system is that we have paid a lot less for our electricity over a long period of time, so that even with the price shocks of February and the borrowing that various municipalities and utilities and co-ops have had to do, we’re still coming out ahead. But that isn’t of much help right now, and as we did nothing to change the fundamentals of our power market, we could face the same situation again at any time. People will be paying more now for what happened his past winter, and they have no insurance against a repeat. Even more, I don’t think a lot of people understand that. I don’t think we’re any more prepared mentally and emotionally for the next time this happens than we were this February. Maybe if we go another ten years before it happens again it won’t much matter. Do you want to make that bet? Like it or not, you already have.

Nobody knows why the grid was short on power

Jun 26th, 2021

by Charles Kuffner.

1 comment

Really inspires confidence, doesn’t it?

Last Monday, Texas’ main power grid operator asked Texans, mid-heat wave, to turn their thermostats to 78 degrees during the afternoon and evening for the week to reduce electricity demand on the grid after 12,000 megawatts of power generation unexpectedly went offline — enough to power 2.4 million homes on a hot summer day.

By the end of the week, that appeal from the Electric Reliability Council of Texas expired without a public announcement, and ERCOT officials still have not said why they asked Texans to cut back on electricity use.

Were there damages to the power grid infrastructure stemming from February’s deadly winter storm? Were there nefarious actors looking to manipulate the electricity market? What does this mean for power generation during the rest of the hot Texas summer?

ERCOT hasn’t said — or released data to answer any of these questions raised by industry experts. And that is exactly how the Texas power grid is supposed to work, energy experts said.

“ERCOT knows what plants fail, but not why,” said Bob King, an energy consultant in Austin who has worked in the Texas energy industry for more than 30 years.

[…]

In the meantime, ERCOT’s independent watchdog will investigate what happened. Beth Garza, who was director of the watchdog from 2014 to 2019, said that’s standard procedure after such an event.

“They will look if there is any indication if there is any nefarious or bad acting on any particular generations’ part,” Garza said.

Last week’s power generation outages marked the second time ERCOT has asked Texans to cut back on electricity use since February’s storm. Garza and other experts also raised concerns about the winter storm’s impact on “thermal” sources of energy, which in Texas are largely powered by natural gas plants.

“One thing I’d be curious about: What the effects of February’s cold weather was on thermal units,” Garza said. “Was some of that being worked on and fixed (last week)?”

We do know that it wasn’t because too many plants were down for routine maintenance, which contradicts a claim made by Greg Abbott. We may find out some more information soon, as the PUC has ordered ERCOT to release its data in the next seven days, though how much information we’ll get is not clear. The bigger point, as was made in the story, is that all this happened at a time when it wasn’t as hot as it’s going to get later in the summer. What will be in for then? Like I said, it doesn’t inspire confidence. Reform Austin has more.

We go to the next freeze with the power grid reform we have, not the power grid reform we wanted

Jun 5th, 2021

by Charles Kuffner.

8 comments

It is what it is, and what it is isn’t much.

Texas lawmakers on Sunday passed a final proposal to shore up the state’s power grid in response to this year’s deadly outage crisis, agreeing on a raft of reforms that experts welcomed but also fear won’t go far enough.

The legislation, Senate Bill 3, would require power plants and some natural gas suppliers to prepare their operations for extreme cold, a step that state regulators and many companies have avoided for decades despite repeated blackouts and promises that market incentives would ensure reliability.

It would also create a statewide emergency alert system, force industry participants to communicate more often and mandate that key gas facilities be registered as critical so their power isn’t unintentionally shut off during shortages. Hundreds of gas facilities reportedly lost power during the winter storm, pinching off fuel supplies to power plants.

[…]

The proposals address several longstanding weaknesses, though still amount to a gamble in the wake of one of the state’s deadliest natural disasters, leaving its already isolated power grid vulnerable to similar disruptions for the coming winter, before key weatherization requirements would take effect.

Energy experts have warned that without quick structural improvements to power plants, gas wells and the supply chain that connects them, millions of Texas homes could again be without power in dangerously frigid conditions. February’s storm knocked out power to an estimated 4.5 million homes and killed at least 200 people — and likely many more.

Critics also caution that the final provisions leave broad discretion to gas suppliers, who provide most of the fuel for the electricity grid. The legislation allows for minimal fines against those that don’t comply and leaves oversight of infrastructure updates to the Texas Railroad Commission, whose members receive funding from the industry and have long opposed weather requirements.

The state’s gas production fell more than 20 percent over five days during the storm.

This month, Republicans in the House rejected amendments from Democrats that would have increased penalties for gas suppliers that don’t winterize and would have required progress on winterization within six months of the measure becoming law. Democrats still praised the reforms that made it into the final draft.

“I voted for this bill because there is a lot of good in it,” Rep. Jon Rosenthal, a Houston Democrat and engineer in the oil and gas industry, tweeted shortly after the vote. “But make no mistake – this bill is not enough to ensure that we won’t have another massive blackout. It leaves much discretion to RRC/PUC/ERCOT and the guardrails aren’t nearly tight enough.”

See here, here and here for some background. We may go to a special session for the Republicans’ failure to muscle through the voter suppression bill and some of Dan Patrick’s pet priorities, but taking substantial action on the power grid will not be on the agenda. It’s always hard to say what issues will and won’t be relevant and germane to voters in the next election because you never know what else may come up, but to the extent that this issue will be debated it will be in the terms of what Abbott et al thought was important enough to bring legislators back to finish off and what was not. Whether what was actually done will make a difference or not likely won’t be known until the next big freeze, at which point we’ll see if we can add 2021 to the years we look back on as squandered opportunities to take meaningful action. Better hope it’s not next year if you’re a Republican.

Are we headed for a June special session or not?

May 29th, 2021

by Charles Kuffner.

4 comments

Too soon to tell. Right now this is just the usual end-of-session venting and frustration.

With the future of the power grid and voting laws in Texas hanging in the balance, tensions among the top political leaders in the Legislature are fueling a round of political gamesmanship that has even the future of the Texas Holocaust & Genocide Commission caught in the crossfire, one of many pawns in a larger battle over GOP priorities.

There are just four days left in the legislative session, which must end by midnight Monday. Yet with so much still unresolved, top Republican leaders in the Texas House and Senate are publicly accusing one another of torpedoing important legislation.

[…]

Gov. Greg Abbott addressed the Republican infighting during a news conference in Fort Worth on Thursday.

“If the leaders in the Legislature will stop fighting with each other and start working together, we can get all of this across the finish line,” Abbott said.

End-of-session drama is almost a given in Texas, where top leaders often clash in the closing days. But this year it is different as the Senate appears ready to take important political hostages in an attempt to force Abbott to call a special session in June, whether he wants to or not.

Just past midnight Thursday morning, the Senate appeared to try to force Abbott’s hand by refusing to take up House Bill 1600, which, if passed, would have assured the continued operation of 18 state agencies — including the Holocaust & Genocide Commission, the Texas Commission on Law Enforcement and the Racing Commission. There are other bills to keep those agencies operating, but HB 1600 is considered a backup to make sure those agencies are not placed in jeopardy unintentionally.

In Fort Worth, Abbott sent a public message back to Austin that he will not be pushed around.

“Not only am I the only one with the authority to call a special session, I get to decide when, and I get to decide what will be on that special session,” Abbott said. “And here’s what I would do if, if anybody tries to force this: It’s not going to be like it has been in the past, where we’ll have 40 items on a special session.”

Abbott said that if there is a special session, “the only thing that we’ll be putting on there are things that I want to see passed.”

Patrick, a Republican from Montgomery County, went on Spectrum News 1 on Thursday afternoon to deny he’s threatening state agencies to pressure Abbott or the House.

“I’m not holding anything hostage,” Patrick told host Karina Kling.

Instead, Patrick says the special session is necessary after the House refused to advance a bill to ban transgender girls from playing on girls scholastic sports teams.

Patrick has a long history of fighting for measures to restrict or regulate transgender Texans. In 2017, a similar bill to stop transgender children from using the bathrooms they are most comfortable with also triggered calls for a special session after the House refused to take it up. Abbott did call a special session, and the so-called bathroom bill still didn’t pass.

Patrick on social media listed other failed bills — a ban on taxpayer-funded lobbyists by city governments and legislation to stop social media companies from “censorship” — as important measures the House has blocked.

See here for the background. As the Trib notes, Abbott supports the things that Patrick is whining about, so this may be just a little show of dominance, or it may be Abbott’s usual fecklessness, or it may be that he had indigestion after ordering the burrito supreme platter for lunch on Thursday. As I said, he’s gonna do what he’s gonna do, and he may telegraph it or he may not. He’s the guy with the power, and he wants to make sure we know that.

One more thing:

All of this is happening as lawmakers still have not reached a final deal on a plan to require electricity grid suppliers and operators to winterize their facilities to prevent a repeat of the mass power outages that left millions of Texas freezing in the dark in February.

The House and Senate passed different bills, but despite that legislation being listed as a priority of nearly every elected official, lawmakers still have not announced a compromise on it.

Eh, who cares about the grid.

The Republican leaders and majorities in both chambers, though, did exactly what I feared they would do. None of the bills heading for Gov. Greg Abbott’s signature address core problems, such as the wholesale market design or the $9,000 price cap. Nothing they did will prevent another blackout of equal scale.

They did agree on more than $9 billion in bailouts for the electric utility industry that Texans will pay off over the next 20 or 30 years through mandatory charges on their utility bills. The goal is to spread the cost of the disaster to all Texans and make the monthly fee so low we do not complain.

This will bail out electricity providers who guarantee customers a set monthly rate, even though electricity is sold on a wholesale market where the price changes every 15 minutes between free and $9,000 a megawatt-hour.

When the February freeze hit and prices maxed out, many retail providers went bankrupt and left behind $2.5 billion in unpaid bills. House Bill 4492 allows the state to issue bonds to pay off those bills and charge customers a monthly fee to repay them.

Electricity co-ops also ran up huge bills for electricity used to power critical facilities. Senate Bill 1580 allows them to issue bonds estimated to total $2 billion. Again, the co-op’s customers will repay those bonds through their monthly bills.

Winter Storm Uri also triggered a 700 percent spike in natural gas prices, creating all kinds of financial pain for another sector that typically guarantees a set price. To help natural gas utilities, the Legislature authorized them to issue $4.5 billion in bonds. We will repay these on our gas bills.

“Considering the extraordinary costs incurred in the recent winter storm, customers could see a dramatic increase in their monthly bills,” Rep. Chris Paddie, R-Marshall, wrote as his intent for the bond authorizations. “This financing mechanism will provide rate relief to customers by extending the time frame over which the extraordinary costs are recovered.”

Magic of the free market, baby. Socialize that debt, and focus on the important things. It’s what they do. Reform Austin and the Trib have more.

Abbott knew the blackouts were coming

May 26th, 2021

by Charles Kuffner.

5 comments

Good morning. Take a deep, cleansing breath, have a seat, and then read this.

Texas Governor Greg Abbott’s office knew of looming natural gas shortages on February 10, days before a deep freeze plunged much of the state into blackouts, according to documents obtained by E&E News and reviewed by Ars.

Abbott’s office first learned of the likely shortfall in a phone call from then-chair of the Public Utility Commission of Texas DeAnne Walker. In the days leading up to the power outages that began on February 15, Walker and the governor’s office spoke 31 more times.

Walker also spoke with regulators, politicians, and utilities dozens of times about the gas curtailments that threatened the state’s electrical grid. The PUC chair’s diary for the days before the outage shows her schedule dominated by concerns over gas curtailments and the impact they would have on electricity generation. Before and during the disaster, she was on more than 100 phone calls with various agencies and utilities regarding gas shortages.

After the blackouts began, Abbott appeared on Fox News to falsely assert that wind turbines were the driving force behind the outages.

Wind turbines were a factor, but only a small one. Wind in Texas doesn’t produce as much power in the winter, and regulators don’t typically rely on wind turbines to provide significant amounts of power. Instead, regulators anticipated that natural gas and coal power plants would meet demand.

In public, Bill Magness, then-CEO of ERCOT, the state’s electric grid regulator, didn’t seem concerned about the approaching weather. In a virtual meeting on February 9, Magness said, “As those of you in Texas know, we do have a cold front coming this way… Operations has issued an operating condition notice just to make sure everyone is up to speed with their winterization and we’re ready for the several days of pretty frigid temperatures to come our way.” During the two-and-a-half-hour public portion of the meeting, Magness devoted just 40 seconds to the unusual weather.

There’s more, so read the rest. I don’t know about you, but I’m beginning to think that Greg Abbott isn’t very good at this “being Governor” thing. Maybe we should consider electing someone else. Just a thought.

How many times will we fail to fix our power grid?

May 21st, 2021

by Charles Kuffner.

Comments are off for this post

By “we”, I mean our Legislature, and the PUC, and the Governor, and the Railroad Commission, and pretty much everyone else in charge of this state.

Ten years ago, Texas power plants froze during a fast-moving winter storm, causing rolling electricity blackouts across the state. Outraged Texas regulators and lawmakers, vowing to crack down, debated requiring energy companies to protect their equipment against extreme weather to ensure reliability.

But they didn’t.

Nine years ago, two state agencies that regulate utilities and the oil and gas industry warned that natural gas facilities that lost power during outages couldn’t feed electricity generation plants, creating a spiral of power loss. The agencies jointly recommended that lawmakers compel gas suppliers and power plants to fix the problem.

But they didn’t.

Eight years ago, economists warned that the state’s free-market grid left companies with little incentive to build enough plants to provide backup power during emergencies. With the support of then-Gov. Rick Perry, legislators and regulators considered increasing power rates to encourage the construction of more power plants, so that Texas, like other states, would have sufficient reserves.

But they didn’t.

In the wake of each power failure, or near-failure, over the past decade, Texas lawmakers have repeatedly stood at a fork in the road. In one direction lay government-mandated solutions that experts said would strengthen the state’s power system by making it less fragile under stress. The other direction continued Texas’ hands-off regulatory approach, leaving it to the for-profit energy companies to decide how to protect the power grid.

In each instance, lawmakers left the state’s lightly regulated energy markets alone, choosing cheap electricity over a more stable system. As a result, experts say, the power grid that Texans depend on to heat and cool their homes and run their businesses has become less and less reliable — and more susceptible to weather-related emergencies.

“Everyone has been in denial,” said Alison Silverstein, a consultant who works with the U.S. Department of Energy and formerly served as a senior adviser at the Federal Energy Regulatory Commission. “They treat each individual extreme event as a one-off, a high-impact, low-frequency event, which means, ‘I hope it doesn’t happen again.’”

With each passing year, the grid has steadily become less reliable. In 1989, Texas suffered a cold snap considered worse if not equal to the winter storm earlier this year yet managed to keep the grid functioning, with only a few hours of rotating outages.

By comparison, February’s Winter Storm Uri brought the Texas power grid to within five minutes of complete collapse, officials acknowledged. Millions of residents were left without power for days in subfreezing temperatures; nearly 200 died.

“Our system now is more vulnerable than it was 30 years ago,” said Woody Rickerson, vice president of grid planning and operations at the Electric Reliability Council of Texas. “With the generation mix we have now, the weather has the ability to affect wind and solar and (the gas supply). Those are things we can’t anticipate.”

It’s the first of a three-part series, and it’s a long read that will make you mad. The simple fact is that the system we have now works very well for some wealthy interests, and they are very good at defending their turf. Throw in an unwavering belief in the invisible hand of the free market and the general incentive towards doing nothing, and voila. Even the incremental steps forward have turned out to be meaningless:

As a result, the only legislation to come out of the 2011 storm was a minor bill from then-state Sen. Glenn Hegar, a Katy Republican, which required power companies to file weatherization plans with the PUC each year.

Two months after that bill was signed into law, the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation put out a report of more than 350 pages, urging Texas to enact stricter weatherization standards for power plants and natural gas operators.

And they did to a degree, with ERCOT putting out best practices, conducting annual workshops and inspecting plants every three to four years.

But there were two problems. First, despite FERC’s recommendation, the state Legislature never gave the PUC authority to penalize power plants that did not comply, making weatherization voluntary. While progress was made, some companies opted not to bring their plants up to code, said Rickerson, the ERCOT vice president.

“Ultimately those were financial decisions that had to be made,” he said. “How much is someone willing to invest in a power plant that’s 50 years old and going to retire in a few years?”

More significantly, the best practices ERCOT was sharing were designed for a cold snap like that seen in 2011. While cold, with temperatures in Dallas dropping as low as 14 degrees, it was nothing compared to the 1989 winter storm, when temperatures dropped to 7 degrees in Houston and minus-7 in Abilene, let alone 1899, when the state’s all-time low temperature of minus-23 degrees was set in the Panhandle town of Tulia.

So when temperatures dipped into the single digits for days on end this February, most Texas power plants were simply not prepared. Exterior control equipment and fuel lines froze, not to mention coal piles and wind turbine blades.

“One power plant under freezing for 200-plus hours. That’s not a thing, right?” said Chris Moser, executive vice president of operations for NRG Energy, of expectations going into the winter. “If you look at the math ERCOT did prior to the seasonal assessment, it looked like (there was plenty of power). But then you have 80 to 85 plants not showing up. It was a failure of imagination.”

As for Hegar’s legislation, it has proved even more toothless than it appeared at the time.

According to a recent report from ERCOT, the agency was never given authority to judge the weatherization plans but only to check that they were being implemented. And a requirement in Hegar’s bill that the PUC produce a one-time Weather Emergency Preparedness Report, which was quietly published in 2012 and found that many power companies were still doing a poor job implementing reforms, drew little attention from state officials.

“When you’re on the commission, you’re dealing with what’s immediately in front of you,” said Ken Anderson, a former public utility commissioner. “I’m not sure how much follow-up occurred.”

Seems like this is a pretty good campaign issue for next year, especially given what is being prioritized over making the grid more robust. I’m just saying.

The Big Freeze didn’t just screw Texas

May 12th, 2021

by Charles Kuffner.

5 comments

I had no idea.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

On a side note:

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

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

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

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

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

[…]

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

Here’s a pretty picture for you:

.
New analysis of the Texas power crisis calculates outages not with renewables *capacity* but with the actual estimated losses.

Pretty clear picture: Natural gas plants were by far the biggest share of outages in February.

Texas’ grid is extremely dependent on natural gas…

— Erin Douglas (@erinmdouglas23) 10:39 AM – 29 April 2021

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

The plight of the city-owned gas utilities

Apr 25th, 2021

by Charles Kuffner.

1 comment

It’s rough.

In the wake of last month’s winter disaster, which nearly crashed the state’s power grid and killed more than 100 people, state lawmakers convened hearings to probe how a weeklong winter storm had crippled the state. They have proposed laws to prevent similar catastrophes in the future.

Meanwhile, staggeringly high bills for the storm are coming due.

Most Texas residents receive their natural gas from large private utilities such as CenterPoint Energy, Atmos Energy and Texas Gas Service, which collectively incurred billions of dollars in extra costs buying natural gas at the height of the crisis. In public filings and statements, they said they would pay their suppliers with cash reserves and by borrowing money.

Yet about 80 Texas communities operate their own natural gas utilities, many artifacts from an earlier time that municipalities have held on to in an effort to keep rates low. Most are small cities that don’t have the same resources or bargaining power to cover the massive bills they owe to companies that delivered the gas. They have fewer customers among whom they can spread unexpected costs.

Attorney General Ken Paxton has vowed to investigate the storm’s sky-high gas prices. Unlike the state’s electricity market, where the Electric Reliability Council of Texas pays an independent market monitor to ensure companies follow the rules, the gas industry has no equivalent watchdog position.

Deals between municipalities and gas delivery companies are considered arrangements outside most regulation, said Sen. Lois Kolkhorst, R-Brenham, whose district includes several city gas utilities facing astronomical February bills. “These are signed contracts between a city and a gas supplier without state oversight,” she said, “which is why Texans must take a hard look at the issue of potential market manipulation and regulatory failures that have created this ridiculous ripoff.”

Officials in hard-hit cities have pledged not to pass on the bloated costs to customers all at once, saying they will break up any money owed into small increases billed to residents over as long as a decade or more. For now, however, the giant bills municipal utilities owe to distributors loom.

In Bellville, whose municipal gas utility serves a population of 4,097, February’s gas bill came to about $2 million — “a sixth of our entire annual budget,” said Mayor James Harrison. He said finding the money to pay for what was essentially one week’s worth of gas could set back the city’s development for years.

“We have plans to retop streets, take out a bond to build a new police station,” he said. “We’re not trying to get out of the bill. We’re just looking for answers right now, and we don’t have any.”

“We don’t have that kind of money,” added Bay City Mayor Robert Nelson. “Our customers don’t have it. How can we pay it?”

It’s not clear to me that this isn’t just how the market is set up to work, but there could be something there to investigate. I think Sen. Kolkhorst has identified the problem, so it’s mostly a matter of what if anything the Legislature wants to do about it. My guess is that this isn’t a high enough priority for them, but it is in their power. I wish the people of Bellville and Bay City and wherever else good luck in sorting this out.

ERCOT roundup

Apr 15th, 2021

by Charles Kuffner.

1 comment

Just a few stories of interest that I didn’t feel like putting in their own posts…

ERCOT will argue it is immune from lawsuits.

The Electric Reliability Council of Texas will argue that it has governmental immunity that protects it from the at least 35 lawsuits that have been filed against the operator after February’s disastrous winter storm which killed dozens of people and created millions of dollars of damages.

“ERCOT has and will continue to assert that it is entitled to sovereign immunity due to its organization and function as an arm of State government,” the organization wrote in a Wednesday court filing requesting to consolidate several of the lawsuits it’s battling.

Sovereign immunity grants protections for state agencies against lawsuits, with some exceptions. And this isn’t the first time ERCOT has made the argument — with some success — that it should be shielded from lawsuits due to its role acting upon the directives of state agencies and lawmakers.

In 2018, an appeals court in Dallas ruled that ERCOT, despite the fact that it is a private nonprofit, has sovereign immunity after Dallas-based utility Panda Power sued the operator over allegations of flawed energy projections.

That immunity was challenged at the Texas Supreme Court last month. However, the high court refused to rule on the issue, claiming it lacked jurisdiction because the original case that posed the question was dismissed — a hotly contested opinion with four of the nine justices dissenting.

See here for the previous update. I don’t know what practical effect this might have if ERCOT succeeds, but as a general principle I think this kind of legal immunity needs to be carefully limited. Maybe it’s appropriate here, but there needs to be a strong argument for it.

ERCOT: Blackout primarily caused by power plants freezing up:

The massive loss in power generation during the Texas blackout in February was caused primarily by power plants freezing up under historically cold conditions, according to a new report by the Electric Reliability Council of Texas Tuesday.

The state’s grid operator reported that on the morning of Feb. 16, the most severe moment of the blackout, 54 percent of the loss of power supply stemmed from weather-related issues at power plants, while 12 percent was due to a lack of fuel such as natural gas. Some 51,000 megawatts of generation — more than half of the system’s capacity — were offline at the height of the blackouts at 8 a.m. of Feb. 16, ERCOT reported.

The findings come as state officials are debating how to fix the state’s energy system to prevent a repeat of the power outages that left millions of Texans without power for days on end.

The report Tuesday offered a fairly limited perspective on what went wrong, failing to explain why specific types of generation were unable to operate during the winter storm or what happened. But it will add questions to how well prepared ERCOT and the state’s power plants were for cold weather, despite warnings from the Federal Energy Regulatory Commission to winterize following a less severe cold snap in 2011.

[…]

After weather-related problems, the second biggest loss of generation on Feb. 16 was caused by planned or unexpected outages prior to the cold snap that began sweeping Texas earlier in the week, accounting for 15 percent of lost power supply.

Another 14 percent of lost generation came from equipment failures unrelated to the weather. Only four percent of outages were due to transmission problems or a short drop in the frequency of the power grid that occurred early Monday morning.

I don’t know enough to say what this means in terms of figuring out the best path forward, but I sure hope that the Legislature has some people who know how to read a report like this available to explain it to them. We screwed this kind of response up last time. We have no excuse for screwing it up again.

Faulting ERCOT, insurer says it shouldn’t have to cover storm damages:

ERCOT’s insurance company is seeking a court ruling excusing it from defending Texas’ electric grid manager from lawsuits or covering damages stemming from the catastrophic power failure in February.

The Cincinnati Insurance Co. on Tuesday sought relief from the U.S. district court in Austin, arguing it does not have to defend the Electric Reliability Council of Texas because it does not view the power outages as an accident, defined by the insurer as a “fortuitous, unexpected, and unintended event.” As a result, the company said it has no obligation under its insurance policy to cover ERCOT, which faces a flood of lawsuits after the winter storm.

“The allegations in the Underlying Lawsuits allege ERCOT either knew, should have known, expected, and/or intended, that Winter Storm Uri would cause the same power outages which occurred as a result of previous storms in Texas, including storms in 1989 and 2011,” the insurer said in court documents. “The Underlying Lawsuits allege the power outages caused by Winter Storm Uri were a result of the exact same failures including failures of the same generators which failed in the previous winter storms, and therefore, the power outages were foreseeable, expected, and/or intended.”

[…]

ERCOT’s insurance policy with Cincinnati Insurance, effective until June 2022, states that the insurer “will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies. We will have the right and duty to defend the insured against any ‘suit’ seeking those damages.’

The policy, however, says Cincinnati Insurance has no duty to defend ERCOT in cases in which the insurance policy does not apply, and retains the discretion to investigate any “occurance” and settle any claim or lawsuit that results from it. The insurer defines “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.”

In case you were wondering why ERCOT really doesn’t want to be sued. Also, when was the last time that an insurance company paid a claim without fighting it?

An open Texas power grid would boost reliability and renewables, experts say.

Since the February power outages, Texas legislators have been busy weighing a host of improvements for the state’s grid, from weatherizing equipment to shaking up oversight to partnering with the billionaire investor Warren Buffett on new emergency-use power plants.

But hardly any of them have focused on what some believe could be a more widespread fix: plugging into other U.S. power supplies.

While Texas has long opposed opening its grid to avoid federal oversight, and ostensibly to keep prices low, energy experts say the calculus is not what it once was and that the benefits of connecting to the outside world are at least worth examining, especially as renewable energy is poised for a major expansion under the Biden administration.

Not only is the state missing out on a potential lifeline in future blackouts, they warn, it also risks passing up billions of dollars in new investments for clean, marketable electricity.

“We export every form of energy you could imagine except electrons,” Michael Webber, a professor at the University of Texas at Austin, told reporters recently. “This is ridiculous,” he said. “Let’s at least study the option.”

There are some good arguments for this, and some reasonable ones for maintaining the independence of the Texas grid. Just because our setup is dumb and expensive and unreliable doesn’t mean it has to be that way, after all. But this is all an academic point, because there’s a zero percent chance this happens. Go ahead and write a report, but don’t ever expect Greg Abbott or Dan Patrick to read it.

Winter storm death count now at 111

Mar 28th, 2021

by Charles Kuffner.

1 comment

A revision of the numbers. Expect this to happen at least once more.

At least 111 Texans died as a result of last month’s winter storm, according to updated numbers released Thursday by the state Department of State Health Services.

The newly revised number is nearly twice what the department had estimated last week, and will likely continue to grow. Some of Texas’ larger counties, such as Tarrant County, have yet to report any storm-related deaths.

The majority of people died from hypothermia, but health officials also attributed deaths to “motor vehicle accidents, carbon monoxide poisoning, medical equipment failure, exacerbation of chronic illness, lack of home oxygen, falls and fire.”

[…]

Harris County reported 31 storm-related deaths, the largest share in the state. Travis County followed with nine deaths.

Health officials will continue to update their preliminary findings weekly.

According to DSHS, the data is compiled from forms that certify deaths are related to a disaster, notification from death certifiers and analyses of death certificates from state epidemiologists.

See here for the background. As a reminder, there were 103 deaths attributed to Hurricane Harvey, so the February freeze event (I’m sorry, I’ve not adopted the new paradigm of naming winter storms, so I have not and probably will not again refer to this as “Winter Storm Uri”) has now surpassed that total. And will likely put some more distance between them when the next month’s data is available.

There has been a bit of legislative action on this front.

A bill that would overhaul Texas’ energy industry — including mandating weatherization for natural gas and power generators — was approved by a Texas Senate committee on Thursday.

The sweeping Senate Bill 3, sponsored by Republican state Sen. Charles Schwertner of Georgetown, includes a number of reforms that have been floating around the state Capitol since last month’s deadly winter storm left millions without electricity during freezing temperatures. While the Texas House earlier this month approved a package of similar, standalone bills, Thursday’s vote represents the first substantive action on the issue by the upper chamber.

“This is an important issue to get right for the people of Texas, for the future of Texas, for the economy of Texas,” Schwertner said.

Chief among the bill’s provisions is a requirement that all power generators, transmission lines, natural gas facilities and pipelines make upgrades for extreme weather conditions — a process known as weatherization. Many power generators and gas companies were ill-suited for the freezing temperatures in February, which led gas pipelines to freeze and power transmission to falter.

The measure would delegate rulemaking authority to the Texas Railroad Commission, which regulates the oil and gas industries, and the Texas Public Utility Commission, which regulates the electric and telecommunication industries. If a gas or energy company fails to comply with the weatherization rules, it would face a fine up to $1 million for each offense. The bill does not address funding to pay for the required upgrades.

A Texas House committee earlier this month passed a similar weatherization bill. But the requirements only apply to electric companies, not natural gas companies. In public testimony before the Legislature, Railroad Commission Chair Christi Craddick largely dodged talks of winterizing the natural gas supply chain.

There’s more, so read the rest. I don’t know enough to offer a general critique of these bills, but I would certainly argue that natural gas companies should have the same weatherization requirements. All of these bills are sure to change as they move from one chamber to the other, so we’ll need to see where they wind up.

The opening bid on power outage response

Mar 9th, 2021

by Charles Kuffner.

21 comments

Not bad, but there’s a long way to go and not a lot of detail just yet.

Texas House Speaker Dade Phelan on Monday announced seven priority bills responding to the winter weather crisis last month that left millions of Texans without power.

The proposals include overhauling the governance of the state’s electric grid operator, the Electric Reliability Council of Texas; mandating “weatherization” of power facilities and establishing a statewide disaster alert system. There is also legislation to ban variable-rate electricity pricing plans such as were offered by the company Griddy, which was recently effectively shut down in the state after customers were hit with bills in the thousands of dollars.

Phelan’s office called the proposals the “first phase” of the House’s proposed reforms in the wake of the winter storm. Not all the bills have been filed yet, so the specifics of some proposals have not yet been made public.

“We must take accountability, close critical gaps in our system, and prevent these breakdowns from ever happening again,” Phelan, a Republican, said in a statement.

[…]

House Bill 10, for instance, aims to reform ERCOT by restructuring its board. The legislation would replace the board’s “unaffiliated” members with members appointed by the governor, lieutenant governor and speaker. The bill would also mandate that all board members live in Texas. And it would add a new board member to “represent consumer interests,” according to Phelan’s office.

Some other ideas could prove challenging. House Bill 11, for instance, would order the Public Utilities Commission to require power generators to implement measures to avoid service outages during extreme weather events, including winter storms and heat waves. But retroactively equipping power plants and the state’s energy system to withstand cold temperatures is likely to be difficult and costly, energy experts have said. Building energy infrastructure that from the start is designed to perform in winter conditions is easier and cheaper, they have said.

Phelan’s office described another bill, House Bill 14, which hasn’t yet been filed, that would require the Railroad Commission of Texas to require pipeline operators to update their equipment to ensure reliability during extreme weather. It’s unclear how much either bill would cost the state or the power generators. Abbott has indicated in the past that he is interested in funding at least some of the weatherization.

These fall under the emergency items declared by Abbott, so they can be taken up ahead of other legislation. Once they’re written and filed, of course. I don’t have any immediate complaints – the general direction is good, and they seem to have hit the high points – but it’s very early in the process, and there will be plenty of opportunity for shenanigans and just plan resistance, so as always we will have to keep an eye on it. The pushback from the energy industry seems to be that the power outages themselves were the main driver of the natural gas shortage, not the wells and pipes freezing up. There’s probably something to that, but I’m sure you’ll understand if I decline to take their word for it. At least three of the bills will be carried by Democrats – Reps. Richard Raymond, Ana Hernandez, and Joe Deshotel. We’ll see what we get, and we should very much remember that a lot of this is about undoing or at least mitigating the effects of Republican deregulation, but this is a decent start.

The freeze effect on farmers

Feb 28th, 2021

by Charles Kuffner.

Comments are off for this post

As you might imagine, single digit temperatures are not good for agriculture.

Well before the sun finally broke through the cloudy and icy haze in Texas’ Rio Grande Valley last week, Dale Murden knew he was in for a bad spell.

After a few days of clearer skies and warmer weather let him assess the damage to his grapefruit orchard in Harlingen more closely, the South Texas citrus grower confirmed his fears.

“As time goes on, it’ll start to look worse,” said Murden, who is also the president of Hidalgo County-based Texas Citrus Mutual.

The winter storm that paralyzed Texas for days last week is going to have lasting effects on Murden and his fellow citrus growers in the Rio Grande Valley after the extended freeze killed millions of pounds of citrus. The storm also brought the state’s dairy industry, concentrated in the Panhandle, to a near standstill when widespread power outages halted processing.

Though it’s still too early to put a dollar amount on the losses, industry leaders are urging patience as they try to restock grocery shelves.

“As a grower, I would appeal to consumers to stick with us and, when we do get back on the shelf, please support us,” Murden said.

The 20-year annual average for grapefruit produced in the Rio Grande Valley is about 460 million pounds, Murden said. More than half of this year’s yield will be lost after the storm, and Valencia oranges, which are considered late-season harvests, will be nearly a total loss, he added. The damages will extend into next year because the freeze also damaged citrus blooms that would become fruit for the next season’s harvest.

“This will last well into 2021 and 2022,” he said. “The ability for Texas grapefruit growers to get it to your shelf right now is zero until we start growing a crop.”

The effects on the state’s dairy industry will be shorter, but the duration will depend on how quickly milk and other products can be processed, said Darren Turley, the executive director of the Texas Association of Dairymen. Most of Texas’ livestock survived the harsh weather, he said, but a loss of power meant processing and production was at a standstill and will need time to recover.

Turley said Panhandle livestock are used to severe winter weather, “But our natural gas was turned off and so much of our processing relies on that.”

It was reported during the freeze that a lot of milk was being dumped by dairy farmers (who still had to milk the cows because otherwise they stop producing) because there was no power for them to process it. Unlike the citrus growers, their supply should bounce back pretty quickly.

Republicans are determined to learn the wrong lessons from the blackouts

Feb 20th, 2021

by Charles Kuffner.

8 comments

It’s kind of amazing, and yet completely on brand.

With millions of Texans having lost power during the winter storms, key players in the Legislature say one of the most immediate reforms they will push for is recalibrating the state’s electricity grid to ensure more fossil fuels are in that mix and fewer renewables.

While all energy sources were disrupted during the historic freeze, Republican lawmakers who control the Legislature say renewables have been given all the attention over the years, yet proved to be unhelpful during the state’s crisis.

“It’s cool to be into wind and solar these days, but the problem is it leaves us frigid in the winter,” said State Sen. Paul Bettencourt, a Houston Republican who leads the GOP caucus in the Texas Senate.

Officials with the Electric Reliability Council of Texas said most of the generating plants that went offline this week were natural gas, coal or nuclear facilities. But still, Republicans have singled out wind and solar as targets over the objections of Democrats and renewable energy advocates.

Texas utilities ratepayers have funded more than $7 billion over the last eight years building transmission lines to take wind power from West Texas to the big cities. It’s made Texas the biggest wind producer in the nation.

But Bettencourt and other Republicans say advantages like federal subsidies for wind and solar have to be evened out.

“We need a baseload energy generation strategy in Texas that is reliable and not based upon renewables so strongly,” he said.

Jared Patterson, R-Frisco, this week reupped a bill he filed last session that would require ERCOT and the Public Utility Commission to write rules that would “eliminate or compensate for market distortion caused by certain federal tax credits.”

“It’s not just the frozen wind turbines; it’s the fact that they even exist that is creating the problem,” said Patterson, who works as an energy consultant. “Their existence, their heavily subsidized existence on our grid is creating a shortage of energy supply because no one else can compete against them.”

[…]

Blaming renewables is misguided and politically motivated, said Adrian Shelley, director of the Texas office of Public Citizen, a consumer advocacy group.

“There is no energy source that doesn’t receive subsidies,” Shelley said. “There have been energy tax credits for fossil fuel sources for a hundred years, so to target the renewable tax credit … it’s pretty disingenuous.”

[…]

But while there may be reforms to ERCOT, not many Republicans are talking about the prospect of ordering the state’s nearly 700 power plants to invest in weatherization and what that would cost.

ERCOT officials said earlier this week in a statewide press conference that while it was recommended power plants weatherize after winter storms in 2011 knocked out power, those were voluntary requests and not mandatory.

Jon Rosenthal, a Houston Democrat and senior mechanical engineer in the oil and gas industry, said he is working on legislation that would build in more reserve energy supply for Texas, such as by hooking up the state to the nationally interconnected system, or offering financial incentives for providers to increase back-up power.

Rosenthal would also like to see reliability standards introduced that require generators to weatherize their systems. He said he knows that adding more regulations will be an uphill battle in the Republican-majority Legislature but believes there is a “happy medium” that can be struck.

“While the common argument ‘we don’t want regulation so we can provide electricity as cheaply as possible’ does provide cheap energy a lot of the time, these disasters are horrendously expensive,” Rosenthal said. “I’ve heard insurance folks saying this could be the costliest ever natural disaster in Texas. So you make a little bit of an investment in your infrastructure to ensure that you don’t have these disastrous consequences.”

He added: “And it’s not just the cost of it. It’s the human suffering.”

How it is that they could have missed the voluminous reporting about how the same freeze we all just endured also caused problems for gas and coal plants since they both involve water and that water was frozen solid is an eternal mystery, but here we are. We’ve literally had thirty years’ of warnings about the need to weatherize our power plants and wind turbines, and this is the response we get from Paul Bettencourt and his cronies. It would cost money – I forget where I read this now, but I saw one back-of-the-envelope estimate of about $2 billion for the whole system – but that can be paid in part by the power generators and in part by the state, with cash from the Rainy Day Fund or a bond issuance if need be.

Doing that might require changing the financial incentives for the operators, and it might require shudder regulating the energy market – certainly, ERCOT or some other governing body will need enforcement power, because simply asking the operators nicely to invest in weatherizing hasn’t worked so far – and it even might require rejoining the national power grid, which has its own pros and cons but would come with federal enforcement of weatherization standards. There are many viable options. We don’t have to choose the stupid, head-in-the-frozen-tundra option that Bettencourt et al seem hellbent on doing.

One more thing, which I find equal parts amusing and puzzling: All this antagonism towards wind energy seems to overlook the fact that a large number of wind farms and turbines are in the Panhandle and West Texas, easily two of the most Republican parts of the state. Do these Republican legislators and other currently trashing wind energy – the Observer quotes a Facebook post by Sid Miller that says “We should never build another wind turbine in Texas”, for instance – not realize that they’re kicking sand on their own people? I don’t even know what to make of that, but I do know that part of the 2022 Democratic message needs to be targeted at those folks. Texas Monthly has more.

It could have been worse

Feb 19th, 2021

by Charles Kuffner.

7 comments

Hard to imagine, but this would qualify.

Texas’ power grid was “seconds and minutes” away from a catastrophic failure that could have left Texans in the dark for months, officials with the entity that operates the grid said Thursday.

As millions of customers throughout the state begin to have power restored after days of massive blackouts, officials with the Electric Reliability Council of Texas, or ERCOT, which operates the power grid that covers most of the state, said Texas was dangerously close to a worst-case scenario: uncontrolled blackouts across the state.

The quick decision that grid operators made in the early hours of Monday morning to begin what was intended to be rolling blackouts — but lasted days for millions of Texans — occurred because operators were seeing warning signs that massive amounts of energy supply was dropping off the grid.

As natural gas fired plants, utility scale wind power and coal plants tripped offline due to the extreme cold brought by the winter storm, the amount of power supplied to the grid to be distributed across the state fell rapidly. At the same time, demand was increasing as consumers and businesses turned up the heat and stayed inside to avoid the weather.

“It needed to be addressed immediately,” said Bill Magness, president of ERCOT. “It was seconds and minutes [from possible failure] given the amount of generation that was coming off the system.”

Grid operators had to act quickly to cut the amount of power distributed, Magness said, because if they had waited, “then what happens in that next minute might be that three more [power generation] units come offline, and then you’re sunk.”

Magness said on Wednesday that if operators had not acted in that moment, the state could have suffered blackouts that “could have occurred for months,” and left Texas in an “indeterminately long” crisis.

The worst case scenario: Demand for power overwhelms the supply of power generation available on the grid, causing equipment to catch fire, substations to blow and power lines to go down.

If the grid had gone totally offline, the physical damage to power infrastructure from overwhelming the grid can take months to repair, said Bernadette Johnson, senior vice president of power and renewables at Enverus, an oil and gas software and information company headquartered in Austin.

“As chaotic as it was, the whole grid could’ve been in blackout,” she said. “ERCOT is getting a lot of heat, but the fact that it wasn’t worse is because of those grid operators.”

Okay, you’ve convinced me, that would have been Bad. I can’t even begin to fathom what life in that scenario would look like. But look, what this means more than ever is we didn’t do a proper job of assessing and mitigating the risks that we faced. This was not an unforeseen event, nor was it a “five hundred year flood” situation, since we had extreme weather like this in 2011 and 1989, well within our institutional memory. What’s fascinating about all this is that the folks at ERCOT did a pretty good job estimating the demand that the grid would face. Where they completely missed the boat was on the supply side. Rice professor Daniel Cohan explains:

ERCOT didn’t do too badly predicting peak demand — 67 GW in its extreme scenario. We don’t know how high the actual peak would have been without these rolling blackouts, but perhaps around 5 GW higher, with some conservation by industrial consumers.

Scheduled maintenance played a role too, as plants tune up for summer peaks. Why so much of that maintenance continued amid week-ahead forecasts of an Arctic blast deserves a closer look.

But ERCOT’s biggest miss came in preparing for outages at what it thought were “firm” resources — gas, coal, and nuclear. Those outages topped 30 GW, more than double ERCOT’s worst-case scenario. Just one of those gigawatts came from a temporary outage at a nuclear unit. Most of the rest came from gas.

That doesn’t necessarily mean a lot of individual gas power plants broke down. Most outages came because delivery systems failed to supply gas to those plants at the consistent pressures that they need.

These failures highlight the unique vulnerabilities of relying so heavily on natural gas for power. Only gas electricity relies on a continuous supply of a fossil fuel delivered from hundreds of miles away. And that fuel is also needed for heat. So when an Arctic blast drives up demand and drives down supply of heat and electricity at the same time, power plants languish in line while homes and hospitals get the heating fuel they need.

That makes these blackouts an energy systems crisis, not just a power crisis. Every one of our power sources underperformed. Every one of them has unique vulnerabilities that are exacerbated by extreme events. None of them prepared adequately for extreme cold.

That was adapted from this Twitter thread, and you should read them both. There’s a lot that can and should be done to improve the system, and we need to think of it in systemic terms. Even Greg Abbott seems to think we need to think big:

.
The tension will now be: How will this be paid for? Who pays? #TxLege
Quote Tweet

— Scott Braddock (@scottbraddock) 3:38 PM – 18 February 2021

I mean, I don’t have any faith in anything Abbott wants to do, but at least he’s not talking about something that’s completely disconnected from, or opposite to, the problem. That’s better than what we’re used to. Maybe the Lege can take it from there.

Winter storm/blackout/boil water situation, Day 439

Feb 18th, 2021

by Charles Kuffner.

28 comments

I may be a bit off in my counting of the days, but it’s close enough. Between my house and my in-laws’ house, I have had power for maybe 14 hours total since Monday morning, with a bit more time for Internet thanks to a backup battery we have here that we can plug the cable modem and Eero router into. For obvious reasons, I’m not able to stay on top of the news as a result. The blackouts will continue for at least another day or so, the water needs to be boiled until further notice, we have a cracked water pipe but at least it’s under the house and not inside a wall and we may try to wrap some plumber’s tape on it while we wait in line to get it fixed, but all things considered we are fine. So many people are so much worse off, it’s heartbreaking and infuriating. If there’s anything you can do to help someone in need – friend, neighbor, complete stranger – please do so. We’re all in this together.

With that in mind, allow me to offer a hearty Fuck You to Rick Perry, for suggesting that all of the suffering and deprivation are a justifiable price that we should be willing to pay for not having a more regulated power generation system. I am truly at a loss for words here. May we all remember this in 2022, when we get to vote on who runs our state.

On the subject of ERCOT and the system we do have, let me key in on one part of this conversation with energy expert Joshua Rhodes about why things are the way they are here.

TM: When it comes to frozen wells and wind turbines, or other infrastructure that is physically affected by the cold, are there preventative measures that could have been taken, such as winterizing?

JR: There are plenty of oil and gas wells in Pennsylvania and North Dakota. It gets a lot colder there than it does here, even today. There are ways of producing gas. All of that infrastructure is site-specific. I would assume it’s more expensive. We could winterize wind turbines better but it would cost more money. We can winterize pipes on power plants, but it would cost more money. We have to decide, what level of risk are we willing to take and what are we willing to pay for?

TM: How could this have been prevented?

JR: Could we have built a grid that would have fared better during this time? Of course we could have. But we could also build a car that could survive every crash you could possibly throw at it, but it would be very expensive and not many people would probably be able to afford it. At some point we do a cost-benefit analysis of how much risk we are willing to take. We have never had weather like this thrown at us, so it’s not surprising to me that we don’t have infrastructure that can support it.

There are no snow plows out on the road. They’d be handy right now, of course, but we don’t use them very often. We don’t have that capability in the state generally because we don’t want to pay for it. We may decide now as a society that we do, but that’s a conversation we’re going to have to have with our collective self, if you will.

I thought Rhodes was way too deferential to the power generation industry overall, but this here is nearly as tone deaf as Perry’s idiocy. Yeah, sure, we can’t prepare for every possible contingency, but surely we can all recognize that a risk that leaves millions of people without power for multiple days in the midst of freezing temperatures is one that we ought to consider mitigating. As someone who works in cyberdefense at a large company, I can assure you we mitigate the hell out of much smaller risks than that. Actual rolling blackouts that leave a modest number of people without power for a couple of hours at a time is one thing. This was very much not that. Worse, it had already happened ten years ago and was studied at the time, yet nothing of any substance was done. This is a heads-must-roll situation. Anyone who doesn’t see it that way is part of the problem.

There’s a lot more out there but I only have so much battery life on the laptop. Stay safe, stay warm, and boil that water – if you have it – until told otherwise.

natural gas

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