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So we bail out the electricity providers

I guess I don’t know enough about our weird electricity market to suggest a viable alternative to this, but it sure doesn’t speak well of our system.

An approximately $2.5 billion plan to bail out Texas’ distressed electricity market from the financial crisis caused by Winter Storm Uri in February was approved by the Texas House Thursday.

The legislation would impose a fee — likely for the next decade or longer — on electricity companies, which would then get passed on to residential and business customers in their power bills. Lawmakers on Wednesday said they could not yet estimate how much it would impact Texans’ electricity bills.

House lawmakers sent House Bill 4492 to the Senate on Thursday after a 129-15 vote. A similar bill is advancing in the Senate.

Some of the state’s electricity providers and generators are financially underwater in the aftermath of the February power outages, which left millions without power and killed more than 100 people. Electricity companies had to buy whatever power was available at the maximum rate allowed by Texas regulations — $9,000 per megawatt hour — during the week of the storm (the average price for power in 2020 was $22 per megawatt hour). Natural gas fuel prices also spiked more than 700% during the storm.

Several companies are nearing default on their bills to the Electric Reliability Council of Texas, which manages the grid that covers most of the state and facilitates financial transactions in it.

Rural electric cooperatives were especially hard hit; Brazos Electric Power Cooperative, which supplies electricity to 1.5 million customers, filed for bankruptcy citing a $1.8 billion debt to ERCOT.

State Rep. Chris Paddie, R-Marshall, the bill’s author, said a second bailout bill will be necessary during the current legislative session for severely distressed electric cooperatives.

“This is a financial crisis, and it’s a big one,” James Schaefer, a senior managing director at Guggenheim Partners, an investment bank, told lawmakers at a House State Affairs Committee hearing in early April. He warned that more bankruptcies would cause higher costs to customers and hurt the state’s image in the eyes of investors.

“You’ve got to free the system,” Schaefer said. “It’s horrible that a bunch of folks have to pay, but it’s a system-wide failure. If you let a bunch of folks crash, it’s not a good look for your state.”

If approved by the Senate and Gov. Greg Abbott, a newly-created Texas Electric Securitization Corp. would use the money raised from the fees for bonds to help pay the companies’ debts, including costs for ancillary services, a financial product that helps ensure power is continuously generated. The aid would only be allowed for the debt that would otherwise be defaulted.

Hard to say how much this will increase the average monthly electric bill, but I’m sure someone will study that. Having a bunch of bankruptcies would be bad for a variety of reasons, so this is what we’re doing, but let’s take a moment to review the bidding on our deregulated electricity market. Massive statewide blackouts (and water failures) during the freeze because there was no requirement to weatherize the systems (even though we had experienced similar, though smaller scale, blackouts before, in recent memory), which led to a huge financial crisis in the industry that is now requiring a state bailout as well as a large state investment in weatherization, because otherwise that was never going to happen. All this, and we have higher consumer prices than other states. Is this a great system or what?

Meanwhile, in other ERCOT news:

During February’s deadly winter storm, Gov. Greg Abbott and many state lawmakers quickly criticized the Electric Reliability Council of Texas because several members of its large governing board reside outside Texas.

Many of the out-of-state board members are experts in the electricity field, but resigned following criticism of the agency’s oversight of the state’s main power grid during the storm that left millions of Texans without electricity for days in freezing temperatures.

State lawmakers are now trying to change the way ERCOT is governed by requiring members to live in Texas and giving more board seats to political appointees — changes that experts say may do little to improve the power grid.

One former board member who resigned after the storm, Peter Cramton, criticized legislation for politicizing the grid operator’s board.

“These people would be political types without electricity expertise,” he told The Texas Tribune.

The Texas House has already approved House Bill 10, which would remove independent outside voices on the ERCOT board and replace them with five political appointees. The governor would appoint three of those people, while the lieutenant governor and speaker of the House would each appoint one. None of the appointees would be required to be electricity experts. The only requirement is that appointees live in Texas.

Senate Bill 2, which has cleared the upper chamber, would give the governor five ERCOT board member appointments.

[…]

The political appointees replace what are now called “unaffiliated members,” who mostly served as outside expert voices. The other board members currently represent regions across the state that make up the ERCOT grid, as well as non-voting members such as the chair of the Public Utility Commission, which oversees ERCOT.

Some power grid experts have said in legislative testimony, at industry events and in interviews that they don’t see how giving more power to the political class — and making minor tweaks like requiring all board members reside in Texas — could improve the grid operator.

“From the consumer standpoint, we really depend on those unaffiliated directors to make decisions that are in customers’ interest and in the interest of the overall health of the ERCOT market,” Katie Coleman, who represents Texas Industrial Energy Consumers, said at a recent industry conference.

Seriously, WTF are we even doing here?

It was worse in Harris County during the freeze

Very interesting.

Harris County residents were far more likely to have lost electricity and water during February’s winter storm and blackout crisis than residents of other Texas counties, a survey by the University of Houston’s Hobby School of Public Affairs found.

The findings may help explain why Harris County residents account for a third of the almost 200 deaths so far attributed to the storm, while only accounting for 16 percent of the state’s population. Most froze to death in their homes or while exposed to the elements, succumbed to carbon monoxide poisoning or died when medical devices failed without electricity.

“During the week of the winter storm, Harris County residents were significantly more likely than other Texans to lose electrical power, lose internet service, lose access to drinkable water, be without running water, lose cell phone service, have food spoil, suffer economic damages, and experience difficulty finding a plumber,” the survey authors wrote.

Ninety-one percent of Harris County survey respondents said they lost power during the blackouts, compared to 64 percent of respondents from the other 212 counties on the state’s main power grid. Asked if they had lost water, 65 percent of Harris County residents said yes, compared to 44 percent of those in other counties. Thirty-eight percent of local respondents said they suffered burst pipes.

On average, Harris County respondents were without electricity for 49 total hours and 39 consecutive hours, confirming that the outages were not rotating as the grid operator, ERCOT, had hoped. CenterPoint Energy, the Houston area’s electricity distributor, said during the crisis it could not rotate blackouts because the drop in available power to distribute was so severe.

Perhaps unsurprisingly, 72 percent of Harris County respondents said they somewhat or strongly disagreed that the power outages were distributed in an equitable manner.

[…]

The survey also measured how Harris County respondents rated the performance of government officials and entities during the storm. President Joe Biden and County Judge Lina Hidalgo scored the highest, with more than 45 percent of respondents somewhat or strongly approving of their handling of the crisis.

Gov. Greg Abbott and state government as a whole were rated poorly, with about 21 percent somewhat or strongly approving of their performance. ERCOT polled the worst, with 78 percent of respondents somewhat or strongly disapproving of the power grid operator’s performance.

The survey found broad support among Harris County residents who identify as Republicans, Democrats and independents for a series of reforms. More than 70 percent of these respondents said they supported requiring the electric grid and natural gas pipelines to fully winterize and giving the Public Utilities Commission greater oversight over the electric grid.

Fifty-three percent of respondents, however, said they were unwilling to have higher utility bills to ensure the grid is better-prepared for severe weather.

The landing page for this poll is here. The data for Harris County is here and for the state as a whole is here. The poll was done via a webpanel, with a sample of 1500 adults in total, and an oversample of 513 adults in Harris County. Note that as before, the partisan makeup of the sample is more Democratic than it would be if we were talking about registered voters. In Harris County, it was 38% Democrats, 36% Independents, and 18% Republicans, and statewide it was 32% Dem, 30% Independent, and 25% Republican. I sent an inquiry about that, and was told that among those who reported voting in the 2020 election, Trump won by a 51-47 margin, not far off from the actual 52-46 spread. In other words, if there’s a Democratic skew it’s among the non-voters.

I say all that up front because there were approval ratings in the polls, at least for how the freeze was handled. For the statewide sample:

Governor Greg Abbott: Strong approve 15%, somewhat approve 13%, neutral 15%, somewhat disapprove 10%, strong disapprove 38%
Your County Judge: Strong approve 14%, somewhat approve 11%, neutral 26%, somewhat disapprove 7%, strong disapprove 16%
Your Mayor: Strong approve 14%, somewhat approve 14%, neutral 27%, somewhat disapprove 8%, strong disapprove 17%
President Joe Biden: Strong approve 21%, somewhat approve 11%, neutral 21%, somewhat disapprove 5%, strong disapprove 32%

And for Harris County:

Governor Greg Abbott: Strong approve 12%, somewhat approve 9%, neutral 17%, somewhat disapprove 9%, strong disapprove 47%
County Judge Lina Hidalgo: Strong approve 35%, somewhat approve 13%, neutral 19%, somewhat disapprove 6%, strong disapprove 18%
Your Mayor: Strong approve 27%, somewhat approve 19%, neutral 19%, somewhat disapprove 6%, strong disapprove 19%
President Joe Biden: Strong approve 36%, somewhat approve 13%, neutral 20%, somewhat disapprove 5%, strong disapprove 19%

Again, bear in mind the partisan breakdown of the sample. There’s a lot more to the polls, and a separate set of questions about lifting COVID-19 restrictions that I’ll write about separately, so go check it out.

Chron analysis puts freeze death total at 194

Sobering, to say the least.

The deaths of nearly 200 people are linked to February’s cold snap and blackouts, a Houston Chronicle analysis reveals, making the natural disaster one of the worst in Texas this past century.

The tally, which is nearly double the state’s official count, comes from an investigation of reports from medical examiners, justices of the peace and Department of State Health Services, as well as lawsuits and news stories.

The state count, which is preliminary, has yet to incorporate some deaths already flagged by medical examiners as storm-related.

The 194 deaths identified by the Chronicle so far include at least 100 cases of hypothermia that killed people in their homes or while exposed to the elements, at least 16 carbon monoxide poisonings of residents who used dangerous methods for heat and at least 22 Texans who died when medical devices failed without power or who were unable to seek live-saving care because of the weather.

Sixteen deaths were from other causes, such as fires or vehicle wrecks, while the remaining 40 were attributed by authorities to the storm without listing a specific cause.

“This is almost double the death toll from Hurricane Harvey,” said State Rep. Rafael Anchia, D-Dallas. “There was no live footage of flooded homes, or roofs being blown off, or tidal surges, but this was more deadly and devastating than anything we’ve experienced in modern state history.”

The toll is almost certain to grow in coming weeks as death investigators in the state’s most populous counties clear a backlog in cases from the cold snap. The Travis County medical examiner alone is investigating more than 80 deaths between Feb. 13 and Feb. 20.

The deaths come from 57 counties in all regions of the state but are disproportionately centered on the Houston area, which at times during the crisis accounted for nearly half of all power outages. Of the known ages, races and ethnicities of the victims, 74 percent were people of color. Half were at least 65. Six were children.

The previous count released by the state was 111, but as noted then and in this story that is sure to go up. There’s no central database for this kind of thing, only 14 counties have a medical examiner’s office, and not all county data is currently available. As with COVID deaths, there are likely some cases where one could argue whether the freeze was the actual cause of death or whether it was just proximate. The main point here is that the freeze was responsible for a lot of misery around the state and by any count more deaths than there were from Hurricane Harvey. It remains to be seen if the Legislature and the Public Utility Commission (which currently has no members) are taking adequate action to prevent this from ever happening again.

The infrastructure bill and the power grid

Of interest.

President Joe Biden’s $2 trillion infrastructure plan could help rebuild Texas highways and ports and push broadband into rural parts of the state, where up to 31 percent of residents do not have access to high-speed internet.

It could help Texas weatherize the grid in a way that wouldn’t stick consumers with the bill as well as guard the Gulf Coast against hurricanes and address racial disparities that have made Latino and Black communities particularly vulnerable to natural disasters.

The infrastructure pitch is the president’s latest attempt to offer up money for things Republican leaders in Texas have been looking for funds to cover, as well as some that state lawmakers have been reluctant to take on.

But the president’s latest proposal also comes with a heavy emphasis on clean energy that some Texas Republicans have framed as an attack on the state’s oil industry, and Biden is calling for corporate tax increases to foot the bill.

[…]

Though Biden outlined the package in Pittsburgh on Wednesday, the pitch may as well have been aimed at Texas.

“As we saw in Texas and elsewhere, our electrical power grids are vulnerable to storms, catastrophic failures and security lapses to tragic results,” Biden said, pledging to “put hundreds of thousands of people to work” rebuilding a “modern, resilient and fully clean grid” and capping hundreds of thousands of dry oil and gas wells, many in Texas.

[…]

The infrastructure bill could also help pick up the tab — if not cover completely — the cost of weatherizing Texas’ power grid, which state lawmakers are so far requiring the industry to cover. Consumer advocates have warned those costs would then be passed down to consumers.

So far the White House has not detailed specific projects, but the plan calls for $100 billion to be spent on energy projects, including upgrades to electrical grids. [Michael Webber, an energy resources professor at the University of Texas at Austin] said given that Texas accounts for about 8 percent of the U.S. population and 10 percent of the GDP, a proportionate slice of that $100 billion would cover the estimated $8 to $10 billion price of weatherizing the grid.

But the president’s push for green energy in the infrastructure package already has state leaders pushing back.

The Texas Legislature is working to counteract tax credits for clean energy Biden would extend as his proposal aims for 100 percent carbon-free electricity by 2035. The state Senate passed a bill this week adding fees on solar and wind electricity production in the state in hopes of boosting fossil fuels.

More far-reaching proposals for clean energy in the plan could have major implications for the Texas oil and gas industry. Republicans are calling it Biden’s latest attack on fossil fuels after moves to end the Keystone XL pipeline and pause drilling on federal lands.

As Biden is calling for pouring $174 billion to juice the electric vehicle market and another $213 billion to retrofit 2 million homes and businesses to increase energy efficiency, he is also proposing spending $16 billion plugging oil wells — an endeavor Webber said could be a multi-billion dollar industry in Texas offering plenty of jobs to oil workers worried about Biden’s clean energy bent.

“This is a multi-hundred million to multi-billion dollar economic opportunity,” he said. “If you’re looking to be angry, you could be angry about what this might do to oil and gas — but I would say actually it’s a pretty good opportunity.”

As a reminder, right now this is the Infrastructure Plan That Is Not Yet A Bill, though the House is now working on what it will look like as legislation. The Texas Senate has passed its bill to overhaul the electricity market, which has some good things in it as well as that dumb and petty attack on renewable energy, which last I checked was still big business in Texas. The fact that Biden’s plan includes ending tax subsidies to fossil fuel companies will I’m sure have heads exploding all over the state. I have to assume that federal funds to cover the cost of weatherizing the grid would be scooped up and used, though never acknowledged and certainly not voted for by Republicans.

It’s hard to know how any of this will play out, given that we don’t have a piece of legislation yet, and we very much have to take into account the whole filibuster obstacle in the Senate. I have read elsewhere that the legislative calendar is such that this would all need to be done by late summer, so to say the least it’s a race. As a reminder, if you want to know more about the plan, see Slate and the Trib.

Freeze-related lawsuit filed against CenterPoint

Of interest.

Several more Houston families of victims of the February freeze are among the latest to sue CenterPoint Energy for allowing vulnerable people to languish without power during what were supposed to be brief blackouts.

Travis Flowers, 66, and Qazi Momin, 83, relied on oxygen tanks to survive, according to separate lawsuits — both of which were filed Friday by lawyer Tony Buzbee.

In the case of Flowers, the power at the Army veteran’s Houston home went out Feb. 15 and his wife, Brenda Flowers, swapped out his powerless tank for a portable device. By then, the home was too cold for the backup tank to work, according to the lawsuit. Flowers’ oxygen levels dropped dangerously low and he died at a hospital.

Two days later, when the power went out at another residence, Momin’s caretaker found him breathing rapidly. His oxygen tank was without power, the suit states. She “tried to make him comfortable using pillows to support him” but hours later, he stopped breathing.

Her phone was dead “so she went to her car to charge it so that she could call for help.”

Details surrounding Flowers’ and Momin’s deaths could not be found in medical examiner records.

The wrongful death litigation, among several filed after the winter storm that knocked out power for millions of Texans, both accuse CenterPoint — a private utilities company — of negligence for cutting power to Flowers’ and Momin’s homes as the temperature lingered below freezing.

[…]

Although CenterPoint was acting on instructions from the Electric Reliability Council of Texas to lighten the power load, the regional energy company, Buzbee contends, was able to choose which circuits to sever power to and for how long. ERCOT, who is named in this case but not a defendant, manages most of Texas’ electrical grid through a deregulated market.

The lawsuit claims the energy company failed to disclose the possibility of a failing power grid or prepare Houstonians to keep warm or leave the area. The nine-page document points to a tweet that CenterPoint officials wrote the morning of Flowers’ death that states “controlled, rotating electric outages” would begin but that they would be temporary.

“At (the) same time that CenterPoint and others were telling the public that the blackouts were temporary and rolling, public officials were urging people to stay home and off the roads,” the suit reads.

Transparency and “balanced rotations of power” in Houston neighborhoods, Buzbee argues, could have saved their lives.

There have been other freeze-related lawsuits filed, against the now-bankrupt Griddy and against Entergy, with the latter also from the busy office of Tony Buzbee. There’s also litigation against ERCOT, though it remains an open question as to whether or not ERCOT can be sued in this fashion. I don’t have any particular insight about this action other than to say that however much you might think CenterPoint is at fault, the greater responsibility in my opinion lies with the Legislature and the state’s regulatory structure. None of that can really be sued (except maybe ERCOT), so here we are.

On a related note:

Last month’s disastrous and deadly winter storm impacted most Texans served by the state’s main power grid, with almost 70% of those people losing power in subfreezing temperatures and almost half experiencing a water outage, according to a new report from the University of Houston.

And although Texans were told to prepare for short-term, rolling power outages ahead of the storm, those who lost electricity ended up going an average of 42 hours without it, the survey found.

As the updated death toll from the storm reached 111 deaths last week, the severity of its full force has continued to come into focus. The damage the storm wrecked could make it the costliest disaster in Texas history.

That report is here. I figure we were without power for about 50 hours at our house – about half of Monday, all of Tuesday, and about half of Wednesday. Doesn’t have any direct bearing on the litigation around this, but it’s another reminder of just how bad this was, if for some reason we needed one.

Winter storm death count now at 111

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.

SCoTX punts on ERCOT lawsuit question

Wimpy.

The Texas Supreme Court punted Friday on a question dogging millions of Texans affected by last month’s catastrophic power failure: Can ERCOT, the state’s grid manager, be sued?

The state’s highest court ruled 5-4 that it won’t decide — at least not now — on closely-watched case between Dallas electricity generator Panda Power and the Electric Reliability Council of Texas. The $2.2 billion case filed by Panda Power in 2016 raised the question whether ERCOT is a governmental agency that has sovereign immunity protecting them from lawsuits. ERCOT, a private, nonprofit corporation overseen by the Texas Legislature and the Public Utility Commission, is the only grid manager in the country that has received such protection.

Five justices led by Justice Jeff Boyd said the Texas Constitution prohibits them from ruling on the case after the trial court issued a final judgment dismissing the case. Based on a finding of sovereign immunity by an appeals court, the Supreme Court narrowly ruled that the dismissal by the lower court made the case moot and that it no longer had the authority to rule in the case.

“Because the trial court’s interlocutory order merged into the final judgment and no longer exists, we cannot grant the relief the parties seek,” the majority opinion written by Boyd stated. “As a result, any decision we might render would constitute an impermissible advisory opinion, and these consolidated causes are moot.”

Four dissenting justices led by Chief Justice Nathan Hecht, argued they should rule on the case because the public has an interest whether ERCOT can be sued in the aftermath of last month’s storm. Several lawsuits have been filed against the state grid manager, including over the deaths of an 11-year-old boy and a 95-year-old man, who were both found dead in their freezing Houston-area homes.

“The answer to the immunity issue in this case has become perhaps more important to the public than even to the parties,” the minority opinion, written by Hecht stated. “The parties want to know. The public wants to know. The court refuses to answer.”

The ruling by the high court has widespread implications in the wake of last month’s deadly and devastating blackouts, which contributed to more than 50 deaths and billions of dollars of property damage.

David Coale, an appellate partner with Dallas-based law firm Lynn Pinker Hurst & Schwegmann, said the Supreme Court could still decide on ERCOT’s immunity as appeals from the Panda Power case come up through the legal system. In the meantime, ERCOT’s immunity — upheld by a Texas appeals court in 2018 — remains intact, but the state grid manage faces an onslaught of legal cases without any guidance from the Supreme Court.

“The court may have punted, but it didn’t walk away,” Coale said. “It acknowledged that another appeal involving the same parties is on its way up to them, and it can revisit these issues then.”

See here and here for some background. I guess I can understand the “let’s do this all in the correct order” idea, but as the story notes the question about whether ERCOT has sovereign immunity or not is very pertinent right now. Maybe if the ultimate decision is that ERCOT cannot be sued it would be nice to let all those folks who are now suing them know, so they won’t waste a bunch of time and money pursuing their cases. I’m not a lawyer, what do I know? You can find all the relevant opinions and concurrences and dissents here if you need a little light reading for the weekend.

UPDATE: Forgot to mention that Harris, Fort Bend, and Travis Counties submitted amicus briefs urging SCOTUS to find in favor of ERCOT not having sovereign immunity. This Bloomberg article, which is behind their paywall but which you might be able to see if you haven’t exceeded your monthly allowance, details those filings.

Our rinky-dink critical infrastructure

Good Lord.

On Valentine’s Day, the major utility that supplies electricity to West Texas readied for a severe winter storm. Hired contractors prepared to fix power lines, managers started up the storm emergency center, and operators reviewed the list of facilities that should — no matter what — keep power during an emergency: 35 of them on Oncor’s list were natural gas facilities that deliver fuel to power plants.

As Sunday turned to Monday, Allen Nye, the CEO of Oncor, one of the state’s largest transmission and delivery utilities, thought his team was ready.

But the situation rapidly deteriorated as the storm bore down on Texas. At 1:20 a.m., the Electric Reliability Council of Texas, which manages the state’s power grid, ordered the first cut of power to bring demand down to match an extremely low power supply as the frigid temperatures caused power plants to rapidly trip offline.

Oncor’s team, along with other utilities, began a plan to roll outages at 15- and 30-minute intervals. But just before 2 a.m., ERCOT ordered them to take even more power offline — then kept ordering more reductions. By late Monday morning, ERCOT had ordered 20,000 megawatts of power offline; Oncor’s share was 8,000 megawatts, or enough to power 1.6 million homes.

Rolling the outages “quickly became impossible,” Nye said. “We sat there praying that electrons showed up.”

With millions of Texans without power, Nye got an urgent request from DeAnn Walker, then chair of the Public Utility Commission: She needed Oncor to flip the switch back on to certain natural gas facilities that couldn’t deliver fuel to power plants without electricity. A PUC spokesperson said Walker was “ceaselessly” on the phone, calling Nye about dozens of natural gas facilities that weren’t on Oncor’s “critical” list.

That meant that Oncor, which delivers power to the Permian Basin — the state’s most productive oil and natural gas basin — had unwittingly shut off some of the state’s power supply when it followed orders to begin the outages.

The desperate scramble to power up natural gas facilities again exposed a major structural flaw in Texas’ electric grid: Oncor and other utilities didn’t have good lists of what they should consider critical infrastructure, including natural gas facilities — simply because natural gas companies failed to fill out a form or didn’t know the form existed, company executives, regulators and experts said.

[…]

“In my opinion, if we had kept the supply [of natural gas] on, we would’ve had minor disruptions,” James Cisarik, chairman of the Texas Energy Reliability Council, told legislators. “[Texas] has all the assets, we just have to make sure we evaluate every link in that chain to keep it going.”

The failures were years in the making: There is no requirement for natural gas and other companies that operate crucial parts of the grid to register as “critical.” And a trend toward electrifying key components of the state’s natural gas infrastructure in recent decades, plus the lack of a single agency to oversee all parts of the electric delivery system, created what Kenneth Medlock, a fellow in energy and resource economics at the Rice University’s Baker Institute, called a “single point of failure” — one that state regulators were blind to.

“That’s a failure of regulation,” said Medlock, who is also the senior director of the Center for Energy Studies at Rice. “That’s all it is. It’s relatively simple.”

That’s one way to put it. “Infuriating” and “inexcusable” also come to mind, along with a bunch of swear words. As someone once said, there’s a lot more to gain by avoiding stupid mistakes than there is by coming up with genius solutions. This is the sort of thing that the Legislature should be focused on. If this kind of simple, no cost fix is not implemented, you know who to blame. The Chron has more.

Griddy files for bankruptcy

Live by market disruption

Griddy Energy, a California-based retail power company, filed for bankruptcy on Monday citing financial woes brought on by the power crisis in February.

Griddy’s business model exposes consumers to the wholesale market, which in normal times could mean savings, but when the grid crashed many customers had exorbitantly high bills in the thousands.

The power company’s Chief Executive Officer Michael Fallquist said the bankruptcy plan would provide financial relief to it’s customers, and also took aim at The Electric Reliability Council of Texas, or ERCOT, the state’s grid manager.

“Prior to Winter Storm Uri, Griddy was a thriving business with more than 29,000 customers who saved more than $17 million dollars since 2017. The actions of ERCOT destroyed our business and caused financial harm to our customers,” Fallquist saod. “Our bankruptcy plan, if confirmed, provides relief for our former customers who were unable to pay their electricity bills resulting from the unprecedented prices.”

Two weeks ago, ERCOT barred Griddy from participating in the state’s wholesale power markets, effectively shutting down the company.

See here and here for some background. This doesn’t mean Griddy is going away, just that it’s working through some tough times. It also apparently means that may of their customers may be off the hook for the ridiculous prices they had been charged.

Griddy’s approximately 29,000 customers were charged $29 million for energy during the winter storm, according to court documents. The wholesale electricity retailer, which has recently been forced out of the market, charged a $9.99 monthly fee and, in turn, passed along wholesale prices to customers.

When wholesale energy bill prices skyrocketed during the storm as temperatures plunged below freezing, Griddy customers were subject to the same costs with no buffer. Some reported bills over $15,000. Most Texas customers were shielded from the rising prices because they pay a fixed rate for electricity, although they could see prices increase in the near future to offset the added costs incurred by the power companies.

Houston-based Griddy’s Chapter 11 filing outlines a plan to wipe out its former customers’ debt during the company’s liquidation if approved in bankruptcy court.

“Our bankruptcy plan, if confirmed, provides relief for our former customers who were unable to pay their electricity bills resulting from the unprecedented prices,” Griddy CEO Michael Fallquist said in a statement on its website. He emphasized Griddy did not profit from increased prices and only made money off of the fixed monthly membership fees.

However, thousands of dollars have already been automatically drained from customer’s bank accounts and charged to their credit cards.

Texas Attorney General Ken Paxton said in a statement that Griddy and his office are “engaged in ongoing good faith negotiations to attempt to address additional relief for those Griddy customers who have already paid their storm-related energy bills.”

Not perfect, but it’s a start. Here’s the longer version of the Chron story for more.

The state of the Public Utility Commission

News item #1:

While many Texans last week were worried about sky-high electric bills from February’s winter storms, the state’s sole utility commissioner was privately reassuring out-of-state investors who profited from the crisis that he was working to keep their windfall safe.

Texas Monthly has obtained a recording of a 48-minute call on March 9 in which Texas Public Utility Commission chairman Arthur D’Andrea discussed the fallout from the February power crisis with investors. During that call, which was hosted by Bank of America Securities and closed to the public and news media, D’Andrea took pains to ease investors’ concerns that electricity trades, transacted at the highest prices the market allows, might be reversed, potentially costing trading firms and publicly traded generating companies millions of dollars.

“I apologize for the uncertainty,” D’Andrea said, promising to put “the weight of the commission” behind efforts to keep billions of dollars from being returned to utilities that were forced—thanks to decisions by the PUC—to buy power at sky-high prices, even after the worst of the blackout had passed.

Billed as “Learning the Texas Two Step: A Chat with the PUCT,” the call originally was scheduled for early February but was postponed until after the winter storm. The conversation shows a coziness between a top Texas regulator and some of the biggest players in the electricity market at a time when the PUC’s oversight is under fire from lawmakers. At one point, during a discussion about whether natural gas, which also saw huge price spikes during the crisis, would be “repriced,” D’Andrea said no, adding that most legislators understand that gas is priced by global markets and is out of their purview. “But I’ll let you know if I hear anything crazy on it,” D’Andrea said.

You can click over and listen to the audio and read the explanations for the words that D’Andrea used if you want. In the meantime, here’s news item #2, from later that same day.

Public Utility Commission Chair Arthur D’Andrea, the only remaining member of the three-seat board that regulates Texas utilities, is resigning from his post, Gov. Greg Abbott said Tuesday night.

Abbott said in a statement that he asked for and accepted D’Andrea’s resignation and plans to name “a replacement in the coming days who will have the responsibility of charting a new and fresh course for the agency.” D’Andrea’s resignation will be effective immediately upon the appointment of a successor, according to a copy of D’Andrea’s resignation letter that was obtained by The Texas Tribune.

He is the latest in a long line of officials who have left the PUC or the Electric Reliability Council of Texas since last month’s deadly winter storm plunged large swaths of Texas into subfreezing temperatures and overwhelmed the state’s electricity infrastructure, causing massive power outages. At least 57 people died in Texas as a result of the storm — most of them from hypothermia — according to preliminary data the state health department released Monday.

The reason for D’Andrea’s resignation was not immediately clear late Tuesday.

I think we have a reasonable hypothesis about it – this article goes on to mention that Texas Monthly story about D’Andrea’s phone call. None of the members of the PUC – all of whom were appointed by Greg Abbott – remain. Heck of a job, there. Be more mad at the PUC. Kimberley Reeves has more.

Winter storm death count at 57

This is likely to rise as we get better data.

At least 57 people died in Texas as a result of last month’s winter storm, according to preliminary data the state health department released Monday.

The largest number of deaths — at least 25 — occured in Harris County, the Texas Department of State Health Services reported.

The deaths occurred in at least 25 counties between Feb. 11 and March 5, the state agency said. The majority of verified deaths were associated with hypothermia, but health officials said some were also caused by motor vehicle wrecks, “carbon monoxide poisoning, medical equipment failure, falls, and fire.”

The preliminary data is “subject to change” as state disaster epidemiologists gather additional information and additional deaths are verified, the agency said. The information will be updated weekly, it said.

For purposes of comparison, there were 103 deaths in Texas attributed to Hurricane Harvey, 68 to direct effects of the storm and 35 more in the aftereffects. The financial costs of the freeze were higher. Just keep all that in mind when you see Greg Abbott and Dan Patrick and others play the blame game.

Abbott vs Patrick on power outage blame game

This ought to be interesting.

The blame game over the state’s faulty electrical grid is creating a rare public rift between the two top Republicans in state government that could have a major financial impact on some utility companies and their customers.

First Lt. Gov. Dan Patrick on Friday blasted Gov. Greg Abbott’s newest appointee to oversee the state’s utility system for a lack of “competence and questionable integrity.” Hours later, Abbott released a late-night letter to the public, addressed to Patrick. In it, Abbott defended his appointee and pushed back against Patrick’s solution for inflated power bills due to the winter storms.

The divide comes as Abbott is scheduled to be in Houston on Monday for a press conference to talk about election integrity legislation he is supporting in the Texas Legislature.

For most of the last two years, Abbott and Patrick avoided such confrontations, instead trying to project unity on most issues such as the pandemic and legislative priorities like property tax reforms and changes in public school funding.

But that unity has eroded since the deadly winter storms that blasted Texas last month, leaving millions without power and broken water pipes despite a decade of warnings that the state’s power grid was vulnerable increasingly common winter storms.

At the core of their public dispute is how to deal with outrageous wholesale electricity bills that some utilities are facing. Patrick says sky-high emergency prices left in place too long by the Electric Reliability Council of Texas resulted in $4 billion to $5 billion in overcharges for utility companies. He says the error can be reversed retroactively by Abbott’s appointed members of the Public Utility Commission, which has authority over ERCOT.

But ERCOT leaders and Abbott say there is a difference of opinion of whether there was an error at all. ERCOT’s leader Bill Magness said the prices were kept intentionally high, to assure public safety by drawing more power to the grid to help Texans weather the freeze.

Abbott says the utilities commission cannot legally reverse the past charges anyhow, and if that is going to be done, it would have to be done by the Legislature.

[…]

Patrick did not like answers from Abbott or the governor’s new Public Utility Commission chair, Arthur D’Andrea, who has testified that he cannot reverse the wholesale energy prices retroactively.

During a Senate committee hearing on Thursday, Patrick did something he’s only done one other time during his two terms as the lieutenant governor: He personally attended the committee hearing and grilled D’Andrea directly himself.

“In light of the PUC chair’s refusal to take any corrective action, despite the fact that he has the authority and the evidence is clear, I am asking Gov. Abbott to intercede on this issue,” Patrick said in a press statement he sent out late Friday. “I am also asking Gov. Abbott to replace Mr. D’Andrea on the PUC when he fills the other two vacancies there. Mr. D’Andrea’s position requires both professional competence and honesty and he demonstrated little of either in the hearings yesterday.”

Patrick said D’Andrea does have the authority to fix pricing during “unusual circumstances.”

Less than two hours later on Friday night, Abbott shared with the media a letter to Patrick in which he points to his long legal history as a former Texas Supreme Court Justice and the Texas Attorney General before he became governor in 2014 to make the case that D’Andrea was correct.

“As a former Texas Supreme Court Justice and former Attorney General, I agree with the position of the PUC Chair about his inability to take the action you requested,” Abbott wrote in his letter. “You asked that I ‘intervene to ensure the right thing is done.’ The governor does not have independent authority to accomplish the goals you seek. The only entity that can authorize the solution you want is the Legislature itself. That is why I made this issue an emergency item for the Legislature to consider this session.”

See here for some background, and here for more detailed coverage of Dan Patrick versus the PUC dude. The tea leaf reading is rampant, with the spectacle of Patrick challenging Abbott in the primary for Governor as the uber-story. I think this is more an illustration of what kind of politician each of them is than anything else. Abbott is at heart a lawyer, the kind of lawyer who will comb the fine print looking for a justification for the thing he already wants to do, which in this case is make the blame for the freeze as well as the responsibility for fixing the underlying issues fall on someone else. Patrick, on the other hand, is a showman and self-promoter who has enough self-awareness to know that he came pretty close to losing in 2018 and it might be good for him to claim an accomplishment on something broadly popular while also beating up on someone more villainous than he is. (I refer to the PUC Chair here and not to Abbott, but if you took it the other way Patrick would not complain.) You have to admire his creativity on this.

Lt. Gov. Dan Patrick hastily convened a session of the Texas Senate on Monday as members suspended their own rules and took highly unusual steps to push through a bill that would force the state’s utility regulator to reverse billions of dollars in charges for wholesale electricity during last month’s winter storm.

Senate Bill 2142, sponsored by state Sen. Bryan Hughes, R-Mineola, had not even been filed when the day started Monday — and the full Senate hadn’t been scheduled to convene. But by 2 p.m., it had been read on the Senate floor, approved in a hastily convened committee meeting that featured no public comment and then approved by the full Senate on a 27-3 vote.

Thanks to that extraordinary pace, it became the first bill that either chamber of the Legislature had passed since convening Jan. 12. It will head now head to the House, where its fate is currently uncertain.

“The Senate has acted,” Patrick said after Monday’s vote. “We are asking the governor to join us. And I think if he will say he’ll sign this bill, it may help us get this bill through the House.”

[…]

The filing of SB 2142 came after Friday’s deadline for filing legislation during the 2021 legislative session. But the Senate found a way around that rule in one of its bolder procedural moves Monday. The chamber brought back up its motion to adjourn Thursday and withdrew it, essentially going back in time on the legislative calendar and allowing Hughes to file his legislation before the Friday deadline.

Dan Patrick: He literally traveled through time to lower your electric bills. The ads, they write themselves. Look, I don’t think this makes Patrick any less likely to run for re-election as he has said he will, but a little speculation – and a little marketing – never hurt anyone. In the end, this will probably be more heat that light. If only we could get our power generation plants to store it all up for the next winter freeze.

The opening bid on power outage response

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.

ERCOT’s overcharges

Oops.

The Electric Reliability Council of Texas made a $16 billion error in pricing during the week of the winter storm that caused power outages across the state, according to a filing by its market monitor.

Potomac Economics, the independent market monitor for the Public Utility Commission of Texas, which oversees ERCOT, wrote in a letter to the Public Utility Commission that ERCOT kept market prices for power too high for nearly two days after widespread outages ended late the night of Feb. 17. It should have reset the prices the following day.

That decision to keep prices high, the market monitor claimed, resulted in $16 billion in additional costs to Texas power companies. The news of the overcharging was first reported by Bloomberg.

Some of the providers that were charged during the high price period could pass the costs to customers, depending on the type of contract they have, according to Detlef Hallermann, director of the Reliant Energy Trade Center at Texas A&M University.

In Texas, wholesale power prices are determined by supply and demand: When demand is high, ERCOT allows prices to go up. During the storm, PUC directed the grid operator to set wholesale power prices at $9,000 per megawatt hour — the maximum price. Raising prices is intended to incentivize power generators in the state to add more power to the grid. Companies then buy power from the wholesale market to deliver to consumers, which they are contractually obligated to do.

Because ERCOT failed to bring prices back down on time, companies had to buy power in the market at inflated prices.

The error will likely result in higher levels of defaults, wrote Carrie Bivens, a vice president of Potomac Economics, the firm that monitors the grid operator. She said the PUC should direct ERCOT to remove the pricing interventions that occurred after outages ended, and allowing them to remain would result in “substantial and unjustified” economic harm.

At least $1.5 billion could be passed on to retail electric providers and their customers. Some retail providers have already begun to file for bankruptcy.

[…]

“The ERCOT market was not designed to deal with an emergency of this scale,” wrote Patrick Woodson, CEO of ATG Clean Energy Holdings, a retail power provider based in Austin, to the Public Utility Commission. The pricing failure, he wrote, “has pushed the entire market to the brink of collapse.”

Bivens wrote that while she recognizes that retroactively revising the prices is “not ideal,” correcting the error will reflect the accurate supply and demand for power during the period after the outages.

First and foremost, most if not all of that $16 billion in overcharges needs to be refunded to the customers and retail providers. This isn’t a matter of reading the fine print, it’s a matter of the market failing. No one should have to pay those extortionate rates, and no one should have their credit ratings dinged because they were charged those extortionate rates.

Second, the PUC cannot be allowed to authorize such rates again in the future. I don’t know if this was a process problem or a judgment problem, but either way the effect was extremely damaging. That needs to be a high priority.

But in some sense, these are just details. The big picture problem is that the system we have in place failed completely during the freeze week. The bright idea behind this deregulated, market-driven system of power delivery is that it’s supposed to provide incentives to power companies to ensure there’s a sufficient supply of power, while lowering prices for the customers. The latter has long been a massive failure, but we see now how the former failed as well. All it did was serve as incentive for the system to be gamed. We can tinker around the edges and maybe put in some guard rails, but the underlying problem won’t be solved.

Of course, the Republicans in charge aren’t interested in systemic reform, because they think everything was just fine outside of that one unfortunate week. The real first step in solving this problem is getting people into office that want to solve it. The Chron has more.

UPDATE: That’s not how you fix it.

Texas’ utility regulator had an opportunity Friday to eliminate some of the $16 billion that the state’s grid operator erroneously overcharged power companies during last month’s deadly winter storm — but the board of the Public Utility Commission chose not to do so.

Some Texas electricity customers could have benefited from a decision to readjust the electricity market prices for the week of the storm, according to PUC Chair Arthur D’Andrea and some independent analysts. But other customers could have been harmed by such a move, D’Andrea said.

“I totally get how it looks like you’re protecting consumers [by readjusting electric prices],” D’Andrea said Friday during a PUC meeting. “But I promise you you’re not.”

D’Andrea added that a retroactive decision would have winners and losers: “You don’t know who you’re hurting. And you think you’re protecting the consumer and it turns out you’re bankrupting [someone else].”

[…]

State Sen. Drew Springer, R-Muenster, was hoping for a different decision by the PUC on Friday.

“Keeping the market at an artificial $9,000 for 32 hrs cost $16B,” Springer tweeted, adding that the Potomac Economics report “says those hours should be repriced, I agree.”

You have the power to do something about that, Sen. Springer. What are you going to do?

PUC Chair resigns

The body count increases.

The chairwoman of the Public Utility Commission of Texas, the agency that regulates the state’s electric, telecommunication, and water and sewer utilities, resigned Monday, according to a resignation letter provided to the Texas Tribune.

The Gov. Greg Abbott-appointed commission came under public criticism in the aftermath of Texas’ power crisis that left millions of people in the dark for days and claimed the lives of dozens.

On Monday, Lt. Gov. Dan Patrick called for PUC chairwoman DeAnn Walker and Electric Reliability Council of Texas CEO Bill Magness to resign.

[…]

Lawmakers began to call on the commissioners to resign Thursday after hearing testimony from Walker, who took little responsibility for the crisis during the house and senate committee hearings on the power outages. Rep. Jared Patterson, R-Frisco, wrote on Twitter that he has “zero confidence” in her after the Thursday hearings and that she “must” resign.

Walker came under fire during questioning for not doing more to prevent the crisis from occurring. Lawmakers probed how much information she had on whether the state’s power system could withstand winter storms, and questioned why she didn’t raise concerns about the possibility of outages sooner.

Walker, during her testimony to lawmakers last week, largely deflected blame to ERCOT and Magness, who testified in front of state senators on Thursday before Walker did.

“You know, there’s a lot of things Bill said about our authority over them that I simply disagree that that’s how it’s actually playing out in real life,” Walker told lawmakers.

But lawmakers countered that she leads the regulatory agency with the oversight of the power sector: “When you say you don’t have authority,” said state Sen. John Whitmire, D-Houston, “I’ve got you down as a pretty powerful person.”

Walker said the commission has “not been given legal authority by the Legislature to require winter weatherization,” a primary concern after the power crisis was precipitated by power plants tripping offline. Many power generators are not built to withstand extreme cold weather temperatures in Texas.

Walker deflected blame to ERCOT, the entity her agency oversees, and added of winterization: “It costs a lot of money.”

In her resignation letter to Gov. Abbott, Walker said she was resigning because she believed it to be in the best interest of the state. She also pushed back on criticisms that she did not take responsibility for the outages.

“I testified last Thursday in the Senate and House and accepted my role in the situation,” Walker wrote.

She went on to call on others, including the Railroad Commission, ERCOT, the Legislature, gas companies, electric generators and other industry players to “come forward” to acknowledge how their actions contributed to the power crisis — all of them, she wrote, “had responsibility to foresee what could have happened and failed to take the necessary steps for the past 10 years to address issues that each of them could have addressed.”

See here for why we all needed more focus on the PUC and its all-Greg-Abbott-appointed board. I didn’t write about Walker’s testimony before the Senate, but the reaction was swift and unsurprising. I’m not going to defend De Ann Walker, but all this is a little precious given the warning the state got 10 years ago and the Legisnature’s steadfast refusal to take any action in response. It’s right for the Lege to call out ERCOT and the PUC and hold them accountable for their failures, but who’s going to do the same to the Lege and Greg Abbott and Dan Patrick and the Railroad Commission? That’s on us, and if we’re not still paying attention next year when we get the chance to exert that authority, we’ll let them get away with it again. The Chron has more.

Paxton sues Griddy

Bandwagon time.

Texas Attorney General Ken Paxton filed a lawsuit Monday against electricity retailer Griddy, claiming it misled customers using deceptive business practices after some customers reported bills costing tens of thousands of dollars.

These charges were incurred during Texas’ devastating winter storm that nearly shut down Texas’ electrical grid and sent energy demand skyrocketing. The lawsuit targets Griddy’s auto-billing system, which began drafting money out of customer’s accounts as the bills rolled in.

“Griddy misled Texans and signed them up for services which, in a time of crisis, resulted in individual Texans each losing thousands of dollars,” Paxton said in a statement. “As Texans struggled to survive this winter storm, Griddy made the suffering even worse as it debited outrageous amounts each day.”

Paxton noted this is the first lawsuit his office has filed against power companies after the widespread outages two weeks ago. A Houston-based law firm accused the company of price gouging and filed a separate class-action lawsuit last week.

[…]

Griddy customers paid a $10 monthly membership and in turn were passed wholesale power prices. These prices fluctuate but usually are cheaper than retail prices. However, unlike fixed-rate electricity plan users, Griddy customers are susceptible to market changes due to increased demand or reduced supply.

Paxton’s lawsuit claims the company understood the risk this posed to customers but misled them through its marketing.

Some customers have reported bills costing thousands of dollars, some surpassing $15,000. The retailer places the blame for the exorbitant prices on Texas’ Public Utility Commission, saying they were due to the commission jacking up wholesale prices.

See here for more on the previous lawsuit. I think that actin has some merit, but Paxton jumping in at this point has definite Claude Rains being shocked to discover gambling at the casino vibes to it. I mean, it’s not as if that risk hasn’t been there for customers since Griddy’s inception. It’s well within the power of the AG to sue over false or misleading advertising even before any actual harm is inflicted. This is what I meant when I said that the real problem here was that the system worked as designed.

Also, too: How do you think the cross-examination will go after Griddy’s lawyers call Dan Patrick to the stand to testify about his assertion that people should have read the fine print in their contracts?

Not sure what effect this will have on the proceedings, but we technically don’t have Griddy to kick around any more.

The state’s grid manager effectively shut Griddy down after the retail power company failed to make a required payment.

Griddy, which offers customers access to wholesale prices, gained notoriety for billing customers in the thousands of dollars when wholesale prices skyrocketed during the recent weather-driven power crisis. The Electric Reliability Council of Texas, or ERCOT, barred the company, headquartered in California, from participating in the state’s power markets.

Griddy said Monday that it asked the Electric Reliability Council of Texas, or ERCOT, for emergency help on Feb. 16 after the Public Utility Commission mandated that wholesale prices rise to the state maximum of $9,000 per kilowatt hour, where they stayed for days.

That cost, which passed through to Griddy customers, is equivalent to $9 per kilowatt hour on residential bills, compared to a typical 9 cents to 10 cents per kilowatt hour in fixed retail plans.

Griddy said ERCOT did respond to its plea for help. ERCOT “ decided to take this action against only one company that represents a tiny fraction of the market,” Griddy said.

A spokeswoman for ERCOT said the grid manager did work with Griddy, but could not discuss details because of confidentiality rules.

What do you suppose are the odds that Griddy will file its own lawsuit against ERCOT?

Who watches the utility overseers?

Apparently, nobody. At least, not anymore.

Late last year, as winter approached and power companies prepared for cold weather, Gov. Greg Abbott’s hand-picked utility regulators decided they no longer wanted to work with a nonprofit organization they had hired to monitor and help Texas enforce the state’s electric reliability standards.

The multiyear contract between the Public Utility Commission and the obscure monitoring organization, the Texas Reliability Entity, was trashed. Over the next months, right up until the crippling storm that plunged millions of Texans into the dark and cold, the state agency overseeing the power industry operated without an independent monitor to make sure energy companies followed state protocols, which include weatherization guidelines.

The Public Utility Commission’s decision in November to end its contract with the Texas Reliability Entity didn’t cause the historic grid failures that this week transformed Texas into an undeveloped country, leaving large swaths of the state without power or water as temperatures dropped and stayed below freezing. A PUC spokesman said the agency still had ample protections to ensure energy companies followed state rules and guidelines.

On Thursday, Abbott called for a state law requiring power plants to be better weatherized. Yet over the past quarter-century, state leaders have refused to require the companies to prepare for severe weather, even as once-in-a-lifetime storms have arrived with increasing frequency.

Critics say the utility commission’s move to strip away a regulatory layer, especially with potentially severe weather approaching, was just the latest example of the consistently light touch Texas politicians have used to oversee the complex industry that generates and distributes power.

“It’s astonishing to me that the PUC would get rid of the independent reliability entity with no plan to replace it,” said state Rep. Rafael Anchía, D-Dallas, who sits on the Texas House Energy Resources Committee. “No staff, no oversight on reliability.”

Anchía said he would demand answers from PUC brass on the independent monitor function next week when House members will hold a hearing to investigate the factors that led to the Texas blackout.

I will admit, I had never heard of the Texas Reliability Entity before reading this story. There’s a lot of nuance in this story – it’s not clear that the Texas RE was doing an adequate job, but it’s also not clear that the mandate they had amounted to much – so read the whole thing. The main takeaway for me is that the state as a whole has basically taken the reliability of the power grid for granted, partly because of the belief that we don’t have sufficiently bad weather (non-hurricane division) to worry about, partly because we believe in the exceptionalism of our lightly-regulated system, and partly because I think we’ve just never thought about it. We’re thinking about it now, and I’d say we need a top-to-bottom review of what we want out of the power grid, what responsibilities and enforcement powers the regulators will have, and how often we inspect and audit these things and report on them to the public. We should have learned all these lessons in 2011 but we didn’t, and we really have no excuses if we don’t learn them now.

We need more focus on the Public Utility Commission

Let’s start with this tweet:

Now keep that in mind when you read this.

In January 2014, power plants owned by Texas’ largest electricity producer buckled under frigid temperatures. Its generators failed more than a dozen times in 12 hours, helping to bring the state’s electric grid to the brink of collapse.

The incident was the second in three years for North Texas-based Luminant, whose equipment malfunctions during a more severe storm in 2011 resulted in a $750,000 fine from state energy regulators for failing to deliver promised power to the grid.

In the earlier cold snap, the grid was pushed to the limit and rolling blackouts swept the state, spurring an angry Legislature to order a study of what went wrong.

Experts hired by the Texas Public Utility Commission, which oversees the state’s electric and water utilities, concluded that power-generating companies like Luminant had failed to understand the “critical failure points” that could cause equipment to stop working in cold weather.

In May 2014, the PUC sought changes that would require energy companies to identify and address all potential failure points, including any effects of “weather design limits.”

Luminant argued against the proposal.

In comments to the commission, the company said the requirement was unnecessary and “may or may not identify the ‘weak links’ in protections against extreme temperatures.”

“Each weather event [is] dynamic,” company representatives told regulators. “Any engineering analysis that attempted to identify a specific weather design limit would be rendered meaningless.”

By the end of the process, the PUC agreed to soften the proposed changes. Instead of identifying all possible failure points in their equipment, power companies would need only to address any that were previously known.

The change, which experts say has left Texas power plants more susceptible to the kind of extreme and deadly weather events that bore down on the state last week, is one in a series of cascading failures to shield the state’s electric grid from winter storms, ProPublica and The Texas Tribune found.

I get that everyone is mad at ERCOT, and I’ve certainly tossed that name around quite a bit myself. But the real power is in the PUC, and the PUC is appointed by the Governor. That’s where the buck stops, and as this story demonstrates, they have a lot to answer for.

This is a long story, which goes deep into the failures by the PUC to force power companies to do anything as well as the failure of the Legislature to take any meaningful action, and I want to encourage you to read the whole thing. If there’s one bit of good news in all this, it’s that this massive screwup happened at the start of the legislative session, so not only is it all fresh in everyone’s mind, there’s also the time to do something about it if we want to make it a priority and we don’t get buried under self-misinformation. Dan Patrick does have “ERCOT Reform” and “Power Grid Stability” high on his priority list, one spot ahead of the extremely pressing matter of sports teams not playing the national anthem before games (which you just know he would have had higher had it not been for the blackouts), but note that he’s focusing on ERCOT and not the PUC. Note also his item about preventing cities and counties from hiring lobbyists, and then read this:

Experts and consumer advocates say the challenge to the 2014 proposal by Luminant and other companies, which hasn’t been previously reported, is an example of the industry’s outsize influence over the regulatory bodies that oversee them.

“Too often, power companies get exactly what they want out of the PUC,” said Tim Morstad, associate director of AARP Texas. “Even well-intentioned PUC staff are outgunned by armies of power company lawyers and their experts. The sad truth is that if power companies object to something, in this case simply providing information about the durability of certain equipment, they are extremely likely to get what they want.”

Luminant representatives declined to answer questions about the company’s opposition to the weatherization proposal. PUC officials also declined to comment.

Michael Webber, an energy expert and mechanical engineering professor at the University of Texas at Austin, said the original proposal could have helped in identifying trouble spots within the state’s power plants.

“Good engineering requires detailed understanding of the performance limits of each individual component that goes into a system,” Webber said. “Even if 99.9% of the equipment is properly rated for the operational temperatures, that one part out of 1,000 can bring the whole thing down.”

Emphasis mine. You can be sure that the Capitol will be swarming with energy company lobbyists for the rest of the session. But then, Dan Patrick is “not in the business of trying to tell everyone what to do”, so don’t be surprised when he fails to deliver any tangible results.

Suing Griddy

This is going to be interesting.

A Chambers County resident filed a class-action lawsuit against electricity retailer Griddy on Monday, accusing the provider of price gouging customers during last week’s freeze. She is seeking $1 billion in relief for affected customers.

Attorneys for Lisa Khoury said in the lawsuit that her bill spiked to $9,340 the week of the storm, compared to her average monthly bills that range from $200 to $250. Griddy drafted payments from Khoury’s bank account several times, according to the lawsuit, pulling $1,200 before she blocked further charges from her bank. She still owes thousands.

Griddy passes wholesale electricity rates directly to customers, who in turn pay the company $10 a month. This differs from fixed-rate electricity plans which offer a consistent rate regardless of market conditions.

But because of a price hike fueled by a shortage of supply and skyrocketing demand, some customers were faced with bills charging tens of thousands of dollars. While electricity bills are likely to rise across the board, Texans on variable rate plans faced immediate and alarmingly high prices.

Texas’ Public Utility Commission, appointed by Abbott, raised the wholesale market price of electricity to $9 per kilo-watt hour — a 7,400% increase over the average 12 cents per kilo-watt hour — in response to rising demand. The hope was power generators would be enticed to produce more electricity.

“Energy prices should reflect scarcity of the supply,” the order stated.

Representatives for Griddy could not immediately be reached for comment. The electricity retailer addressed concerns of price gouging on its website and firmly placed the blame on the Public Utility Commission. The company states that it did not profit from raised prices.

A quick perusal of Griddy’s Twitter shows that they are blaming the PUC, and that they did suggest alternate electricity providers for their customers to switch to during freeze days; there are several news stories, including this one that ran in the Chron, about that as well.

This is one of those situations where the system is working exactly as designed – here are a couple of stories that explain the mechanics of this. I guess the courts could rule that what the PUC did violated the state’s laws on price gouging, but that seems like a stretch to me. I Am Not A Lawyer, so if you know better than me, please speak up.

More likely, there will be some kind of legislative solution to this. This Trib story goes into that option.

Gov. Greg Abbott and Texas lawmakers are promising relief for Texans hit with massive electric bills after a winter storm bludgeoned the state’s power grid, leaving millions of residents freezing without electricity.

But how they’ll accomplish that remains unclear. The state’s deregulated electricity market not only allows for staggering price spikes, but effectively compels them for some customers.

While many Texans are on “fixed rate” electricity plans that insulate them from market swings, others pay rates tied to the spot price of wholesale electricity, which skyrocketed during the storm.

As the bad weather bore down, it froze natural gas production and wind turbines, choking off the supply of electricity as demand skyrocketed. In response, the Public Utility Commission, appointed by Abbott, let the wholesale market price of electricity rise to $9 per kilo-watt hour, a 7,400% increase over the average 12 cents per kilo-watt hour.

The rate hike was supposed to entice power generators to get more juice into the grid, but the astounding costs were also passed directly on to some customers, who were suddenly being billed more for electricity each day than they normally pay in a month.

[…]

Kaiba White, an energy policy specialist with consumer advocacy group Public Citizen, said the costs would be passed on to customers one way or another.

“If they [the electric provider] don’t have a mechanism that allows them to do that in the immediate — like on the next bill or the next several bills — it’ll end up getting rolled into the overall cost of service,” she said. “It’s just a matter of whether it’s going to get passed on in an immediate way, in a shocking way … or spread out over time.”

Tim Morstad, associate state director with the Texas AARP, said “prices are going to rise” but with a delay for those not on variable rate plans.

“Forgive me for stepping back to say — this system is truly designed to have high prices and huge fluctuations. And putting consumers through that by design is a bad process. It’s setting people up for pain,” he said.

Texas has an unusually deregulated electricity market that’s touted for offering customers the ability to pick from hundreds of plans offered by dozens of electric providers. Parts of the state are carved out, including cities like Austin, that get energy from a municipally owned utility, or people served by cooperatives. Those too could see cost increases down the line.

Lawmakers and Abbott have pledged to protect consumers from the big bills, and excoriated the Electric Reliability Council of Texas for the outages last week. The reliability council, which operates the power grid that covers most of the state, is overseen by a Public Utility Commission.

Abbott’s office did not respond to a question about what options were on the table.

Lawmakers have demanded that the utility commission roll back its decision to allow the huge rate increases, or suggested cobbling together some package of emergency waivers or relief money to buffer Texans’ from the high bills.

“We cannot allow someone to exploit a market when they were the ones responsible for the dire consequences in the first place,” said state Rep. Brooks Landgraf, R-Odessa.

I have no idea what Abbott will suggest. He’s nobody’s picture of a creative thinker, and “solving problems” is not in his skill set. I’m hardly an expert either, but it seems to me that the first order of business is to prevent people from getting multi-thousand-dollar electric bills, and the simplest way to do that is probably just to order everyone’s bill capped at some value that relates to their usual experience, and have the state pick up the difference since the providers do in fact have the legal right to charge these amounts. That’s the easy part. The much harder question, at least for the leadership we are stuck with, is what to do about it for the future. That either involves some form of re-regulation that puts limits on how “free” the electricity market is, or ignoring it and hoping you survive electorally. I know what I’d do, but I’m not a Republican. Good luck with that.

One more thing, as long as we are talking about freeze/blackout-related lawsuits:

The family of an 11-year-old boy who died last week in Conroe during power outages while Texas endured a freezing winter storm is suing Entergy Texas and operator of the state’s power grid for a total of $100 million.

In the lawsuit filed Saturday, the family said Cristian Pineda died of hypothermia after the temperature in his house plunged due to the forced blackouts. Pineda’s family of five shared a single room for warmth, and Cristian shared a bed with his younger brother, the lawsuit states.

His family found Cristian unresponsive in the morning. The Houston Chronicle first reported news of the lawsuit.

The family is suing the Electric Reliability Council of Texas, which operates the decentralized electrical grid system. The Texas grid is not governed by federal regulations.

As the story notes, our old buddy Tony Buzbee is filing this lawsuit, along with at least seven others, against ERCOT. Whether or not he can do that is an open question.

ERCOT has sovereign immunity, a well-established legal principle that protects governmental agencies from lawsuits. ERCOT, a private nonprofit corporation overseen by the Texas Legislature and the Public Utility Commission, is the only grid manager in the country with such protections.

A pending decision by the Texas Supreme Court, however, could change that. Justices on the state’s highest court are expected to rule this year on a case between Dallas utility Panda Power and ERCOT that could strip the Texas grid operator of its sovereign immunity, leaving it open to lawsuits that ERCOT has said could cripple the agency.

The ruling by the high court will have widespread implications in the wake of last week’s blackouts. It would not only determine whether Texans can use the legal system to hold ERCOT accountable for power outages that led to more than 48 deaths and billions of dollars of property damage, but also the future of ERCOT and the state’s power markets if the court opens the door to the likely flood of lawsuits.

[…]

“The political rhetoric around ERCOT and the weather emergency has embraced transparency and accountability,” Rottinghaus said. “A ruling that holds ERCOT immune from such lawsuits may run against that. It could be a political liability.”

Panda Power filed suit in 2016 against ERCOT, alleging the grid operator issued “seriously flawed or rigged” energy demand projections that prompted the Dallas power company to invest $2.2 billion to build three power plants early last decade. The plants ended up losing billions of dollars, with one forced into bankruptcy.

ERCOT’s reports calling for more power generators came in the aftermath of a major ice storm in February 2011, which crippled Texas power plants and forced rolling blackouts across the state.

Panda Power’s case was halted in 2018 when an appeals court in Dallas asserted ERCOT was protected from lawsuits by sovereign immunity. The Texas Supreme Court in June 2020 said it would review the appellate court decision, heard the case in September 2020 and is expected to render a decision before it recesses in June.

We’ll see about that. There’s definitely some pressure, on the courts and on the Lege and on Greg Abbott, to Do Something about all this – and again, I remind you, that the “all this” in question is what was supposed to happen based on existing laws. How long that pressure lasts, and what happens if there are no legal or legislative outlets for it, that’s the big political question.

UPDATE: Multiple ERCOT board members have resigned. All are folks who did not live in Texas, which yes is one of the weirder things about ERCOT. Not directly related to this story, but this is as good a place as any to note it.

Republicans are determined to learn the wrong lessons from the blackouts

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.

Some good local environmental news

Good news for Houston, in particular Sunnyside.

The old landfill in Sunnyside sat closed for 50 years, an enduring reminder of the city’s choice to dump and burn its trash in the historically Black community.

On Wednesday, Houston City Council members took a step toward re-purposing it, voting unanimously to lease the neglected site for $1 a year to a group intending to build a solar farm on it.

Research has shown that solar farms depress home values. But as Mayor Sylvester Turner saw it, the plan offered a chance to take property dragging down a community and re-imagine it for the better.

“A plus for Sunnyside becomes a plus for the city as a whole,” he said.

Charles Cave, a nearby resident involved in shepherding the project, told council members on Tuesday that addressing the property that had become a dangerous eyesore was “well overdue.”

The council will vote later on a specific development plan, but its decision Wednesday marked an important step for those involved, who say they want to see the land change from blight to a showpiece.

The agreement allows companies behind the effort to seek approval from the state environmental agency and power grid managers to build on and sell energy from the 240-acre spot. It covers at least 20 years of operation, with construction slated for 2022.

I’ll have to go read that story about solar farms not being great for home values, but it’s hard to imagine one being worse for them than a former landfill. Good for the city, and good for Sunnyside.

Also good:

When Adrian Garcia was Harris County sheriff, he wanted to rethink what kind of energy the jail used. Could the building have solar panels? Backup batteries? County leaders then didn’t embrace the idea, he said.

Now a county commissioner, Garcia doesn’t want to miss his chance to help push the county toward directly buying renewable energy such as wind and solar, a potentially significant shift in the so-called energy capital of the world.

“For me,” the first-term Democrat said, “it just makes sense.”

His fellow commissioners unanimously agreed to reconsider how they will purchase power starting in 2023. What direction they’ll take is up for debate. A county working group is looking at options, and commissioners decided to seek a consultant’s help.

[…]

County leaders don’t know yet exactly how they will change their power contract beyond RECs, but they want to be trendsetters, Commissioner Rodney Ellis said. He expects that the commissioners court will come up with a strategy for buying renewables, especially with interest growing at the federal level.

Still, Ellis considers the opportunity part of what needs to be a larger approach. He has proposed the county look into drawing up a climate action plan, as the city of Houston has done, rather than pursue initiatives one-by-one.

“I think we have a responsibility in the energy capital of the world to be proactive,” he said. “Those problems with climate change don’t just vanish; they don’t disappear on their own.”

Their purchasing power matters: Big buyers such as local governments, school districts and retail store chains helped the renewable energy industry grow, said Pat Wood III, CEO of Hunt Energy Network and former chairman of the Public Utility Commission of Texas.

“It’s a vote of confidence for a new industry in Texas that’s homegrown,” Wood said. “To me, I’m a fan. It’s just as Texan as oil and gas.”

RECs are “renewable energy certificates”. As the story notes, the city of Houston already has a solar energy deal, so Harris County is just catching up. Better late than never.

The power to pay more for electricity

Deregulation really does create jobs.

When Texas deregulated electricity markets 16 years ago, the Public Utility Commission created the website Power to Choose to help consumers through the power buying experience. But what was promoted as an easy, free way for Texans to pick electricity providers has turned into a such a complex and confounding experience that it is spawning a cottage industry to help consumers navigate the scores of companies and hundreds of plans available.

At least five companies in Texas are providing both free and paid services aimed at helping consumers in Houston and other deregulated markets decipher confusing electricity offers such as free nights and weekends, multi-tiered pricing plans, and credits for high electricity use.

The companies have built computer algorithms that try to ferret out the best deals based on factors such as past electricity consumption, home size, and the number of people living there. In some cases, it’s just a matter of plugging in your monthly electricity into a website calculator. Others provide more comprehensive services, charging a monthly fee to advise customers which plan will save them the most money and then monitor the market so if prices fall, consumers can switch.

This kind of hand-holding is akin to car buying services, which save customers the time, energy and aggravation researching models, doing comparison shopping and negotiating prices. But unlike cars, there’s no difference in the electricity provided by different retailers, making the emergence of these power buying services a sure sign of the complexity of the system.

“The third party guys demonstrate the consumer is getting ripped off by the Power to Choose artificial configuration that the Public Utility Commission has rammed down the throat of Texas consumers,” said Ed Hirs, energy economist at the University of Houston.

The Public Utility Commission recently recognized the shortcomings of Power to Choose, with chairman DeAnn Walker criticizing retail electric providers for misleading pricing plans. Those plans offer rock-bottom rates at 1,000 kilowatt hours, but if consumers use just one kilowatt hour more, the price per kilowatt hour can jump as much as 10 times.

[…]

Jesson Bradshaw, a power industry veteran, saw an opportunity when his friends and family asked him which company they should sign up with for electricity. He sent them to Power to Choose, but he quickly heard complaints.

“I saw how confusing it was,” said Bradshaw, who worked as a power trader and owned the retail power company Amigo Energy until he sold it to Just Energy in 2011.

Four years ago, he and a partner launched the buying service Energy Ogre. The company charges customers $10 each month to find the lowest price plan and monitor rates to see if it makes sense to switch mid-contract. It doesn’t take commissions from power providers.

Bradshaw said his business is not exactly popular among the retail providers, many of which bet that customers won’t shop for better rates when contracts expire.

“They don’t like us informing the customer,” he said. “ If there is a better rate, we move them. We don’t care which provider.”

Mark Axford of Sugar Land signed up with Energy Ogre about three years ago. Axford said the company switches electricity providers at least once a year and makes sure Axford and his wife do not get hit with penalties. The monthly fee is well worth it, he said.

If you want to save, you have to shop, said Axford. “But who has the time to keep shopping for electricity?”

The trade association for retail electricity providers in Texas said it recognizes that the buying services may help customers sort through offers. But it’s important to note, said Julia Rathgeber, president of the Association of Electric Companies of Texas, that these companies are not subject to oversight by the Public Utility Commission. It’s still up to consumers to decide whether plans are right for them, she said.

Got that? If you’re paying too much for electricity, it’s your own damn fault. Never mind how confusing or time consuming the shopping process is. There’s no reason I can think of why the state couldn’t provide, for free, the kind of easy, at-your-fingertips information that these entrepreneurs have done. Why wouldn’t we want to do that, if the goal of deregulation was to lower prices for consumers? The answer to that is left as an exercise for the reader. In the meantime, here’s the sidebar that tells you how to find the best deal for yourself:

MORE INFORMATION
Companies that help consumers find the best power deals:

Texas Power Guide

Website: TexasPowerGuide.com

Awesome Power Texas

Website: AwesomePowerTexas.com

Geek Your Rate

Website: GeekYourRate.com

Energy Ogre

Website: EnergyOgre.com

Real Simple Energy

Website: RealSimpleEnergy.com

You might also want to go back and look at some guest posts my friend Dan Wallach wrote about picking power plans. Good luck.

Ten digit dialing comes to San Antonio

It’s the end of an era.

The era of knowing someone is from San Antonio based solely on the “210” at the start of a phone number is drawing to a close. San Antonio is outgrowing its singular 210 area code and will have to add a second code, 726, later this year.

The North American Numbering Plan Administration, which oversees national use of area codes, predicts that 210 numbers will be exhausted by early 2018.

Area code 726 will be an overlay code for the region currently serviced by 210, including the majority of Bexar County and parts of Atascosa, Comal, Guadalupe, Medina, and Wilson counties. An overlay area code means that 210 numbers will not change, but 726 numbers will be available to the same area.

The biggest immediate consequence is that San Antonio will cease to be the largest U.S. city in which seven digit dialing is possible, meaning that the old way of dialing local calls without an area code will no longer work.

“Right now we are in what is called a permissive period where you can use either a seven or 10 digit phone number in the 210 area,” said Terry Hadley, communications director for the Public Utilities Commission of Texas, which oversees area codes in addition to all electric, telecommunication, water, and sewer utilities for the State.

The six-month permissive period will end on Sept. 23, meaning that all local calls will require 10 digits, the three-digit area code and a seven-digit phone number. Long distance calls will continue to require 1 followed by 10 digits.

The activation date for the new 726 area code will be Oct. 23.

[…]

The 210 area code has been in place for San Antonio since 1992 and has become part of San Antonio’s identity for some.

“210 is really a brand for San Antonio,” said local resident Sarah Esserlieau. “There are a couple companies that reference 210 to show that they’re local companies, and I don’t know how that will affect branding.”

“Five or 10 years from now, will [210] be almost like a heritage number?” she questioned, suggesting the older area code could create a sense of pride similar to regional pride for area codes in some cities.

Yeah, well, when I was in college San Antonio was still using 512, same as Austin. It was still a long distance call, though, and you had to dial a 1 before the number. I do think 210 numbers will have a bit of prestige for them, as 713 and to a lesser extent 281 numbers in Houston do, but that may not be fully felt until there’s a third or even fourth area code that everyone else can look down on. And don’t worry, you’ll get used to the ten digit dialing thing. Hell, everyone has to do that already with cellphones, right? No big deal.

Here comes the 346

We’re getting another area code.

Starting July 1, Houston area residents might see phone numbers that begin with 346, when a new area code comes to town.

The Public Utility Commission of Texas last year announced a new area code was being added and this week cell phone companies are texting their customers as a reminder.

The new area code will create possibilities for about 8 million new numbers.

Long-time locals have no reason to grumble-they will get to keep their original area codes

The new area code will be the fourth for the nation’s fourth largest city.

[…]

When 346 is activated, it will overlay 713, 281 and 832 in Harris, Fort Bend, Waller, Austin, Montgomery, San Jacinto, Liberty, Chambers, Galveston and Brazoria counties.

A few numbers are still left in 281, 713 and 832, according to the PUC, but the options for new numbers are dwindling.

Houston’s three existing area codes could run out by October, according to some estimates by the PUC.

The new area code might not be used immediately, but the PUC said 346 will be ready that day, just in case the other three codes run out.

I missed the PUC announcement, so I’m glad I caught this. The story reminds me that we got the 832 code, and the 10-digit-dialing requirement that came with it, way back in 1999. That was two years after the introduction of the 281 code, which at the time was based on geography. Guess they were right when they said the overlay codes would last longer. Anyway, what this all means is that when we finally give Olivia a cellphone, it’ll very likely come with a 346 area code. Good to know. Via Swamplot, and Hair Balls has more.

Three four six

Meet your new area code, Houston.

Houston area code map

The Public Utility Commission (PUC) on Thursday announced the addition of area code 346 to accommodate continued growth in and around Houston.

The 346 area code will overlay existing area codes 713, 281 and 832 in Harris, Fort Bend, Waller, Austin, Montgomery, San Jacinto, Liberty, Chambers, Galveston and Brazoria counties.

A map of the affected region is at: http://www.puc.texas.gov/industry/maps/areacodes/Houston.aspx

The North American Number Planning Administrator (NANPA) assigned the 346 area code after projecting that the three existing area codes will run out of numbers by Sept. 30, 2014.

The new area code will not require any reprogramming changes to existing equipment because an area code overlay requiring 10-digit dialing for local calls already exists in the affected region.

The PUC decision allows for industry preparation and customer education from Aug. 1, 2013 through June 30, 2014. Beginning July 1, 2014, new phone numbers can be assigned with a 346 area code.

Unlike previous area code changes, this will not require anyone to change their own number, and as noted in the press release it won’t require a change to how we dial, since we already do ten digit dialing. You wouldn’t think this would be anything but a routine, boring administrative announcement, but apparently there’s something about area codes that get people all het up.

We’ve all seen the Seinfeld episode where the subject of area code discrimination came up, right? The 212 area code ran out of numbers, and 646 was utilized leading to typical Seinfeldian situations of existential dread.

It’s amazing to think that in 2013 when area codes largely have no consequence, that there would be pride in three little numbers. Now zip code pride I can sort of understand. 77002 has a certain cachet, since people immediately think you live at the top of a skyscraper chewing cigars and eating brisket. 77007 shows that you pay too much to live near Washington Avenue. 77006 means that we’re probably neighbors.

346 is an ugly number. 281 is dumpy. 713 is sort of sleek, like a sports car. Maybe it’s the 7. Sevens are sexy. I know people with a 409 area code and they seem to get along alright, besides the dumb Beach Boys references. You know that a 409 area code means that the person is probably adept at a number of farming tools and maybe raised an animal in high school.

My first beeper had a 713 area code, which in Pearland denoted a cosmopolitan air. A worldliness rarely found in such a ‘burb.

(No, it did not.)

Houston rap loves repping area codes. I can’t wait to hear the first 346 area code themed mix tape. Sadly Mike Jones’ 281-330-8004 is no longer a working number. Can you still hit up Paul Wall at the 8-3-2?

I have never heard a rap song that shouts out the dirty 409, have you?

I haven’t seen that episode of “Seinfeld”, actually, but as someone who grew up in New York I do remember when Brooklyn and Staten Island were spun off from the 212 area code into the 718 area code. I don’t remember having any existential angst about it, but I was in high school. I probably had other things to be angsty about. In any event, I just wonder what we’ll do when we run out of area codes.

Will we have enough power?

Maybe not. From the EDF.

It’s understandable that no one seems to have noticed a strongly worded letter to the Electric Reliability Council of Texas (ERCOT) from the North American Electric Reliability Corporation (NERC) last Monday demanding more action to ensure electric reliability in Texas, and asking ERCOT to report back to NERC by April 30 on additional actions taken.  NERC isn’t some federal boogey man either; it’s a corporation founded by the electric industry to create commonly accepted standards for electric reliability across North America, usually through voluntary compliance.  President Bush’s Energy Policy Act of 2005 gave the corporation “the authority to create and enforce compliance with Reliability Standards,” which is where this letter comes into play.

In their 2012 report, NERC highlighted ERCOT as the only region in North America that was not maintaining adequate electric reserves to meet demand, and with this letter they made it very clear that the actions taken to date have not done enough to mitigate that risk.  In the letter, NERC President Gerry Cauley notes that the PUC and ERCOT are continuing to address energy reliability issues, but finds that “solutions have not yet sufficiently materialized to address NERC’s reserve margin concern.”

Cauley goes on to say that “it is still unclear to us how ERCOT intends to mitigate issues that may arise on the current trajectory and when new resources may be available to meet growing demand.”  So according to the corporation whose membership consists mostly of utilities, grid operators, large and small customers, and electric regulators, the actions that the PUC and ERCOT have taken at this point are not enough to ensure we’ll have reliable electric supply, risking blackouts as soon as this summer.

As lawmakers settle into Austin for the next few months they’ll certainly be paying close attention to this issue, though many have indicated they would prefer that ERCOT and the PUC develop the solutions to this problem.  Cauley’s letter serves as notice that the PUC and ERCOT need to be more aggressive if they want to ensure a reliable supply of power in Texas.  Certainly both agencies are putting serious time and effort into keeping the lights on in Texas, including effort so expand existing demand response programs, but NERC clearly thinks they need to be doing more.

This was also noted by Loren Steffy, who says that Texas is now “under more pressure than ever to encourage generation, and that’s likely to mean higher prices at a time when the deregulated market was supposed to be delivering lower prices to consumers”. (He also notes that consumer protections are likely to be weakened, because that’s how we roll in this state.) Thanks to the continued tax credit in the so-called fiscal “cliff” deal, there will be more wind projects gearing up, and ERCOT foresees $8.9 billion in electric transmission projects by the end of 2017, but neither will help in the short term, and it’s still not enough for the longer term. I don’t know what else there is to be done, so just consider this a heads up for when the crunch does hit.

West Texas wind

The wind energy business in Texas is going strong.

BP and other energy companies are funneling millions of dollars into building and operating wind farms in West Texas, helping to transform the oil country into one of the nation’s leading hubs for green energy production.

Skylines dominated by nodding pump jacks increasingly are spotted with spinning turbines. Economies tied to the ebb and flow of commodity prices are finding stability in supplying the power grid.

“We’ve been through lots of booms and busts with the oil and gas industry. The oil and gas areas deplete over time,” said Doug May, economic development director for Pecos County.

“The wind resource here is sustainable. We look at these wind farms as a long-term investment in the future of Pecos County.”

Recent energy analyses predict renewable fuels — including wind, solar and biofuels — will be the world’s fastest-growing energy source in coming decades. BP’s own outlook predicts the country’s renewable energy production will surge 252 percent over the next 20 years.

Wind and solar energy are potentially huge boons to West Texas, which is the perfect location in many ways for harvesting both kinds. There’s already a lot of investment out there, and more is to come. There are some obstacles, however.

West Texas wind farms are at the end of the state’s main electrical grid, managed by the Electric Reliability Council of Texas, or ERCOT. The Public Utility Commission of Texas has been working on plans to build a more robust network of power lines to bring more wind-generated power to major cities.

But those lines are still two years and nearly $7 billion away.

Meanwhile, the federal tax credit that gives wind power generators 2.2 cents for every kilowatt-hour of energy produced is slated to expire at year’s end unless lawmakers approve a renewal.

“If Congress chooses not to renew, there is no hope for the wind industry next year,” [John] Graham, the BP executive, said of the tax credit. “Without it, U.S. wind projects aren’t viable.”

BP has joined the pack of wind executives fighting to keep the production tax credit for renewable energy. Graham said he has traveled to Washington five times since October.

You’d think giving an energy company a tax break would come as naturally to Congress as breathing, but that renewable energy credit was a casualty of the payroll tax cut deal. It could be revived, and again, it’s hard to imagine a world in which energy executives have to go begging for bones from Congress. The ERCOT issue has been in the works for four years already. That will be a big deal when it’s done.

New clean air rule from EPA

A new rule from the EPA that seeks to limit pollution that originates in one state but affects others as well should have a big effect on Texas.

The rule, which covers 27 states and the District of Columbia, will require aging plants to be upgraded with modern equipment to reduce emissions of sulfur dioxide and nitrogen oxide. Some companies might close their plants rather than install the pollution controls.

Gov. Rick Perry criticized the rule as “heavy-handed and misguided,” while U.S. Sen. John Cornyn said it is “another blow” to Texas by the Environmental Protection Agency that could threaten jobs and the affordability of electricity.

EPA Administrator Lisa Jackson said those fears were exaggerated, particularly in Texas, where some already have moved to clean up their coal-fired plants.

“Texas has an ample range of cost-effective emission reduction options for complying with the requirements of this rule without threatening reliability or the continued operation of coal-burning units,” Jackson said.

[…]

The Texas Public Utility Commission estimated that the standard could force 18 plants – many of which were built in the 1970s – to install expensive equipment, change fuel or prematurely retire.

Last month, San Antonio’s city-owned utility pledged to shutter its coal-fired plant by 2018 rather than install a $550 million scrubber to cut pollution. CPS Energy said the money would be better used toward newer forms of energy, including natural gas and solar.

Environmentalists said state officials and industry should not be surprised by the new standards. The Bush administration proposed a similar action, known as the Clean Air Interstate Rule. But the U.S. Court of Appeals for the District of Columbia ordered the EPA to revise the rule in 2008 after deciding the agency had overstepped its authority.

You know what that means: More litigation from the usual dirty-air-loving suspects. As such, I don’t know if the new rule, now known as the Cross State Air Pollution Rule, will ever be enforced. Sure seems to me to be the sort of thing for which federal authority is needed, but what do I know? Texas Vox and the Texas Green Report have more.

Illegal electrons

Hilarious.

As Texas struggles to keep the lights on, who should come to the rescue? Mexico. That’s right, Mexico’s state electricity company on Wednesday started supplying electricity to Texas, where cold weather and power shortages forced rolling blackouts across the state. Mexico’s Federal Electricity Commission issued a statement saying it “was determined to support Texas with electrical energy” as its neighbor to the north scrambled to deal with its power woes.

If we can figure out some way to harness the energy from all of the heads that will explode as a result of this, we ought to be able to avoid any summer brownouts, too. You can also thank wind power for keeping the lights on. No word on whether or not it was a Mexican wind, however.

On a more serious note, you might be wondering why we experienced rolling blackouts in the winter, for a weather event that we knew was coming for days, and without any advanced notice of said blackouts. The Public Utility Commission is also wondering. Hopefully they’ll get some answers. Perhaps if Governor Perry spent more time in Texas and less time gallivanting around the country, he’d know what was going on, too. PDiddie, McBlogger, and Texas Vox have more.

UPDATE: From California to Kentucky. Our Governor does get around.

More renewable energy coming?

If the PUC says so.

The Public Utility Commission is mulling a shot in the arm to the renewables industry, as it is to energy efficiency. Sometime after a March 31 public workshop, the commission is expected to put forward a formal proposal that could require the state to develop 500 megawatts of non-wind renewables by the end of 2014. That equates to barely 5 percent of the amount of wind capacity already on the Texas grid but represents a leap for technologies that are almost invisible in the state today. “It’s a big number,” says Michael Webber, the associate director at the Center for International Energy and Environmental Policy at the University of Texas. There is less than seven megawatts of solar power in Texas right now, Webber notes.

Efforts to go big have so far fallen short. The Legislature tried to pass its own version of renewables assistance last session, and advocates got so optimistic about the dozens of bills promoting solar power that they dubbed it the “solar session.” Yet just about everything failed to pass. This not only disappointed solar installers but dashed hopes of attracting a run of solar panel factories to the state. “We’re much more likely to build a manufacturing industry for solar if we have a market for solar here,” Webber says.

The regulatory push for new renewables would use essentially the same type of incentives that have propelled wind power. Wind surged beginning in 1999, thanks to the clunkily named “Renewable Portfolio Standard,” which required Texas to get 2,000 new megawatts of electricity from renewables by 2009. Once Texas utilities and wind generators got the idea, they quickly surpassed the requirement, and the Legislature came back with a stronger goal in 2005: 5,880 megawatts by 2015. That, too, has long since been exceeded: Texas has more than 9,000 megawatts of wind already installed.

The PUC has already put forward a “strawman” proposal for promoting non-wind alternative power that would require 50 megawatts (one-tenth of the 2014 amount) to come from solar power. The “strawman” designation means that it is not yet a formal proposal but rather a placeholder that can draw early comments.

The solar option seems to have support on the PUC. “We’re going to try to do some more on sun,” Barry Smitherman, the chair of the commission, told an audience at a Renewable Energy World conference in Austin last month.

More here. The solar initiatives failed when voter ID derailed everything at the end of the session. The bills had passed in the Senate but never came to a vote in the House as the chubfest ran out the clock to kill voter ID. One hopes that these bills will get another shot in 2011, but with redistricting and the budget mess on the agenda, it’s hard to see how anything else can get enough oxygen. I hope so, but I wouldn’t count on it. This will have to do until then. More from the Statesman and from Forrest Wilder on a related matter.

Taking another step for solar power

Texas missed out in the last legislative session on a chance to take a big step forward with solar energy, but there are still some things that can be done to keep moving in that direction.

Texas already leads the nation in producing wind power, and given its sunny climate, scientists say it has the capacity to dominate solar, too.

To help make that happen, solar advocates are urging the Texas Public Utility Commission to set solar usage requirements for electric retailers.

“We actually are a perfect environment, economically and thermodynamically, as a raw resource for solar, but it hasn’t taken off,” said Michael E. Webber, an assistant professor of mechanical engineering at the University of Texas.

“However, I think it’s about to,” said Webber, who is also associate director of UT’s Center for International Energy and Environmental Policy.

The PUC, an agency run by three gubernatorial appointees, is considering a plan to give solar power the same kind of boost that the state gave to wind power in 1999.

The Legislature first told the PUC to boost solar power and other nonwind renewable energy sources in 2005, and the agency is now taking steps to implement those instructions.

[…]

Although Texas leads the nation by far in the potential for solar power, it trails many smaller states such as New Jersey in putting solar power in service. “New Jersey?” Webber asked in mock disbelief. “A small, cloudy state outdoes Texas?”

Texas has done well in getting wind energy going, and its renewable energy standards are at the forefront nationwide. But it does seem strange that we haven’t done more to develop solar energy. Encouraging the utilities to do more is fine, though it will be limited by the lack of a robust transmission network in the same way wind energy has been, but there are other approaches, too. Making it easier for individual homeowners to install solar panels could also accomplish a lot. That was one of the things that the major piece of solar energy-related legislation was supposed to do, but it died in the end. Unfortunately, I fear that the budget situation is going to make a similar bill impossible to pass in 2011, but I hope someone tries anyway. The longer we wait, the farther behind we fall.

In case you were wondering why we have bad air quality in Texas

Ever wonder why we have such lax enforcement of environmental regulations here in Texas? One reason is because the people who head up the agencies that have the power to enforce those regulations are mostly charlatans and industry apologists. Go read Forrest Wilder’s account of a farcical “Cap and Trade Summit” at which the speakers and the audience was basically energy industry lobbyists, right-wing hacks, and the state officials who are supposed to be the ones responsible for making sure they all follow the law. You couldn’t make a stronger case for more federal involvement if you tried.