TEXAS — Electric Reliability Council of Texas (ERCOT) CEO Bill Magness says of the nearly 700 power generation plants in the state, 10% of them went offline because of this extraordinary winter storm, forcing millions to go without power for hours or even days, with no end in sight.
"The way the storm blew in, we just saw a tremendous amount of our generating capacity get either damaged or have a hard time running or, for whatever reasons, come off the system,” Magness said. "And that required us to take off this really large amount of demand which caused these outages to be so extensive and last longer than were anticipated.”
ERCOT is responsible for maintaining the integrity of about 90% of Texas’ electric load and is essentially an “electrical island,” as the ERCOT Interconnection is separate from the Western and Eastern Interconnections. Local utility companies decide where to shut off power, but ERCOT is the entity that mandates when to shut off power. As for when Texans could see their power restored? Magness didn’t have a concrete answer, but said ERCOT had gotten the system “stable,” but not back to a good position.
"We've already seen some reductions, we're going to continue to see those reductions roll out,” Magness said. "I think, you know, certainly [Tuesday, Wednesday] are the keys, and hopefully we get the generation there, we’re back up. But given that there's an uncertainty with an asset I don't control, you know, I don't want to guarantee people something that isn't realistic, but I think we're going to be making great progress [Tuesday and Wednesday]. What it's dependent upon is managing the addition of generation resources, you know, supply side resources onto our system. The greater speed with which that gets completed, the greater speed we can get people back in power."
So what exactly went wrong? Magness says Sunday night into early Monday morning, ERCOT saw a risk of an actual catastrophic blackout and had to take action.
"ERCOT’s purpose, its fundamental purpose in grid management is to be sure that we don't have a blackout. And a blackout is an uncontrolled situation where you see equipment breaks - very dangerous,” Magness said. "What we're experiencing today, while it feels like a catastrophe to everybody experiencing it obviously with the cold weather and as long as it's gone on, the catastrophic blackout is a much worse event."
And remember those “rotating outages” that were anticipated? Despite knowing about this weather event beforehand, the entities tasked with keeping electricity flowing found that given the severe supply issues, they weren’t actually able to carry out the process of rotating the outages, leaving millions in the dark.
"When there was so much demand that had to be reduced, that made it difficult for those to rotate. You know, for example, if you have 500 megawatts that you need to put in outages, if you can move those megawatts around different parts of your territory, that's the rotation. You know, but what we were seeing here is outages that went so much further than what we needed to keep the system stable, that it was difficult for the utility to implement these outages, to move them to different parts of their territory,” Magness said.
Earlier in the week, Mother Nature came with a vengeance, and due to a possible lack of winterization by power generation plants across Texas, units went offline, likely due from frozen instruments at natural gas, coal and nuclear facilities. Of note, winterization recommendations are not mandatory.
"The usage of the power was very, very high and on the other side of the equation, it was more difficult for the generators of power to meet that demand because of weather issues,” Magness said. "For example, you know, wind turbine blades freeze, you know, natural gas plants that have various issues. Really, all kinds of different resources were affected by what was going on in the storm."
Magness said a week before this weather event, ERCOT put out market notices and spoke to the generators and participants in the market telling them what to expect.
"A lot of attention to winterization was given after the 2011 rotating outage, the last time we had rotating outages. We had, you know, cold weather in 2018 that we felt like was pretty significant. We ended up setting an all-time winter peak that day for usage. And we didn't have the issues we had in 2011, I think, so there was an encouraging evidence that, you know, we were seeing winterization have impacts by those folks who have had undertaken it. In addition, we undertook efforts after 2011 to be actively participating and helping those who own the assets understand best practices, you know, do spot checks. We just wanted to be helpful in the process. And there was a lot of attention given to it at the regulatory level as well,” Magness said. “Ultimately, the folks who own those assets have extremely strong incentives of every kind to keep them working, to keep them, you know, not dropping off the system unexpectedly. And I think, you know, we have seen some progress on that.”
So what now? ERCOT says its top priority is getting people back online, then take a look at what went wrong.
“I think we've tried in the past few days certainly to recognize these are not rotating outages, you know, today, in reality, for the folks who were suffering them. Absolutely. When we began the process of asking people to reduce demand and taking people off to manage that, we anticipated we could do this in a rotating outage way. I think what we found is Sunday night, when the supply issues became severe enough, we were having to ask for so much that the utilities then found they were not able to move them around [like] they normally would. So I think we've certainly recognized that there are people, you know, suffering, and who had to suffer with this situation for a couple of days now. And when it doesn't move, when you're not able to you know get your home heated for a bit, that's a terrible situation. We absolutely recognize that but that's basically the reason why some folks have been stuck in that situation where hopefully we can get them restored as soon as we can balance the system out and do that."
We are ordering an investigation into ERCOT and immediate transparency by ERCOT. pic.twitter.com/Mt2GPlaFuE— Greg Abbott (@GregAbbott_TX) February 16, 2021
Governor Abbott Tuesday declared ERCOT Reform an emergency item, calling for an investigation into the corporation and immediate transparency.
“The Electric Reliability Council of Texas has been anything but reliable over the past 48 hours,” said Governor Abbott. “Far too many Texans are without power and heat for their homes as our state faces freezing temperatures and severe winter weather. This is unacceptable.”
Magness said he agrees that given an event of this scale and importance, looking into what’s going on at ERCOT is critically important.
“I have no objection whatsoever to opening up and showing everybody, both in the government and the market participants, the actions we took, whether we made mistakes and having accountability around that. ERCOT is an entity that has to have the trust of the folks in the power markets, including the governor, the Legislature. And if we don’t, something’s gotta change at ERCOT,” Magness said.
In an open meeting this evening, PUC commissioners directed @ERCOT_ISO to modify electricity pricing models to more accurately reflect the scarcity conditions in the market.— PUC of Texas (@PUCTX) February 16, 2021
Read more here: https://t.co/TbXR4qzy4V#ServingTexans pic.twitter.com/TjWvrjZRH2
The Public Utility Commission of Texas approved an emergency order on Monday that requires generators to continue to sell electricity on the statewide power grid, even though there are a reduced number of customers without power.
"The decision was spurred by ERCOT’s discovery that energy prices across the system were clearing at less than the current system-wide offer cap of $9,000 established by Commission rule,” the PUC’s emergency order read. "When notified, the Commissioners agreed that energy prices across the system clearing as low as approximately $1,200 during the first day of the weather crisis was inconsistent with the fundamental design of the ERCOT market. Because energy prices should reflect scarcity of the supply, the market price for the energy needed to serve load being shed in the face of scarcity should also be at its highest.”