ERCOT Had Concerns About Power Supplies Before Tuesday's Conservation Alert

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NBC 5 Investigates has learned the warning to conserve power that went out to Texans on Tuesday was not the first time that The Electric Reliability Council of Texas (ERCOT) had concerns about a short supply of electricity this week.

In fact, ERCOT issued notices to power plants as early as Sunday noting limited supplies of electricity, according to operations messages posted on ERCOT’s website. In fact both Sunday and Monday, ERCOT issued advisories to power plant operators warning the state's power reserves might be insufficient.

ERCOT says many power plants are down right now for typical spring repairs causing this latest power crunch. About 25% of power generating units in the state are currently offline.

But some energy experts believe the concerns about a lack of power during a relatively mild week in April are also a sign of problems that go far beyond seasonal maintenance issues.

In other states where the power market is more highly regulated, power companies are paid to produce more excess power that can be used in a pinch like Texas is experiencing this week.

Texas doesn't do that as much. So, at times of the year the Texas grid runs with a much thinner margin for error.

The de-regulated Texas power market was built on the theory that during high-demand periods power generators would have an incentive to be ready to provide plenty of power because when demand rises prices go up and there are bigger profits to be made.

But the massive outages in February showed those profit incentives were not enough to prevent a crisis, and now some analysts argue the April supply issues are another reminder of flaws in the market structure.

“The main thing is we're paying for an electricity grid that's broken,” said University of Houston energy expert, Ed Hirs.

Hirs says Texas runs its grid too close to the edge.

For example, the data ERCOT posted on Wednesday showed the state had about a 5% reserve power margin. Reserve power is power ERCOT can call on if needed.

Experts tell NBC 5 Investigates, in the spring other states can have margins three to four times larger because they pay power generators to produce more excess power that's ready just in case the temperatures plummet or soar or plants unexpectedly shut down.

Texas could also buy a bigger safety margin paying for more backup power to avoid outages but power bills for consumers would go up.

“We're going to have to spend some money. And since this is the Texas grid, it's a Texas problem,” said Hirs.

NBC 5 asked ERCOT if additional reserve power would make sense. A spokesperson said that's up to the legislature to decide.

"If they want to reform us we are happy to make changes," an ERCOT spokesperson said.

Some analysts believe reform is needed because of how the current market acts on days like yesterday. 

As power became scarce the price of power also shot up, way up to $2,000 a megawatt which is about a 200% percent increase.

So power plants ready to run yesterday were able to rake in huge profits even as Texans were being warned the state might not have enough power if they didn't conserve.

“They failed to deliver what the contract that is for cheap, reliable electricity. And on top of that then they get to price gouge. You know, something's wrong with this market,” said Hirs.

State Senator Kelly Hancock vowed again Wednesday to push through legislation to deal with the power supply issues.

In a statement to NBC 5, Hancock said, “This week's reserve margin concerns reinforce the fact that Texans need and deserve a comprehensive, long-term legislative response that keeps our eye on the main goal: real reliability. We can't afford to get this wrong."

Two reform bills Hancock supported passed the state Senate Wednesday and are headed for the House.

One of those bills would require wind and solar companies to pay for replacement power on days they cannot produce which could help increase reserves on those days.

But with more wrangling over the reform bills ahead, before the legislative session ends, it will be weeks before it’s clear which reforms will be put in place.

It’s also not clear home much Texans will be willing to pay to fund comprehensive reforms.

After the February outages, The University of Houston asked in a survey if Texans want power plants better protected against cold weather. Most said they were not interested if that would increase their electric bill.

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