Texas power grid

‘The Lights Will Stay On' in Texas This Winter, ERCOT, PUC Say

Inspections underway by ERCOT teams checking on winterization efforts at hundreds of power generators statewide

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Peter Lake, chairman of the PUC, and Brad Jones, interim CEO of ERCOT, held a joint news conference Wednesday morning to update Texans on the state’s efforts to improve grid reliability for the winter.

The Electric Reliability Council of Texas and the Public Utility Commission of Texas assured Texans Wednesday the state's power grid is "stronger and more reliable than ever" and that "the lights will stay on" this winter.

After a winter storm in February 2021 killed more than 100 people and covered much of the state in snow and ice while leaving millions of Texans in the cold and without power for several days, reporters, citizens, and lawmakers all called for investigations into ERCOT, the agency that manages the state's power grid, and demanded accountability for the loss of power and lives.

Peter Lake, chairman of the PUC, and Brad Jones, interim CEO of ERCOT, held a joint news conference Wednesday morning to update Texans on the state's efforts to improve grid reliability for the winter.

Peter Lake, chairman of the PUC, and Brad Jones, interim CEO of ERCOT, held a joint news conference Wednesday morning to update Texans on the state's efforts to improve grid reliability for the winter and assured that the power would be there when Texans need it most.

That's in light of a NERC’s 2021-2022 winter reliability assessment report released in November that said if the state suffered another historic storm power reserve margins could fall short of the amount needed by as much as 37%

Lake said Wednesday the groups are operating at lightning speed to improve operations, enhance the power grid and ensure reliability this winter through improved checks and balances that will ensure greater reliability.

As a combination of all of these efforts, the ERCOT grid is stronger and more reliable than ever. We go into this winter knowing that because of all of these efforts the lights will stay on.

Peter Lake, chairman of the Public Utility Commission of Texas

Among the changes, Lake said the state has more power generators online than ever before and has established a rule that designates critical natural gas infrastructure to ensure that fuel from the most important natural gas facilities keeps flowing to power plants that burn the gas to generate electricity.

Lake said the groups have worked to achieve unprecedented coordination between both the Public Utility Commission and the Texas Railroad Commission along with never before achieved cooperation between the natural gas industries and the power generation industries.

"For the first time ever, we're going to use every possible electron before asking Texans to turn down their homes and businesses," Lake said.

Perhaps most importantly, Lake said that for the first time ever the PUC will be requiring winterization of power plants in Texas. A rule passed a month ago requires generators to winterize by Dec. 1 and that CEOs must then attest to the steps taken to make sure their plants will remain online.

ERCOT will then inspect those generators to make sure they have put the proper equipment in place to prevent failures due to weather. ERCOT said they will be conducting inspections of more than 300 generators by 21 transmission providers between Dec. 2 and Dec. 29 and that they have hired 12 people and two contracting firms to conduct those inspections and set best practices for the fleet.

To date, ERCOT interim CEO Brad Jones said they have completed 55 inspections.

"So, as we go into these power plants…what we’d be looking for is, for example…have they put windbreaks around the right facilities? To make sure wind chill doesn’t cause some problems with equipment. Have they put thermal blankets of the right types of equipment?" Jones explained. "Have they appropriately set heat tracing in place so pipes don’t freeze up during weather?"

Lake said the PUC also increased penalties for violations of winterization standards of up to $1 million per day, per incident.

"We are grateful for the generators who have been proactive in preparing their power plants for this winter, which is the majority of our fleet. Those that have not been proactive will be penalized swiftly and heavily," Lake said. "As a combination of all of these efforts, the ERCOT grid is stronger and more reliable than ever. We go into this winter knowing that because of all of these efforts the lights will stay on."

Shortly after the press conference Wednesday, the PUC announced it has filed violated against eight power generation companies that allegedly failed to file readiness reports mandated in new weatherization requirements: Cooke Solar, Bull Creek Wind, Cotton Plains Wind, Lamesa Solar, Midway Solar, OCI Alamo, Shell Oil Company and Texas Big Spring LP. Together, the eight companies face more than $7.6 million dollars in fines.

The largest single penalty levied is a $2,375,000 fine recommended against Shell Oil Company, which the PUC claims failed to file winter weather preparedness emergency plants for four generating units the company operates.

In a statement to NBC 5 Wednesday, spokesperson Natalie Gunnell emailed "Shell’s generation assets have weatherization plans in place and are prepared to operate in the event of extreme weather.  We recognize the importance of clearly documenting weatherization plans for generation assets in ERCOT, including by completing the required winter weather readiness report. Each of our assets referenced in the PUC document has such a plan and has implemented the weatherization standards described in the PUC’s Weather Emergency Preparedness Rule. Shell takes its regulatory obligations seriously and will be actively working with the PUC and ERCOT to ensure the appropriate winter weather readiness report is submitted."

Cat Strumlauf with Apex Clean Energy, Inc. emailed NBC 5 the following statement: “As the asset managers of Cotton Plains Wind I, LLC, we aware of the Commission’s Notice of Violation for the project. We believe there have been some administrative misunderstandings, and we are working with the Commission to resolve the matter.”

While Lake said the number of changes made between the various groups required to generate power in Texas is unprecedented, the PUC and ERCOT will continue to work to further improve the state's power grid.

The PUC also addressed the wholesale price of electricity in the state, cutting the maximum megawatt per hour charge nearly in half.

"Recently the commission reduced the highest price that can possibly be charged in ERCOT from the infamous $9,000 per MW hour to $5,000 per MW hour. Starting Jan. 1 those extraordinarily high prices can never be charged again," Lake said.

Ed Hirs, a professor of energy economics at the University of Houston and an Energy Fellow at the university, said the changes are unprecedented. However, Hirs noted the biggest challenge before ERCOT right now is a public trust.

"Last winter, ERCOT said they were ready and prepared. PUC said they were ready and prepared. We know that was not the case," Hirs said. "It took us years to get into this situation. It’s going to take us really more than a few months to get out of it. A lot of investment has to take place. This is time and material. A lot of labor."

Gov. Greg Abbott (R) said in June that legislative reforms would "fix all of the flaws" but then the very next month demanded aggressive action from state utility regulators Tuesday to shore up that grid.

Beto O'Rourke, a Democratic candidate for Texas governor, released a statement Wednesday saying the steps taken by the PUCT and ERCOT may not be enough.

“We can winterize every power plant in the state, but that won’t be enough to keep the lights on this winter unless state leaders require gas supply companies to weatherize their infrastructure," O'Rourke wrote on Twitter. "I urge Texans to prepare for another grid failure in the event of extreme weather this winter."

After months of promises, legislative hearings and debates Texas lawmakers passed a series of bills over the weekend aimed at preventing another electricity disaster, like the one that crippled the state in February.

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