Texas Power Plants Swore They Were Ready for the Next Big Freeze. Many Weren’t.
By Russell Gold | January 16, 2023
Last month, a severe Arctic blast descended upon much of the country, including Texas. Electricity usage rose dramatically, straining the power grid. Fortunately, our state avoided the kind of deadly blackouts it experienced in 2021. To the east, some North Carolina residents celebrated Christmas Eve with rolling blackouts.
So last week, Texas regulators took a victory lap. “This was a nonevent,” declared Peter Lake, chairman of the Public Utility Commission. He credited reforms implemented during the past year and a half. And, to be sure, some of those reforms seem to have made a difference.
But let’s not get ahead of ourselves and spike the football. We’re not in the end zone yet. Since the Christmas week deep freeze, we’ve learned a lot about what worked—and what didn’t. Some of those revelations are concerning.
Most troubling is that Texas still has difficulties in delivering natural gas during the coldest weather. When temperatures drop, we crank up our gas-fired furnaces and use a lot of electricity. We need a lot of natural gas to stay warm. When we can’t get it, Texans can die.
Which is what happened in February 2021, after a large number of gas processing plants seized up and shut down because of icy weather. Over a five-day period that month, the state’s gas processing capacity fell by 84 percent. Without those facilities treating the gas as it comes out of wells, gas can’t reach the state’s pipelines. This past December, the system’s performance was better, but still not great.
Over a two-day period in the run-up to Christmas, the state’s gas processing capacity fell 34 percent, according to Wood Mackenzie, an energy data and analytics firm. Still, “the fact that it was as cold as it was and we still had ample supply is a positive,” said Ben Chu, the firm’s head of trading analytics.
But that drop in gas processing capacity troubles Joshua Rhodes, a founding partner at the energy consulting firm IdeaSmiths and a research scientist at the University of Texas at Austin. “It doesn’t give me much confidence that we addressed the gas supply issues we faced with Winter Storm Uri,” he said.
The Texas Railroad Commission, the ill-named state agency that oversees the oil and gas industry, passed rules that required gas processing plants to be prepared for cold weather by December 1, a couple of weeks before the recent deep freeze. Fines for violations of these rules could be up to $1 million, though that would require the Electric Reliability Council of Texas to declare an emergency, which never occurred last month. A Railroad Commission spokesman said he wasn’t aware of the Wood Mackenzie data. “The critical gas supply held up,” said R. J. DeSilva. “There was enough gas available for the electricity generators. There was no lack of gas.”
Yet there clearly wasn’t enough gas in the state’s pipelines. Atmos Energy, a major supplier of gas to homes in the state, couldn’t deliver enough gas to customers in the suburbs of Dallas and Austin. Governor Greg Abbott has asked for an investigation into what happened.
Power plants likewise had trouble obtaining gas to burn. Dan Woodfin, head of system operations for ERCOT, Texas’s predominant power grid, said the council ordered several generators to burn fuel oil (a relatively dirty, carbon-intensive energy source that has been getting slowly phased out since the eighties) because they didn’t have enough natural gas. This backup fuel was available because of a new, expensive reform implemented since the 2021 blackouts. ERCOT paid $52.9 million this winter for nineteen power plants to have extra backup fuel on hand, costs that will be passed through to the electricity bills of Texans.
At least 2,100 megawatts of natural gas–fired electrical generation—enough to power 420,000 homes—had to shut down at some point during the critical period of December 22–24 because of a lack of gas. Many other power plants experienced outages as well, but those didn’t provide reasons to regulators, so it’s possible that the dearth of gas affected considerably more generators. ERCOT said last week it was investigating why so many plants tripped off-line.
One of the other changes the Legislature implemented in the 2021 session was a new “winter weather readiness” requirement. Power plant operators needed to sign declarations that they have prepared to operate in cold weather. Despite that, about 150 power-generating units experienced unplanned outages in December. (There are more than 800 power plants in ERCOT, some operating multiple units.) Rich Parsons, a spokesman for the PUC, has promised investigations will be conducted. “Any generator found to be in violation of our winterization rules will be held accountable, and that could include fines of $1 million per violation per day,” he said.
So were the winter weather declarations worth more than the paper they were printed on? That’s not clear yet. At least one member of the PUC, Abbott appointee Kathleen Jackson, indicated that she preferred not to flex regulatory muscle to find out. “This isn’t a gotcha,” said Kathleen Jackson during last week’s meeting. “This is a process that is put in place that encourages [power plants], after the event, to go back and actually do a root-cause analysis on your own, determine what you could have done better.”
Sometimes a gotcha is necessary. Power plants provided signed and notarized statements that they would be ready for another Arctic blast, and some failed to comply. Root-cause analyses are fine and dandy, but nothing gets CEOs to sit up and pay attention quite like a million-dollar fine. No one wants a repeat of 2021: as many as several hundred deaths, 11 million Texans without power, and a hit to the economy of something like $100 billion.