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February 15, 2011 (512) 463-0300

LACK OF WINTERIZATION LED TO BLACKOUTS

Senate Committee on Business and Commerce, Senate Committee on Natural Resources
Members of the Senate Business and Commerce Committee and Natural Resources Committee listen to Railroad Commissioner Mike Williams explain how natural gas transmission affected the rolling blackouts on February 2, 2011.

(AUSTIN) — Some power companies had not prepared their plants for extreme cold before the severe winter weather that hit Texas the first week of Februrary, according to testimony offered before a joint Senate panel on Tuesday. Members of the Senate's Business and Commerce Committee and Natural Resources Committee heard from state officials and energy executives about the rolling blackouts that occurred in Texas on February 2nd. According to H.B. "Trip" Doggett, the CEO of the Electric Reliabilty Council of Texas (ERCOT), the loss of generation at 82 different units that night were all caused to some degree by equipment failure due to cold weather.

Barry Smitherman, Chairman of the Public Utility Council, offered legislators three reasons why equipment failure led to rolling blackouts statewide. First was a lack of communication between various agencies that oversee the power grid in Texas. Second was problem with the state's natural gas supply. Electric supplies were accidentally cut to some gas plants, so they weren't able to supply additional gas needed to generate electricity. Finally, and most importantly, was a lack of adequate winterization to protect against extreme cold. Smitherman said that all plants in Texas are weatherized, but mostly to protect against hurricane conditions.

One of the solutions the PUC is looking at, said Smitherman, is a review of all emergency plans at the various power generators to ensure they have adequate protection against future cold weather events. He thinks that current statutory authority combined with market forces are enough to encourage suppliers to better prepare.

Lt. Governor David Dewhurst, Senator Eddie Lucio
Lt. Gov. David Dewhurst (left) and Brownsville Senator Eddie Lucio (right) pose with Traci Wickett, President and CEO of United Way of Southern Cameron County as the Senate honored the United Way's contributions in Texas.

Senators were concerned that some generators may have anticipated the cold weather and tried to game the system for their own profit. In Texas' unregulated market, many generators opt to bid on power generation a day early. So they buy low and the next day, when weather brings plants offline and the supply of electricity drops, they can sell electricity at a higher rate. On February 2nd, the price of electricity rose to an astronomical level of $3,000 per kilowatt hour. San Antonio Senator Leticia Van de Putte wanted to ensure that power companies weren't profiting from their customers outages. "I think we really do need to look and make sure somebody wasn't buying at $30 and selling at $3,000.", she said. Business and Commerce Committee Chair Troy Fraser of Horseshoe Bay told her that the state's independent market monitor had found no evidence of fraud in the market in the days leading up to the freeze.

Moreover, the event appears to have cost some power companies dearly. Luminant Energy, one of the largest generators in Texas, had outages at 3 coal-fired plants and a few small gas generators due to cold weather. Luminant CEO David Campbell told the committees that his company was willing to work with the state to ensure that a similar outcome can be avoided next time. "I want to assure the committees that we are very focused in learning the causes of each shutdown; we are evaluating improvements to processes and operations so that we will do better the next time extreme cold weather hits," he said.

The Senate Redistricting Committee will hold the last of its outreach meetings Wednesday, before members begin the process of drawing and negotiating new congressional district lines. Throughout the interim, the Redistricting Committee traveled around the state to let citizens tell lawmakers how they want the redistricting process to proceed. Wednesday will be the last chance for Texans to weigh in before federal census data comes in. The Committee will meet in the Capitol extension auditorium at 1:30 p.m.

The Senate will reconvene Wednesday, February 16 at 11 a.m.


Session video and all other webcast recordings can be accessed from the Senate website's Audio/Video Archive.

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