Although relatively rare in Texas history, rolling blackouts have now occurred twice since the state deregulated its electricity markets. The last occurred on Feb. 2, when 1.3 million customers suddenly lost power. Not surprisingly, questions have been raised.
For instance, why did so many of the state’s power plants fail? During the most difficult point of the crisis more than 200 Texas generating plants were unavailable. And did the blackouts expose problems in the state’s wholesale energy market, where prices spiked dramatically?
A new report by the combined staff of two federal organizations attempts to answer some of those questions, while also making recommendations for reform. Released in August, the report finds no evidence of market manipulation during the blackouts and concluded that gas curtailments played little if any role. But the report also concluded that ERCOT, the organization that manages the state’s power grid, could use additional tools to protect against blackouts.
The organizations behind the two-inch-thick document are the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation — FERC and NERC for short. Their report joins other expert examinations of the February blackouts, including those from the Texas independent market monitor, from a federal grid reliability organization, and from a private consultant from Oregon.
Among the key findings of the latest report:
- By communicating with generators and requesting them to come online earlier, ERCOT could have more promptly exposed mechanical issues experienced by generators. This could have prevented some of the failures.
- The typical design of generating facilities in the southwestern United States may have contributed to large number of units shutting down. Unlike generation facilities in the colder climates, southern generating units were built so that many of their auxiliary systems are exposed to the ambient air. Frozen sensing lines, frozen equipment, frozen water lines, frozen valves, blade icing, low temperature limits, and transmission loss caused the loss of 22,805 MW of generation.
- Although natural gas is an important fuel source for the state’s fleet of electric generators, natural gas curtailments did not appear to play a major role in the outages.
- FERC and NERC found no evidence of market manipulation during the event. This conclusion was similar to earlier findings by the state’s independent market monitor.
FERC and NERC also issued recommendations:
- ERCOT should consider rule revisions to allow it to reject scheduled outages by generating units.
- ERCOT should increase its extreme-weather requirements for generation reserves. ERCOT also should have the ability to direct generating units to initiate operational warming prior to forecasted cold weather.
- ERCOT should have the ability to verify a generators’ preparedness for cold weather, including the units’ operating limits and potential fuel needs.
- Generators should take steps to ensure they are prepared for severe cold weather events, including designing temperature parameters for existing units, using heat tracing equipment to inspect the units, and maintaining the unit’s thermal insulation. States in the Southwest should examine whether they need rules to compel generators to submit winterization plans.
- State legislatures should adopt minimum uniform standards for the winterization of natural gas production and processing facilities. Regulatory authorities also should determine whether critical natural gas facilities should be exempted from rolling blackouts.
The NERC and FERC staff compiled their data by conducting site visits with various entities involved in the outages. Staffers also toured facilities and conducted interviews with operations personnel and company executives. You can read their report here.
Is a policy analyst consultant for TCAP, a coalition of political subdivisions in Texas that purchase electricity in the deregulated market for their own governmental use. Because energy costs are typically a significant budget item to our members, TCAP is consistently looking for ways to save our members money, through cost-saving contracts, energy efficiency or demand response programs.