Texas regulators, lawmakers, governor and AG want answers on outages, soaring bills
February 22, 2021
by Paul Ciampoli
APPA News Director
February 22, 2021
Texas utility regulators, state lawmakers, the governor and the state attorney general are moving to get answers on events tied to the recent series of rotating power outages implemented by the Electric Reliability Council of Texas (ERCOT) and soaring power bills faced by some customers.
ERCOT on Friday, Feb. 19 said it expected to come out of emergency conditions later that morning. “There is enough generation on the electric system to allow us to begin to return to more normal operating conditions,” said ERCOT Senior Director of System Operations Dan Woodfin.
No additional outages were needed overnight to keep power supply and electric demand in balance, and only a few generating units tripped, the grid operator said, noting that electric utilities continued to address remaining customer outages.
As of 7:30 on the morning of Feb. 19, approximately 34,000 megawatts of generation remained on forced outage due to the winter weather event. Of that, nearly 20,000 MW was thermal generation and the rest is wind and solar.
In the wake of record-setting freezing temperatures, ERCOT entered emergency conditions and initiated rotating outages at 1:25 a.m. on Monday, Feb. 15. Two other grid operators — the Southwest Power Pool (SPP) and the Midcontinent Independent System Operator (MISO) — also took steps in response to bitterly cold temperatures.
Texas PUC launches investigation
The Public Utility Commission of Texas (PUCT) on Feb. 19 said it was launching an investigation “into the factors that combined with the devastating winter weather to disrupt the flow of power to millions of Texas homes.” The action took place at an emergency open meeting held by the PUCT.
The Commission also unanimously approved a series of steps designed to protect retail electric customers feeling the financial effects of the ERCOT grid event.
“The immediate impact of this terrible weather was the loss of power for millions of Texas households and the financial aftershocks could be devastating,” said PUCT Chairman DeAnn Walker in a statement. “We must act swiftly to discover not only how this crisis came together, but also take meaningful steps to protect electricity customers.”
The Commission said that chief among its customer-focused actions was the decision to waive deadlines surrounding the Provider of Last Resort (POLR) program in which retail electric providers (REPs) volunteer to accept the customers of other REPs exiting the market.
These “volunteer” REPs are required to charge a competitive rate, rather than the higher so-called “POLR rate.”
The changes include extending the registration deadline for REPs willing to serve as a volunteer provider in order to expand the pool of available providers and delaying customer transitions to volunteer providers until February 24, 2021 to allow the new POLR REPs time to register and prepare for the influx of new customers.
Commissioners delegated authority to the agency’s Executive Director to execute the plan.
Texas state lawmakers schedule hearings
Meanwhile, Texas state lawmakers have scheduled hearings for this week to examine events surrounding the outages.
On Feb. 25, the Committees on State Affairs and Energy Resources in the Texas House of Representatives will hold a joint public hearing “to consider the factors that led to statewide electrical blackouts during the recent unprecedented weather event; the response by industry, suppliers, and grid operators; and changes necessary to avoid future power interruptions.”
And Texas Senator Joan Huffman on Feb. 18 announced that the Senate Committee on Jurisprudence will hold a hearing to examine the law and jurisprudence governing ERCOT and the PUCT.
Texas law charges the PUCT with the duty to oversee ERCOT, and the hearing will study whether additional jurisprudential safeguards, such as statutes or administrative provisions, could have prevented the ongoing crisis, Huffman’s office said in an news release.
“The Senate Committee on Jurisprudence is committed to investigating the legal implications of ERCOT’s and the PUC’s action, or inaction, in contributing to this catastrophe across our state,” Huffman said. “As critical entities to the state, their legal responsibilities to the people they serve must be crystal clear in state law. If there are ambiguities, inconsistencies, or potential deficiencies in state law, they must be addressed immediately through legislative action,” she said.
The date of the hearing will be released in the coming days as the Senate prepares to reconvene.
The hearing is intended to complement a hearing of the Senate Committee on Business and Commerce on February 25 by examining the crisis through a jurisprudential lens, the news release said.
The purpose of the Senate Committee on Business and Commerce hearing will be to examine extreme weather condition preparedness and circumstances that led to the power outages as directed by ERCOT, according to a notice from the committee.
The committee will also review generator preparedness and performance, utility outage practices, natural gas supply, and the reliability of renewable generation, as well as overall ERCOT system resilience.
On Saturday, Feb. 20, Texas Gov. Governor Greg Abbott convened a meeting with Lieutenant Governor Dan Patrick, Texas House Speaker Dade Phelan, and members of the Legislature “to discuss the spike in energy bills affecting many Texans following the recent power outages throughout the state,” Abbott’s office said.
Abbott opened the call by discussing financial challenges many Texans will face as a result of the winter storm. He also gave an update on his conversations with the White House and potential federal relief that may be available to Texans.
The governor discussed the need to ensure that Texans are not left with unreasonable utility bills they cannot afford because of the temporary massive spike in the energy market, according to a readout of the meeting.
On Feb. 17, Abbott’s office noted that the governor had ordered natural gas producers not to export product out of state until February 21 and instead sell it to providers within Texas.
On Feb. 16, the governor declared the reform of ERCOT an emergency item this legislative session. In declaring this item an emergency, Abbott called on the legislature to investigate ERCOT “and ensure Texans never again experience power outages on the scale they have seen over the past several days,” a news release from the governor’s office said.
Texas attorney general
Texas Attorney General Ken Paxton on Feb. 19 issued Civil Investigative Demands (CIDs) to ERCOT and other power companies regarding power outages, emergency plans, energy pricing, and more related to the winter weather event.
CIDs were sent to:
- AEP Texas
- Calpine Corporation
- CenterPoint Energy Services
- Griddy Energy
- LaFrontera Holdings
- Luminant Generation
- NRG Texas Power
- Oncor Electric Delivery
- Panda Sherman Power
- Temple Generation I, LLC
- Texas-New Mexico Power
The CIDs sent to these entities are available here.
A story posted on the Dallas Morning News website on Friday, Feb. 19 reported that Griddy “warned its customers over the weekend that their bills would rise significantly during the storm and that they should switch providers.”
Last week, “foreseeing a huge jump in wholesale prices, the company encouraged all of its customers — about 29,000 people — to switch to another provider when the storm arrived. But many were unable to do so,” the New York Times reported on Feb. 20.
Austin Energy says customers should not expect to see massive electric bills
Texas public power utility Austin Energy on Feb. 20 said it was “aware of media reports regarding potential massive electric bills for non-Austin Energy customers and want to stress to our customers that Austin Energy will not benefit financially in any way from this winter storm event.”
The customers impacted by major bill spikes are seeing electric rates controlled by variable price billing and are therefore vulnerable to sudden price swings from the wholesale energy market, both increases and decreases, Austin Energy noted.
In contrast, Austin Energy’s base rates are fixed and any changes must be authorized by Austin City Council, our governing body, after a thorough rate review process.
The Austin City Council directed Austin Energy to adjust customer’s base electric rates most recently in 2017 when rates decreased 6.7%.
Part of Austin Energy’s rate structure is a Power Supply Adjustment (PSA). Austin Energy charges customers what it costs to provide power to the community. It covers fuel for our power plants, the cost of electricity purchased from the grid and any net revenues or losses experienced as Austin Energy produces and sells power to the grid. The PSA is reviewed annually. The City Council last directed Austin Energy to reduce the PSA by 1.9% in November 2020.
Austin Energy said it will evaluate the impact, or the cost, of buying electricity from ERCOT, minus the net revenue from generating electricity during the winter event. The electric utility will then have a better indication of the financial impact on the PSA and make recommendations to City Council.
Residential customers are billed for their actual energy usage, measured in kilowatt hours (kWh), recorded from their electric meter. Anyone without power during this time period had no electric use recorded from meters during these outage events.
Austin Energy noted that customers are charged only for the power consumed and will be charged at the existing rates as approved in the November 2020 rate tariff. If a customer consumed higher than average kWh, their electric bill will be higher than a normal month. If a customer consumed less than their average kWh, their bill will be less than a normal month.
Austin Energy offers customers insight into their usage and bills at COAUtilities.com, giving information they need to manage their accounts and bills. Auto Pay is a free service and customers continue to receive a bill for review before it is drafted.
Greenville Electric Utility System
Another Texas public power utility Greenville Electric Utility System (GEUS) on Feb. 20 said it “recognizes many of you have concerns about media reports concerning high electric prices caused by the recent extreme weather conditions.”
This concern “is real for non-GEUS customers that are getting their power from electric utilities that depended heavily or solely on the Electric Reliability Council of Texas’ (ERCOT) real-time market to purchase energy during this event,” it said.
“Maintaining stable rates for customers is a priority for municipal utilities like ours so we work hard every day to maximize our energy purchase options,” said GEUS General Manager Alicia Hooks.
GEUS noted its energy portfolio includes a mix of local natural gas-fired generation, wind, solar and fixed price power agreements used to cap energy prices for our customers. This enables the utility to stabilize rates during periods such as this.
“We generated energy from our local power plant through this winter event, which helped protect GEUS customers from record high ERCOT energy costs while also utilizing the other resources in our energy portfolio,” Hooks added.
In a Feb. 20 media briefing, Paula Gold-Williams, President and CEO of Texas public power utility CPS Energy, said that “our focus is to make sure that we can protect our customers as much as possible from the affordability standpoint.”
CPS Energy is “going to use every tool in our toolbox to make sure that San Antonio doesn’t see some of the excessive monthly bills that we think will follow across Texas,” she said.
Public power utilities in other states offer help
Public power utilities from out of state are taking actions to help utilities affected by the outages.
For example, Missouri public power utility Carthage Water and Electric Plant reported that two of its linemen departed on Feb. 19 for San Augustine, Texas to aid in the power restoration efforts.
And Iowa public power utility Waverly Utilities “self-generated electricity for 24 hours from Tuesday to Wednesday to aid southern states experiencing rolling blackouts caused by the extreme cold weather conditions,” reported the Waterloo, Iowa newspaper the Courier on Feb. 19.
“With our self-generating ability, as long as fuel is available, we can isolate the community from grid-reliability issues that we witnessed happen in the southern states,” Waverly Utilities CEO Darrel Wenzel said in the article.
President Biden approves Texas disaster declaration
Meanwhile, President Biden on Feb. 19 declared that a major disaster exists in the state of Texas and ordered federal assistance to supplement state and local recovery efforts in the areas affected by the recent severe winter storms.
Assistance can include grants for temporary housing and home repairs, low-cost loans to cover uninsured property losses, and other programs to help individuals and business owners recover from the effects of the disaster.
Federal funding is also available to state and eligible local governments and certain private nonprofit organizations on a cost-sharing basis for emergency protective measures and hazard mitigation measures statewide.
The President’s action makes federal funding available to affected individuals in a large number of Texas counties. The complete list of those counties is available here.
At the Federal Energy Regulatory Commission’s monthly meeting on Feb. 18, FERC Chairman Richard Glick acknowledged the power outages in Texas and other parts of the country, calling it a “humanitarian crisis.”
He characterized the situation as “simply unacceptable,” and said that, while the short-term focus should be on restoring power to the grid, FERC has a responsibility to ensure a similar situation does not happen again.
Although recognizing FERC’s lack of jurisdiction over ERCOT, the Chairman observed that FERC, along with the North American Electric Reliability Corporation (NERC), has a responsibility to protect bulk power system reliability, including in Texas.
FERC and NERC announced on Feb. 16 that they will open a joint inquiry into the operations of the bulk-power system during the extreme winter weather conditions experienced by the Midwest and South Central states.
Glick said that FERC must make sure that the results of the inquiry “don’t just sit on the shelf gathering dust like so many other reports of this kind.”
He also suggested that past reliance on voluntary guidance in response to weather-related outages had been inadequate, pointing in particular to a 2011 FERC-NERC report on cold weather outages in the Southwest.
Glick said he was “prepared, if necessary, to support the imposition of new mandatory standards to make sure that electric generators and others are better prepared when weather strikes the next time and there will be a next time.”
Climate change “is unfortunately already having a dramatic impact on our weather, be it wildfires, hurricanes or the extreme cold we’ve seen across the middle of the country. The challenges that climate change poses for the grid are only going to grow more starker and more immediate.”
He also said that Congress and the Texas state government need to rethink the state’s “go it alone approach” for much of the state’s electric grid. “Does it really make sense to isolate yourself and limit your ability to get power from neighboring regions just to keep FERC at bay? That strikes me as the proverbial cutting off your nose to spite your face.”
Kansas governor, other state officials urge FERC to launch investigation
Kansas Gov. Laura Kelly and other state officials on Feb. 19 urged FERC “to take all necessary and possible steps” to investigate the causes of system failures during the recent extreme-weather event in Kansas and protect Kansans from natural gas and electricity price surges resulting from increased demand.
Along with Kelly, Kansas Corporation Commission (KCC) Chair Andrew French, Commissioner Dwight D. Keen, and Commissioner Susan K. Duffy also signed onto the letter sent to Glick urging a federal investigation.
Specifically, Kelly and the KCC called for FERC to:
- Examine the circumstances that reduced the supply of natural gas and compromised pressures on interstate pipelines;
- Exercise its authority under Sections 4A and 23 of the Natural Gas Act and take all actions within its power to protect consumers and ensure the integrity of natural gas price indices; and
- Work with NERC to investigate whether additional reliability mechanisms are needed to respond to similar events like this in the future.
Federal lawmakers are also seeking answers related to the recent events in Texas.
In a Feb. 16 letter to Bill Magness, President and CEO of ERCOT, and DeAnn Walker, Chairman of the PUCT, a group of U.S. Representatives from Texas asked Magness and Walker to respond to a series of questions related to the outages.
Meanwhile, U.S. Sen. Tina Smith, D-Minn., has sent a letter to the Energy Department, FERC and the Commodities Futures Trading Commission “calling for federal investigations into possible price gouging of natural gas in the Midwest and other regions following severe winter storms that plunged Texas and other states into a deep freeze that caused power outages in millions of homes and businesses,” the Associated Press reported.
Effective at 10:00 p.m. Central time, Feb. 20, SPP said that it had returned to normal operations for the entire SPP balancing authority area, signaling it has enough generation to meet demand and available reserves and foresees no extreme or abnormal threats to reliability.
For its part, MISO on Feb. 19 said its MISO system was currently steady and stable with sufficient generation and transmission resources online.
A Maximum Generation Alert for the South Region was terminated at 11am ET on Feb. 19.
MISO said it would continue supporting member restoration efforts from this week’s winter weather event.
Public power utilities warn of scam activity
In the wake of the frigid temperatures and strain on the grid, a number of public power utilities warned their customers to watch out for scam activity.
Nebraska Public Power District (NPPD), which is in the SPP footprint, “is asking power customers around the state to be wary of scammers trying to take advantage of the recent winter weather and power outages,” it said on Feb. 18.
“These predatory individuals will call and state the customer’s bill must be paid immediately or the power will be shut off and will recommend several methods of payment. They may also indicate that immediate payment will keep someone from being included in emergent rotating outages. Sometimes the scammer’s caller-identification is falsified so it appears to originate from the utility company, a practice known as ‘spoofing’.”
Another Nebraska-based public power utility, Omaha Public Power District (OPPD) on Feb. 17 reported that it was beginning to learn of more customers receiving phone calls from scammers, falsely alleging their power will be shut off within 30-minutes for failure to pay their bills.
“This is a national scam. However, recent headlines about our regional power issues may have sparked the latest round of calls in our area. Utilities often see a spike in calls after severe weather or other power-related events, when customers may feel the most vulnerable,” it said.
Most of the latest calls have been automated messages left by a caller pretending to be employees. The message states power will be disconnected in a half hour if customers do not call back to settle up.
OPPD warned that these callers do not represent the utility, noting it never cold calls customers demanding payment.
CPS Energy in a Feb. 16 Facebook post noted that ERCOT had reported a scam circulating on social media asking customers to text their private account numbers.
“Please, DON’T DO IT! This info is not needed to restore your power. We’re working hard to get power back on. Thank you for your patience!,” CPS Energy said.
In Missouri, City Utilities of Springfield on Feb. 18 warned of two scams. One scam call claimed “that you’ll avoid being part of a rolling blackout by paying the caller immediately. HANG UP,” CU said in a tweet. It said customers could call it or send a direct message if they were concerned about their account status.
A second scam involved a call that appears like it is coming from the CU phone number “and the caller threatens to disconnect your service in the next 30-60 minutes if you don’t pay them immediately,” the utility said.