Apr 26, 2021
In mid-February 2021, a not-as-rare-as-it-used-to-be winter storm swept across the country, causing massive power outages in the state of Texas with deadly consequences. In this episode, hear the highlights of the congressional investigation into the causes of the extended power outages. They were foreseeable, and in fact foreseen, and similar power outages can be prevented; the only question is whether they will be.
Executive Producer: Shelley Stracener
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35:45 Cathy McMorris Rodgers: Recent trends show a transition away from coal and nuclear power plants designed to function as baseload capacity toward variable renewable energy sources with just in time natural gas backup. States like California that rely more on weather dependent renewables experienced energy failures on a regular basis. Indeed, California residents experienced blackouts on an ongoing annual basis as the state fails to manage summer electricity demand and wildfire risk. These events suggest that replacing nuclear plants with variable renewable energy sources could make energy grids less resilient. Policies that drive renewables at the expense of firm baseload put lives at risk.
49:09 Bill Magness: Let me give you a bit of background to explain ERCOT's role in the provision of electric power in Texas. We manage the flow of electric power to more than 26 million Texas customers. That's about 90% of the state's electric load and about 75% of the landmass of Texas, ERCOT does not own power plants. We do not own poles and wires. We are the grid operator, like air traffic control for the grid. We're also the settlement agent for the market. We do the bookkeeping and billing, we don't participate in the financial side of our market. Our number one job is to see that supply and demand on the grid are in balance at all times. As the independent system operator for the region, ERCOT schedules power on an electric grid that connects more than 46,500 miles of transmission lines and over 680 generating units. It also performs financial settlement for the competitive wholesale bulk power market and administers retail switching for 8 million premises in the competitive areas in ERCOT. We're a membership based 501 c four nonprofit corporation governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature. Our members include consumers, cooperatives, generators, power marketers, retail electric providers, and best droned electric utilities, transmission and distribution providers and municipally owned electric utilities. ERCOT's not a policymaking body. We implement the policies adopted by the Public Utility Commission and the Texas Legislature and we operate under reliability rules adopted by the North American Electric Reliability corporation or NERC. Generators produce power from a variety of sources in ERCOT such as gas, coal, wind, solar and nuclear. These are private and public entities subject to regulation by various state and federal agencies. Transmission and distribution providers own the wires and transport the power to consumers subject to their own sets of federal and state regulations. 24 hours a day, seven days a week ERCOT monitors the entirety of the system to make sure that when transmission lines go down, we can work around them. We talk to generators instructing them to bring load onto the system or to back it down as needed. We oversee the scheduling of maintenance and more. The work is done with one purpose to maintain the 60 hertz frequency that's needed to ensure the stability of the grid. There's a constant balancing act to manage the supply and demand to ensure a stable frequency. During the week of February 15, the Texas electric market experienced more demand than available supply. At its worst the storm took out 48.6% of the generation available to ERCOT to balance the grid. We always keep reserves, but when you lose nearly half your generation, you're going to have a problem. And supply quickly diminished the frequency of the grid dipped perilously low. Many generators stayed off for days and this led the system unable to serve that high demand. We use the last tool in our toolkit. Planned outages. Calling for load shed to manage the stability of the grid. This crisis required are caught using procedures established for emergencies like this to call on Transmission providers to use control load shedding to balance the system and prevent a devastating blackout for the entire grid. avoiding a complete blackout is critical. Were to occur, the Texas grid could be down for several days or weeks while the damage to the electrical grid was repaired and the power restored in a phased and highly controlled process. The cost of restoration of the system. The economic loss for Texas and the personal costs of the well being of Texas citizens would be unfathomable. as terrible as the consequences of the controlled outages in February were if we had not felt the blackout power could have been out for over 90% of Texans for weeks. The steps we took were difficult, but they had to be taken and when power was able to be fully restored. The Texas electric delivery system immediately returned to its pre emergency conditions.
57:36 Christi Craddick: As the storm sat over Texas wind, solar, coal, nuclear oil and natural gas all experienced challenges. Through numerous conversations with the oil and gas industry and operators, we learned of frozen roadways preventing crews from accessing the fields. But the number one problem we heard reported from operators was a lack of power at their production sites. As outages spread across the state operators were unable to keep their systems functioning as power was cut. Some operators did need to preemptively shut in their wells for safety and well integrity purposes prior to the storm, beginning as early as February 9. Starting on Tuesday, February 16, as it was safe to return to the oilfield, crews arrived to find that their facilities were experiencing electricity outages. The oil fields simply cannot run without power, making electricity the best winterization tool.
59:13 Christi Craddick: For just one moment, I'd like to highlight the overall success of our LDC's our local distribution companies. They are the companies that provide gas directly to residential customers. If you have a gas powered stove, fireplace, furnace heat, you're an LDC customer. As millions of homes lost electricity in Texas, only 2,153 LDC customers experienced service disruption. That means that 99.95% of all customers did not lose gas. 4.6 million households in Texas utilize natural gas in their homes representing about 13 million Texans and these families were able to continue to heat their homes.
1:11:19 Rep. Diana DeGette (CO): ERCOT has stated publicly that the recent extreme weather in Texas, 'caused many generating units across fuel types to trip offline and become unavailable.' Isn't it true that during the extreme weather event, natural gas, wind, coal, solar and even nuclear power were forced offline? Bill Magness: Yes, Chairman, we did see periods of time where each one of those types of generation flipped offline. Rep. Diana DeGette: And as devastating as this was, I guess a lot of people who are surprised because, Mayor, you were in the Texas legislature for more than 25 years. And you said in your written testimony, the magnitude, and also today, that magnitude of damages was foreseeable, and preventable. The Texas grid must be designed with the full appreciation that climate change is real and extreme weather events can occur with throughout the year. Is it your view that Texas ignored these warnings, and missed several opportunities to fortify the grid against the threat of extreme weather? Sylvester Turner: Madam chair? The answer is yes. I was in the legislature when the winter storm occurred in 2011. In fact, I found House Bill 1986. That's specifically what mandated the Public Utility Commission to have ERCOT have a sufficient reserve to prevent blackouts. That was in 2011. Rep. Diana DeGette: Mr. Rob, I understand that NERC has issued a series of recommendations in recent years warning about reliability risk to the Texas grid, including after this same storm that hit Texas in 2011. Now, I know nurse inquiry is ongoing, but based on the information you have, did Texas winterize its power infrastructure to the degree NERC had recommended after the 2011 storm? Jim Robb: Well, the inquiry will affirm this but evidence was just absolutely not. Rep. Diana DeGette: Absolutely not.
1:14:05 Sylvester Turner: I will tell you we're not just relying on generators. We had a number of generators go under in wastewater treatment facilities. When the grid failed, some of those generators didn't kick in. What we are doing now is looking at piloting micro grids that actually tie into the Texas grid. And they are always on, they never turn off. They're on 24 seven. And so we're looking at power utilizing that for our key infrastructure projects with it for city facilities as well as in low income communities in the city.
1:15:03 Jim Robb: But the key to integrating large amounts of renewable resources is the balancing resource that that picks up generation when the renewable resources can't perform because of weather conditions or what have you. And today, the only real resource we have that can do that would either be hydro, as was mentioned earlier, or natural gas. And natural gas of those fuels is the most easily transported to to where it's needed. So gas is the answer to making this transition work.
1:17:36 Michael Shellenberger: I just will also mention I this talk and this idea that there is some inevitability to a transition towards variable renewable energy sources is incorrect. It is not shared by most energy experts. It is a consequence of policy choices. And if we want to have affordable, reliable, resilient electricity sources, we need reliable sources of electricity produced in large, efficient power plants, whether nuclear natural gas or coal.
1:33:06 Jim Robb: The report that we put out in 2011, called for very clear freeze protection on the generating plants and raised the issue as to whether that should extend into the natural gas supply as well. And what I understand Texas did was to put in place legislation that required weatherization, but not to a specific level. And it was not aggressively enforced standard. I think it was spot checked. And, and enforcement against that was relatively modest is my understanding. Why we're... No, I think that's one of the reasons why after the 2018 event, we concluded that we needed to move to a mandatory freeze protection standard for equipment and to have that be monitored and enforced by us.
1:50:24 Michael Shellenberger: If we're going to shut down all of our nuclear plants which are 20% of our electricity, and we better keep our coal plants around, and I say this is somebody that has long advocated the transition from coal to natural gas and nuclear.
1:58:32 Christi Craddick: I believe that transmission pipes are in the ground and that's natural insulation, where we do have some challenges when you had the electric TriCity roll off into fields and across the state than we did our problems with compressors that are electric compressors and or natural gas compressors. Like you can't move stuff in a pipe if you've got an up compressor without electricity. So but the pipes themselves did not freeze and I think that's been a mis communication across the board when you've looked at the press communication
2:04:12 Michael Shellenberger: Civilization depends on reliable electricity. I think everybody agrees with that. But then you need to people need to explain how it is that variable renewable energy sources which are weather dependent, are somehow add up to being reliable and resilient at grid levels they don't, that actually just adds up to less reliability and less resilience, all else being equal.
3:02:55 Rep. Marc Veasey (TX): We also know that many natural gas producers and processors failed to file the necessary paperwork with the electric utility to be listed as critical infrastructure. That meant that when we have rolling blackouts, and when they were initiated, these natural gas companies didn't have the electricity necessary to pull gas from underground, which in turn led to a natural gas shortage of power plants and created a downward spiral of more blackouts. Right now, it's optional for these companies to file this paperwork, but Charlie Garin also from Fort Worth, he has a bill, Commissioner Craddick, that he is going to file that will answer some of these concerns that I just laid out. And I want to ask you, Commissioner Craddick should ease energy producers, who we all know are critical to keep the lights on. So we won't have a repeat of what we saw, should they be required to file this paperwork? And should it be included on the electric utilities critical list? Christi Craddick: I think it's an important piece that frankly, my agency hadn't been communicated from ERCOT that this existed, but to if you look at for these forums, and the second the the time when we finally realize this form existed, because it was based on summertime, not winter time. But when we realized that we've now sent it from our agency sent a letter to every single operator that we regulate, suggesting that they file this form, but youdon't think it should be required.The challenge we still have though, is ERCOT today doesn't prioritize gas fields. It's only gas processing plants for it, so we'd like to encourage ERCOT to remap the system and understand that the the whole system needs to be included not just part because we had operators who told us they would have been happy to file the form had one, they known about it and two, had have been included in the form and they were not.
11:51 Jim Robb: There are three major trends which are fundamentally transforming the bulk power system and challenging our historic reliability paradigms. First, the system is decarbonizing rapidly and this evolution is altering the operational characteristics of the grid. policies, economics and market designs are resulting in significant retirements of traditional generation, new investment is increasingly focused on developing carbon free generation with variable production profiles. And in this resource mix, natural gas fired generation is becoming ever more critical, both for both energy to serve load and balancing energy to support the integration of these variable resources. Second, the grid is becoming more distributed. The improved economics of solar is a key example. These smaller scale resources have been deployed on both the bulk electric as well as distribution systems and in many cases reside behind the meter. And third, the system is becoming increasingly digitized through smart meters and digital control systems. These investments greatly enhanced the operational awareness and efficiency of grid operators, but at the same time, it heightens our exposure to cybersecurity risk.
12:59 Jim Robb: Our reliability assessments are one important way we evaluate the performance of the grid, identify reliability trends, anticipate challenges, and provide a technical platform for important policy discussion. With growing reliance on variable and just in time resources, we are developing more advanced ways to study energy supply risk. Our assessments consistently have identified three regions of the country, particularly exposed to these dynamics: California, Texas and New England. Last August, a massive heat wave across the west caused an energy supply shortage in California in the early evening, solar energy was ramping down and the grid operator was unable to import power as planned. due to high demand throughout the West, Cal ISO was forced to cut power to approximately 800,000 customers. Among the lessons learned from this event are one the critical need for reliable ramping resources to balance load, and second, the need for improved ways to estimate resource availability when the system is under stress. In New England, cold weather exacerbates its dependence on limited pipeline capacity and a handful of critical fuel assets. An early January coldsnap in 2018, led to natural gas shortages and fuel oil was burned to preserve reliability. Had that coldsnap not abated when it did. The fuel oil inventory would eventually be exhausted, and I assume New England almost certainly would have needed to shed load. It was a classic near miss event. Insufficient and inadequate weatherization of generation in Texas in the middle South states has been a growing concern for us since 2012. After a cold weather event caused loadshedding for 3 million customers in Texas in 2011. We developed a winter preparation guideline to focus industry on best practices and started conducting significant outreach on winter preparedness. Following additional extremes and unplanned load shedding in that region in 2018. We concluded that these events could no longer be treated as rare, and that a mandatory approach was warranted. As a result, nerf began the process of adding mandatory weatherization requirements into our reliability standards.
15:00 Jim Robb: First, more investment in transmission and natural gas infrastructure is required to improve the resilience of the electric grid. Increased utility scale wind and solar will require new transmission to get power to load centers. Next, the regulatory structure and oversight of natural gas supply for the purposes of electric generation needs to be rethought. The natural gas system was not built and operated with electric reliability. First in mind, policy action and legislation will likely be needed to assure reliable fuel supply for electric generation. As the critical balancing resource natural gas is the fuel that keeps the lights on. Third, the electric and natural gas systems must be better prepared for extreme weather conditions which are frankly becoming more routine. Regulatory and market structures need to support this planning and the necessary investment to assure reliability. And finally, investment in energy storage or alternative technologies needs to be supported to have a viable alternative to natural gas for balancing variable resources. A technology which can be deployed cost effectively and at massive scale with adequate duration to deal with supply disruption lasting for days rather than hours is required.
19:13 Mark A. Gabriel: First, every former generation can be disrupted by extreme temperatures. Second, a competitive market can discourage long term capital investment in reliability and resilience measures. And finally, costs move in both directions in competitive markets, and electricity will flow often times at impractical prices.
21:07 Mark A. Gabriel: In conclusion, power and gas markets in the United States are marvelously efficient at driving out inefficient, generating huge units, increasing financial liquidity and expanding the sale of electricity. However, the real question is whether electricity and to a lesser extent natural gas are logical commodities to participate in open markets. Unlike pork bellies and orange juice trading electrons has consequences far greater than the availability of bacon or a morning refreshment.
23:25 Pat Wood: Today I'm CEO of the hunt energy network. We're building storage batteries, small batteries at the distribution level around the state of Texas. I think the role of energy storage in the future is going to be one that will be just nowhere to go but up. As we bring on intermittent resources, understand the members concerns and lived through them as well with intermittent resources or variable resources that we've got to do something to firm those up. Storage is that golden bullet that as a regulator, I didn't have 15-20 years ago, and we were talking through market issues across from California to New England. But storage is just beginning. It's got to scale up but it's a pretty interesting place to be.
46:00 Sen. John Barrasso (WY): You've written and you see, 'California is big bet on renewables and shunning of natural gas and nuclear is directly responsible for the state's blackouts and high electricity prices.' Could you expand upon your comments for the committee? Michael D. Shellenberger: Well, sure, there was a root cause analysis published by the California Public Utilities Commission, the California Energy Commission, and the California grid operator Kaiso, which made a very similar point though, in a more muted fashion. That point was made very dramatically in the midst of the crisis last August in a conference call with reporters, where the grid operator specifically pointed to the closure of San Onofre nuclear power plant, which was about 2200 megawatts of power, as well as the closure of natural gas plants as the really the main factors that resulted in the shortage of energy.
46:49 Sen. John Barrasso (WY): You know, you've written a bit and you said, quote, have some have long pointed to batteries is the way to integrate unreliable renewables onto the grid. However, that batteries you say are simply not up to the task today and you went on to explain indeed for renewables to work batteries would need to be able to store the power for weeks, and perhaps even months. Can you expand upon the comments for the committee? Michael D. Shellenberger: Sure. Well, we have one of the largest battery installations in the world in Escondido, California, and it provides power for 16,000 Californians for about four hours. There's almost 40 million Californians, the cost is prohibitive prohibitively high and in fact, most advocates of renewables now, no longer think that lithium batteries are going to be an important form of storage beyond you know, managing minutes or hours.
52:38 Mark A. Gabriel: I think what we also have to look at and understand is how can we use the existing transmission system differently. For example, there are seven ties between the eastern and western grid that are perfect examples of 1980s technology, which could clearly be upgraded and quite frankly, could be done within a two to four year timeframe. So we'd have some immediate benefit there.
59:47 Mark A. Gabriel: Gotta consider in the United States only 3% of the 90,000 dams have power capabilities to them. And if anything, I think it's a it's a valuable discussion to have to make sure that we are thinking about increasing hydro power, as it is a carbon free resource, and one that can help bolster a grid in times of great stress.
1:02:08 Sen. Martin Heinrich (NM): Coal has become completely unaffordable as a power source. If you look at Lazard or any of the independent analysis of what wholesale costs are for various different generations, and you have solar at three to four cents a kilowatt and wind at three to five cents a kilowatt, and then you have coal at 7 to 16 cents a kilowatt, or nuclear at 13 to 20 cents a kilowatt, you understand what some of the market pressures are here, and why we're being asked for example, to subsidize nuclear power.
1:03:00 Sen. Martin Heinrich (NM): I'd ask what policies you think would be wise to accelerate the deployment of the storage that you mentioned, on the grid both in Texas and nationally? Pat Wood: Well, I think getting a diversity of supply chain, we clearly are dependent on China and a few other countries in East Asia for the current technologies that I think Mr. Shallenberger pointed out correctly, that there are a lot of things other than lithium ions, but those are what are in all the EV's and in certainly all the storage technology. So the cost upstream if there could be some American or at least North American European suppliers to that. The policies in the US make it easy make it as easy to interconnect a battery as we've made it to connect gas plants and windmills. Yeah, we're of course version 1.0 talking with our utilities. We haven't done it before, but it's it's not easy. Learning to get these things done one by one. I think the market policies in most of the organized markets are very friendly to battery so I think we've got that box checked. Sen. Martin Heinrich (NM): So interconnection is really a big... Pat Wood: Interconnection is important.
1:04:40 Sen. Martin Heinrich (NM): Would it have been helpful for Texas to be able to import power either from the east or the west? In this recent episode, because I noticed that El Paso power for example, El Paso didn't have the same rolling blackouts because they were able to pull from the western grid. Pat Wood: And they are directly interconnected with it. We do have some gates in the wall. Sen. Martin Heinrich (NM): Yes, you have DC connections. But if you don't have direct connections? Pat Wood: Correct, that's right. And there actually are proposals to put more of the DC ties in both east and west. To be honest, a few gigawatts wouldn't wouldn't hurt. But it wouldn't have saved us from really what was a 20 gigawatt short shortfall at the... Sen. Martin Heinrich (NM): What was the single largest shortfall from which generation source? If you look at it Pat Wood: Well, our largest supplier on a normal day is gas. So the impact of gas dropping both at the supply level and then at the power plant level. That's that's the interesting thing to figure out is how much was related to the lack of winterization, which we should have learned from the 2011 experience, how much was done from that, and how much actually had to do with the supply system or the upstream issues from the gas wells all the way down to the power plant.
1:23:15 Sen. James Lankford (OK): Natural gas is quick to be able to turn on. But when you're not asked for much for a long period of time, and then suddenly you ask for a lot in a short period of time, especially an extremely cold weather event, then suddenly it's like, you know what, we can't turn it all on that fast that much. Is there a tipping point that you're seeing for providing other fuels that are out there that for instance, were 40, 50, 60% renewables and you've got a very small portfolio of natural gas, and then the wind stops blowing, and it's a cloudy day, and you suddenly don't have those. And he asked natural gas to turn on 50% suddenly, that's just not realistic, because what is upstream is not able to turn on that fast. Is that a realistic conversation? Jim Robb: I think that's that is the conversation that needs to take place. Natural gas plants are the most flexible that we have in the system to accommodate the variability that we see with large amounts of variable resources. And it is a real challenge for the natural gas industry to provide that kind of capacity that quickly. It's not designed to do that. But that's what the electric industry needs. And this is the question that I think policymakers and probably legislators are going to have to tackle which is how do we create a construct for natural gas to be able to serve these very unique needs of the electric system for which it's not designed to do
1:35:40 Sen. Roger Marshall (KS): How could Burke investigate if there was anything nefarious, what does that process look like? And I'm not saying there is. I'm just it just hard for me to imagine just prices going up exponentially. And again, I think of that, you know, my parents on a fixed income, what's happening to their electric bill and their heating bill coming up? Right now was well, how would Burke investigate this? Pat Wood: NERC does have authority over market manipulation, or just markets in general in the interstate markets, of course, interstate natural gas pipeline serve Kansas, Oklahoma and parts of Texas as well. We have an interest state that separate but the Commodities Futures Trading Commission, they were certainly involved with us 20 years ago, when we unpacked the issues in the California crisis. The state attorneys general, as I mentioned, the one in Texas is already investigating this issue. Those three, three camps for CFTC. For the futures foryour experiences, that takes decades to go through,well, no, it doesn't. I mean, you can unpack in this digitized age. We have a lot more capability that in 2021 than we did in 2001 to review trades in this matter or in any matter much more expeditious.
1:37:40 Sen. Angus King (ME): Can you tell us unequivocally that wind turbines did not cause the problem in Texas? Pat Wood: They did not cause the problem, they were honestly the only thing was like gas and coal and everywhere. Sen. Angus King (ME): So every... Pat Wood: Everything could have helped solve it more faster. But you know, when was slow to get back, and so was coal and so was gas.Sen. Angus King (ME): And I want to mention that the wind project that I worked on in Maine has been online in 10 years in Maine. And it's never been down because of the cold that I know of it was a question of they're not weatherizing their entire turbine. So there's nothing intrinsic in the wind power that can't survive cold weather.
1:40:25 Manu Asthana: But I think the the really exciting part of electric vehicles and PJM did a study with the University of Delaware on vehicle to grid. We actually piloted having vehicles provide regulation services off of their batteries. And, you know, people were able to earn $100 a month in the pilot, so I think there's a lot of capability that will come to the grid that hopefully can add resilience through EV's as well.
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