Senators were concerned that some generators may have anticipated the cold weather and tried to game the system for their own profit
Texas Senate News
Austin | Feb. 15, 2011 — Some power companies had not prepared their plants for extreme cold before the severe winter weather that hit Texas the first week of February, 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 a 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.
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 said the state's independent market monitor had found no evidence of fraud in the market in the days leading up to the freeze.
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.
7 comments:
Looks like the Ghost of Enron is still with us. Jacking up the price of electricity during a natural calamity is much like selling ice at $100 a bag after a hurricane. If this is legal, we need the Legislature to make a new law to prevent this crap from happening again. Actually, I thought we already had a law against highway robbery.
Electric supplies were accidentally cut to some gas plants, so they weren't able to supply additional gas needed to generate electricity.
So in other words, rather than ERCOT being part of the solution, they were in fact part of the problem.
"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."
Herein lies the wording that perpetuates the scam of our corporate welfare state. Is Luminant itself willing to pay for 100% of the costs incurred to winterize their generators - or as is so typical of crises solution scams like these, is the state "willing" to use tax dollars to fund the private sector's winterization expenditure?
After most crises we have seem lately that involve the corporate sector and government oversight, the corporate sector hates regulation but loves the government welfare handouts when their business model is ineffective or incompetent during a crisis.
Let's see if the utility companies involved in this blackout follow the corporate welfare scam model - or take complete financial responsibility for their lack of business foresight.
Since the Texas Legislature prides itself in being in the pockets of the "energy sector," it will be interesting to see how they sell the winterazation "solution" to the utility rate and tax stretched citizen.
And finally, I ask: Is ERCOT ultimately an industry staffed oversight organization? if so, I will take bets on who gets government money to fix the problem to "protect the citizenry" from further blackouts.
If one scans the article more than once, you can read between the lines numerous statements or sentences that infer corporate welfare scamming will be the outcome. It is just a matter of how much money they get.
I thought the risk would be less each year since Al Gore said that the world is heating up, or did I misunderstand the great prevaricator? If it happens again, send Al the bill.
At least the global warming scientists are willing to admit it is only part of the larger climate change scenario. The polar ice caps are melting, making the currents and weather more extreme -as in colder weather.
Only cynical fools can't tell the difference.
If you think Al Gore is right about anything you must be smoking some Whackty Tabacky. I’d rather be a Cynical Fool than an empty headed Liberal Sheeple. When it was proven that the earth is not warming up you clowns renamed your cause from Global Warming to Climate Change, how convinent! Did you really think we wouldn't notice? Nobody is buying what you are selling any more.
To Anonymous Feb. 18, 5:46 PM:
TV and newspapers have started
saying "climate change" instead
of "global warming" in an effort
not to confuse people like you.
Because the climate IS changing --
not only that the temperature IS
rising at times. (Can you think of
any other explanation for the melting of icebergs and glaciers?)
When a bubba says -- when it's
very cold on a winter day --,
"Don't tell me there's global
warming. How come it's so cold
today? Yuk, yuk!" then we know it's time to refer to "climate
change" instead of to "global
warming."
For an explanation of why the
temperatures will, at various times, be both hotter AND colder
than usual, google "world climate
change" and pick out the easiest
explanation you can find. If even
that info can't penetrate your
skull, I don't know what else to
suggest.
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