Thread by @douglewinenergy

Hey #energytwitter, if you want to tune in to the Senate and House hearings on the #TexasBlackout, links are in next tweet. I'll tweet on it throughout the day on this thread.

Please tweet using #txlege and #txenergy, esp. if you have relevent info that could help going forward

Joint hearing House Energy Resources and State Affairs house.texas.gov/video-audio/

Senate Business & Commerce
senate.texas.gov/av-live.php

First witness in Senate is Bob Rose, meteorologist with @LCRA #txlege #txenergy

In the House @AnaHdzTx tearfully remembers a family that died during the crisis. Amid all the talk about megawatts, we must remember this is about people.

#txlege

Can I just say it is insane these hearings are happening at the same time. #txlege

Lots of talk from Bob Rose, LCRA meteorologist of stratospheric warming but no mention yet of #climatechange. Need to have @judah47, leading researcher on extreme cold and climate change, at future hearings. #txlege #txclimate

Curt Morgan, CEO of @VistraCorp, leads off in the House. Very interested to hear what he says or doesn't say about $ money made last week. Also will look for anything different said to legislators vs. stock analysts on earnings call tomorrow. investor.vistracorp.com/investor-relat…

Morgan says he felt there was lack of urgency from state officials in days and hours leading up the crisis. #txlege

Morgan talking about market design. Suggests might need to move to capacity market. Vistra pushed hard for this back in 2011-12

Morgan alks about the interdependence of gas and electric systems and how coordination has to be better. +1 on that. #txenergy

On February 7, Bob Rose, @LCRA metereologist says there were clear signs that this was going to be extraordinary. By Wednesday (Feb 10) I was telling people it would be pipe busting cold that will take a whole extra amount of protection. This was 5-7 days out. #txlege

@NRGMauricio now speaking in House. Starts off with: We all failed. We must do better.

I respect those that accept responsibility. We should all do this. We all play a role.

He is CEO of @nrgenergy

Chairman Hancock says he doesn't want to get into a #climatechange discussion at this point. It's sad people still view this as political. It's not. The climate is changing and you will be impacted regardless of your beliefs or political affiliation.

In fact, even @tedcruz acknowledges the climate is changing. He wrongly doesn't attribute it to human causes but he doesn't deny it's changing.

@nrgenergy did not perform as well as CEO @NRGMauricio would have liked.

STP 1 (nuke), Parish 5 and 7 (coal) had outages. Brought coal plants back after 24 hours. Limestone 2 (another coal plant I think) also out for a time.

Chairman @chrispaddie asks how much of the problem was lack of weatherization.

@VistraCorp Morgan says wholesale costs will not be passed through to customers. True, customers won't literally pay $9kWh but without government action, I don't see how this doesn't make its way to customers eventually.

For the gas system, half was due to gas pressure, half winterization according to Vistra CEO Morgan.

They had issues with coal. Mining from Oak Grove was problematic because rail froze. It got wet while transporting and then froze.

#txenergy #txlege

According to Morgan, 90% of gas plants were available but we "couldn't get the gas."

This is a big deal.

note: (my words not Morgan's): switch to a capacity market would not fix this!!!

"If the gas system is compromised, the power system will be compromised." -@NRGMauricio

This has been a major focus of CEO Morgan and Gutierrez from Vistra and NRG.

Magness CEO @ERCOT_ISO up in Senate.

The frequency issues were significant too. Gutierrez suggests frequency instability may have caused one or more plants to trip off. Doesn't say that definitively, unless i misheard.

Curt Morgan says they weren't getting coal supplies to at least one of their plant. And were getting "further into the pile" to lower quality coal. (More pollution, less power)

Chairman @chrispaddie spot on: it's a systems problem, not just a grid problem. (I'm paraphrasing)

Morgan says they nearly lost Comanche Peak (one of 2 nukes in the state, Vistra has Comanche, NRG has South Texas Project with CPS and Austin Energy) due to frequency problems.

That's 2500MW more of gen nearly lost.

Bill Magness talks about how the peak was going to break the 74, 820MW peak set in summer 2019. Prior to all this winter record was around 65,000.

This. is. made. worse. by. inefficient. buildings.

Texas is dead last on #energyefficiency

Buildings are part of the solution!!!

Back in the House. Morgan talks about TERC. He's not even totally sure what it stands for which telling.

"They did not address the issues I raised about deliverability of gas, etc. in any serious way."

TERC is the main body responsible for coordinating grid and gas systems.

If I'm wrong about this- or any of this- please lmk. Trying to learn, hopefully like everyone involved.

In the Senate, ERCOT CEO Magness explaining this chart

https://twitter.com/BPBartholomew/status/1364640537119232000?s=20

Discussion of reserve margins from Curt Morgan. Says reserve margin needs to be higher as renewables increase. Interested in thoughts from the #energytwitter experts out there. "It's a debate we need to have. there's ways to get that reserve and keep the competitive market"

Magness talking about ERCOT's #demandresponse and responsive reserve now.

Hancock says to ERCOT CEO: "when you say come on, it's not come on wind or come on solar." Magness agrees.

But they can turn off demand through voluntarily #demandresponse programs. But ERCOT has capped Emergency Response Service at only $50m/year.

Why?!?!

And the supply side resources for responsive reserve are mostly gas. And as we know there were massive gas supply problems.

That was a bizarre line of questioning where the Chair was clearly leading the witness to bash wind and solar. Mixing apples and oranges. If we're talking about responsive reserves, which Magness was: Wind and solar don't commit to be responsive reserves.

Rep. @toddahunter asks who turned off the power. Why were some off and some on? That's the TDUs (transmission and distribution utilities) says @NRGMauricio.

this is important. They've got to segment their distribution grids better. That is a takeaway from this. #txlege

"Those protocols ought to be published." says Curt Mogan.

YES!!! Distribution system transparency. Many have called for this for a long time.

@toddahunter says the utilities have done an awful job.

Rep. @toddahunter extremely angry about Public Utility Commission.

Hunter wants witnesses to assign blame.

Responding to @DrewDarbyTX, Curt Morgan says a number of generators will be damaged by this. The increased volatility exists in the financial markets too and that's going to be an issue after the event. #txenergy

.@DrewDarbyTX continues: what i'm looking for is the ability to communicate across all these agencies.

I'd point out here that most Governors have an office of energy to perform exactly those functions. Not sure why we don't here in Texas #txlege

This is being discussed now in the Senate. Magness said there should have been no under frequency trips because they didn't stay below 59.4Hz for 9 minutes.

Sen. Schwertner tells him NRG (and maybe Vistra) are saying underfrequency did cause plants to trip. #txlege

@RafaelAnchia begins his questioning. He's been a leader on #txenergy issues in #txlege for over a decade. Filed bills on #energyefficiency #demandresponse and #climatechange.

He understand these issues deeply.

@RafaelAnchia begins by focusing on the @PUCTX. He says they bear responsibility here. It's a public entity. Says he "anxiously awaits their arrival."

Shares @toddahunter's frustration at lack of communication from the Public Utility Commission.

#txlege #txenergy

@NathanForTexas speaking in Senate. Also great on these issues. Saying again how ridiculous it is these are simultaneous. I'll stay with House for now.

. @RafaelAnchia points out that @PUCTX and @ERCOT_ISO are intertwined.

The PUCT are the hand picked team by the Governor, Anchia says. Public heard a ton about ERCOT, very little about PUCT.

Anchia says there is a technical asymmetry here. Echoes of @leahstokes Read Short Circuiting Climate Policy folks!!

The efficiency of the market has pushed out older power plants, Anchia says. Very little new thermal capacity built in recent years.

@NRGMauricio says that is correct, much of it has been replaced by renewables

One of few thermal plants to come on in last ten yrs went bankrupt

Did the gas traders walk away with the bags of money in the end? Anchia asks.

I think there was a significant amount of wealth transfer that went on from power to gas. @VistraCorp CEO tells @RafaelAnchia #energytwitter #txenergy #txlege

We've increased volatility says Morgan. Even added to that with Operating Reserve Demand Curve. Volatility in other markets is lower.

You could have lost a lot as a generator if you're gas hedge didn't deliver.

"We're eating that." Not passing it on to customers he says.

@NRGMauricio says developers look at futures markets. They deploy capital based on that, not the real time market.

We don't see the extreme prices benefiting our plants.

As you consider the market architecture, you have to decide on design that will deliver reliability

I could be reading too much into this, but sure sounds to me like these two big generators, at least, will push for a capacity market.

@NRGMauricio says he disagrees with @WSJ that dereg cost customers billions more than customers in regulation. Says they don't understand the difference between T&D which has gone up, and retail/gen component which has gone down.

Again, would love to hear #energytwitter experts

Curt Morgan says he lives in Southern company territory. Service is "not that great." We compete here, he says. Touts green choice plans: I'd caution consumers. @VistraCorp and @nrgenergy are heavy on fossil and if they offer 100% renewable, it's probably not. (It's complicated)

We're 2h45m into this. First witnesses still up in House. Second witness in the Senate. #txlege

Tom Craddick says @VistraCorp and @nrgenergy want to "blame the gas industry."

Asks how many plants were down due to routine manufacturing?

@VistraCorp We had 1000 MW out of 18500 that was out during the event.

Craddick: do you have firm contracts for gas?

Morgan: we have some. For most of the plants, we did. I didn't try to blame the gas industry. It's irrefutable that the pressure on the gas system caused problems. I'm not passing judgement. It's a fact.

#txenergy #txlege

Morgan to Craddick: We got cut on firm contracts for force majeure. That's probably going to be litigated. You're drawing much too simple a picture. I'm happy to share.

#energytwitter

Craddick asks if they withheld power till prices hit the cap. Morgan said absolutely not. that's false. Says there's an insuation there.

Yeesh.

Craddick says you're going to pass these costs on.

Both CEOs say absolutely not.

Craddick says, well I apologize.

This is interesting. These costs will flow to customers eventually. The CEOs, I think, are saying they won't bill them real time prices like @gogriddy.

This needs more questioning and analysis.

@Menendez4Texas questioning Magness in the Senate. Also a legislator who has worked to address critical energy and climate issues. filed #climateadaptation bill last session, solar bills in the past, too. #txlege #txenergy

@RepRaymondTX questioning in the House. Another member who has spent significant time on utility issues, solar, etc. #txlege

https://twitter.com/TexasHDC/status/1364997235486826496?s=20

@Menendez4Texas asking if there's a way to turn off exterior flood lights and office buildings if they're not being used.

Magness says that's up to distribution utilities.

Menendez asks about #demandresponse programs. Magness says there is a program

It's called Emergency Response Service. They do a hotline call and tell the customers who signed up for the program to shed load.

@Menendez4Texas wants to know if we could expand that program. Says he'd like to explore that moving forward.

#demandresponse #txlege #txenergy

Back in the House, @EddieLucioIII says @nrgenergy @txuenergy @reliantenergy failed at communication. Shows tweets and press releases to show that they didn't communicate well.

Clearly, all parties involved failed in this. No one knew there was the potential for this to go days.

@willmetcalfTX brings up boy who died in Conroe. Let's never forget Christian Pavon. Devastating loss.

khou.com/article/weathe…

Brief discussion of #electrification. @NRGMauricio says more of it is coming (#EVs, computing/AI, etc.) and we must have a system that's more resilient for it.

Magness says: The @PUCTX adopts the policy. We implement it.

this is a key point.

Also says: We aren't regulated by @FERC for markets but we are reguated by NERC for reliability.

#txlege #txenergy

Asked by Sen. Creighton do you believe our market construct is adequate?

Magness said he doesn't have a position. that's a policy decision.

Creighton: This is not a chamber of commerce meeting. This is a train wreck. The largest in the history of deregulated energy

Creighton: should we change the market? What is your direct advice for market construct?

We all have to look at every aspect. Things have to change. Respectfully, he sayd, I don't know. Everything should be on the table.

#txlege #txenergy

Creighton: will you personally make recommendations or merely implementing.

Magness: Decisions about the market will be made at @PUCTX.

Do you believe we should have a capacity market?

I'm not sure. I don't know a capacity market helps us with a cold spell like that.

Creighton: sounds like that answer is a no unless you're compelled to think differently.

Magness: We don't generally take positions on things the @PUCTX governs.

Creighton asks him to take a position, to have an opinion. Wants to hear it.

Back over to the House @DonnaHowardTX questioning now. Another leader in the House.

@NRGMauricio can give guidance on levels of capacity and reserve margin that is required. From there, it depends what is the market architecture that gives us the reliability standard.

tweet above, he said legislature can give guidance, missed a word.

@NRGMauricio says we need to entire the entire system. This is right. The root cause analysis will inform what we need to do. also right. Can't prescribe a cure without a diagnosis.

Gutierrez says 50% of our generation is gas. do we need more fuel diversity?

Morgan picks up and says you could drop the price cap and increase reserve margin. The ORDC was a construct, not pure energy pricing. The pure pricing was not delivering reserve margin.

Back in the Seante, Magness said they were expecting about 3-5GW, it bounced around in that range sometimes 3 sometimes 4

Sen Paxton asked if ERCOT plans to move generation from gas to wind and solar.

Magness says no, we don't do that. Generators make those decisions, not us.

Chairman Hancock asks Sen Paxton to stop asking about renewables just like he asked Sen Whitmire to stop asking about climate change. Said he wants to focus on the events of last week. Interesting.

#txlege #txenergy

@NRGMauricio asked by Rep. Shaheen about resource mix.

We rely on natural gas for 50% of the system and we had problems with gas.

We need to look at the total mix, all sources and get more diversification. the more diverse, the more resilient.

@NRGMauricio says batteries are coming and those will help. Won't solve all the problems but will help. Says dual fuel capabilities could also help during emergencies. #txenergy #txlege

Rep. Harless asks if the 20% cap on generation is a problem. Curt Morgan of @VistraCorp says he's looked at mergers that would have put them above the 20%. Says they'd be supportive of raising the cap. Rep. Harless says we should look at that. Watch this space. More market power

Rep. Harless: everyone needs to work on the communication. He's absolutely right.

I hope he'll question the distribution utilities on how they segment their distribution grid to better control blackouts.

Morgan: I was a big proponent of this market, my faith was shaken. We let everyone down. The one things we can't do is not have the energy we need. I thought this was the best market but it didn't work in this situation. We've got to revisit it.

Chairman Paddie in the House asks about "repricing." Basically retroactively reducing the 9k/MWh price and bringing it down to 5k or 6k.

Understandably and predictably, CEO Morgan says it would be a bad idea. Again, says we're absorbing this and not passing on to customers.

Morgan adds you coudl change it proactively but retrospectively would be a bad idea.

Chairman says the number doesn't matter if you can's get the supply. In force majeure situations, doesn't matter how high it is. You can't run.

@NRGMauricio agrees but says those prices...

inform forward markets and investment decisions.

Chairman Paddie, I think, is questioning the @PUCTX decision to raise the prices from $1k to $9k on Monday evening during the outages. I'm sure he'll question Chair Walker on this. #TXEnergy

Chairman @chrispaddie says we build the system for the summer. and peak usually lasts for a few hours, not 90. Should @ERCOT_ISO change how they model?

Great question!! The answer: YES!

#txenergy #txlege

@NRGMauricio says given #climatechange extremes, yes we need to revise models.

CEO of @VistraCorp says "I agree." We don't look at 20 year averages, we look at 5. Because extreme weather is increasing.

This is why the Senate needs to consider this too! #txclimate #txlege

Rep. @ronereynolds Do you believe state of Texas should look at impacts of climate change?

@NRGMauricio We're all seeing the impacts whether Harvey or the winter storm. We need to look at extreme weather in a different light.

Reynolds: I've served on Env Regs and we haven't had a hearing on #climatechange. Do you believe we have a responsibility at #txlege to look at that?

@NRGMauricio I believe everyone has a responsibility to look at climate change.

#Txclimate #txlege

After 4 1/2 hours, Morgan and @NRGMauricio are off the hot seat in the House. Magness *still* testifying in the Senate #txlege

Thad Hill of @Calpine up now in the House. Calpine is one of top three electric generaors in the state. Almost all gas. #txlege #TexasBlackout

Hill says his retail customers will not see rate increase. Interesting point for those interested in the market, almost all generators own retail. @Calpine owns @ChampionEnergy. Retailers that don't own generation, don't survive very long. It's all "gentail" now #txenergy #txlege

@Calpine had two plants go down, Freestone and Deer Park. Voltage/frequency, he thinks, led to the outages. "I do believe it was grid instability that cause those to go off."

Also lost our plant in Corpus Christi. Gas supply was cut. #TexasBlackout #txlege #txenergy

He also said, and this hard to get your head around, we're now a winter peaking system in Texas. Crazy but technically true, I guess. 77GW last week. 75GW in summer 2019. #energytwitter

Hill continues: had issues from Monday through Wednesday with gas supply. They had firm transport. In one place pipeline failed. The others "the producers cut us" even though they had firm supply. Tuesday 40% of supply was cut.

Yeesh. this is stunning. #txenergy #txlege

About freezing plants: We lost 2 of our 12 plants.

We lost 2000MW out of the gate.

"I am sorry for what happened." We need better integration of the electric and gas supply system to make sure it never happens again.

#txlege #txenergy

Good point from Thad Hill: one of the big differences from 2011 is the massive growth in the Permian. Lots of electrified equipment out there now that wasn't there then.

#txenergy #txlege

@EddieLucioIII Are you regulated by the @PUCTX

Thad Hill, CEO of @Calpine: Yessir.

I know this is basic for #energytwitter but the general public needs to understand this.

@ERCOT_ISO. Is. Not. the. Regulator.

#txlege

Magness, CEO of @ERCOT_ISO in the senate just said "We're not a regulatory agency generally"

responding to @RolandForTexas who said can you do anything more than write a book report after these kinds of events?

@RolandForTexas continues: Did you contact the Governor's staff?

Magness: We try to make those contacts through the @PUCTX. There was a notice shared on Feb. 8.

#txlege #txenergy

Magness: Generators must share weatherization plans. We cannot fine them if they don't weatherize or share those plans.

Back in House. @Calpine has 8500MW of capacity in the state plus some co-gen. Had 500MW outage planned. Lost another 3000MW during the event.

#TexasPowerOutages

Questioning from @PhilKingTX, former Chair of Regulated Industries Cmte. Knows his stuff.

Asking about the chicken/egg question (h/t @EnergyLawJeff). Which went 1st, frequency dropped caused plants to trip, or plants went out caused frequency to drop.
Can we know? #energytwitter

Thad Hill, CEO of @Calpine basically says they have data that shows it was the frequency dropping. The reports from @ferc and others after this will be fascinating.

Now up in the House: Charlie Hemmeline @txsolarpower and Jeff Clark @APowerAlliance.

#txenergy #txlege

3900MW in service and 2200MW of solar under construction.

@ERCOT_ISO expected 269MW of solar in its Seasonal Assessment of Resource Adequacy.

solar exceeded this each day. Between 1%-6.6% (!) of total gen compared to .5% expected.

#txlege #txenergy

Hemmeline says voltage and frequency also caused trips at solar plants. Also some inverter issues and issues with workers not being able to get to the sites.

725MW customer cited generation in Texas, equal to a large power plant. some customers with solar could power their homes

@sarah_eckhardt in the Senate asks about #energyefficiency.

Magness said efficiency could make it easier to keep the lights on.

there are two sides of the equation: supply AND demand. Lower demand would have made outages less deep.

#txlege

@JeffClarkTweets with @APowerAlliance starts in the House.

Says lack of transmission in South Texas prevented power being generated there from getting out to where it was needed. We need to look at our transmission gri and address the constraints.

#txenergy #txlege

Follow @RafaelAnchia, also tweeting along with the testimony. #txlege #txenergy

Very interested to hear the questions now that come at @JeffClarkTweets.

Chair @chrispaddie kicks it off. For you specifically, as it relates for your industry/resources, what happened?

Clark says ice was the real problem for some wind turbines, not cold.

Also transmission constraints. Makes the point that transmission benefits all customers but we're not getting the full value right now because of congestion, especially in South Texas. Today, in the Panhandle, cheaper power can't get to market.

Also cite planning as a problem, specifically the Seasonal Assessment of Resource Adequacy must be improved. Clark compares the complexity of planning to school finance. #txenergy

.@JeffClarkTweets asked by Rep. Tracy King about wind in the SARA. Asks if the week before were there 30GW of wind production. Clark is being polite but the answer is no. ERCOT has 25GW and doesn't exceed about 15-17GW on a peak wind day. SARA expects 7GW, 2GW in extreme event.

If you want to go deep on why the SARA got it so wrong, read this from our Australian friends who seem smarter than us on this. Sorry, Texans. We don't look real smart right now. Might as well admit that and look to learn from others. #txenergy #txlege reneweconomy.com.au/did-wind-power…

Chairman Walker of the @PUCTX starts in the Senate.

Says if some of the things we did were wrong, we need to figure that out.

@PUCTX does not run the grid but @ERCOT_ISO is accountable to the @PUCTX

#txlege #txenergy

@JeffClarkTweets now comparing transmission constraints to road constraints. We call many of our Texas roads Farm to Market, we need to get power to market and that's why we build transmission.

#txlege #txenergy

@RafaelAnchia wrt to extreme weather, is there no where else in the world with similar demands that we can look to that we can learn how to prepare wind turbines?

Chairman: #energytwitter can help you with this! Many are dealing with similar issues.

#txenergy

@RafaelAnchia, founding member of the @TXClimateCaucus:

We need to have climatologists, weather experts because we've had 1:100 year events on extreme heat, hurricans, extreme cold, droughts. That's a lot that's being thrown at us.

I'd suggest @KHayhoe

#txclimate

@RepRaymondTX asking @JeffClarkTweets about the Renewable Portfolio Standard. Passed in 1999 and increased in 2005. If you want to read all about, @leahstokes wrote two chapters in Short Circuiting Policy about it. A brilliant history of the policies.

#renewableenergy

It's very interesting how @JeffClarkTweets, rep of the #wind and #solar industries talks about how wind and gas arecomplementary, while so many in the gas industry spend so much time attacking renewables.

These are all Texas resources, he says. #txlege

@Menendez4Texas asking questions of Chair Walker as to how these costs will flow to customers. Witnesses keep suggesting that only Griddy customers will pay for this.

That. is. wrong. Barring government intervention, all Texans (in ERCOT) will pay!!! not this month or next..

Chairman Hancock says that public power can "go out and get a municipal bond and spread over 30 years". I'm thinking public power customers won't like that very much.

#txenergy #txlege

@Menendez4Texas asks Walker did the distribution roll the outages effectively.

Walker explaining why it "took a little bit longer" to get some customers back on.

Now @Menendez4Texas asking about #demandresponse. Do you think we need to expand these programs? can we reduce power in commercial buildings that are empty anyway while neighborhoods are dark?

Chair Walker @PUCTX: I agree with you.

#TexasBlackout #txenergy #txlege

Menendez says why is Emergency Respons Service (ERCOT's biggest #demandresponse program) limited to $50m

She says we need to look to raise that.

#energytwitter

@RepRaymondTX this is the biggest thing we've worked on in my lifetime. He was elected over 20 years ago.

#TexasBlackout #txenergy #txlege

Chairman @chrispaddie: If we're going to have increased demand in the winter and that's not a great time for you (means wind). Since 2015, we've shut down between 8-9GW of thermal. I have no problem with wind or solar. If conditions are chaning and needs are changing...

and that's not your optimal time to produce it leads to some interesting questions. We've got to figure something out.

this is a great question, espeically when asked from a place, as I believe it is, of intellectual honesty and genuine interest.

Mr. Chairman, lots of great scholars are working hard on this. I hope you'll invite them to future hearings. They can help. just to name a few:

@EnergyUT
@cohan_ds
@MichaelEWebber
@RockyMtnInst
@EnergyInnovLLC
@uhoustonenergy
@TTUwind
@joshdr83

#txenergy #txlege

Now @oncor and @CNPalerts testifying.

These are the still completely regulated poles and wires companies (transmission and distribution utilties, often called TDUs).

#txlege #txenergy

Back in the Senate, @NathanForTexas asks what a Market Suspension Notice is.

Chairman Walker does not know.

Johnson: Somebody needed to step in during this crisis. Who I do I ask to fix this next time? Do we need to regulate the gas market better? The whole system was stuck.

Senator Creighton: Public Utility Regulatory Act gives @PUCTX complete authority over @ERCOT_ISO.

Even if you delegate to ERCOT, do you still hold authority and responsibility?

Walker: Yessir.

#TexasBlackout #txlege

Walker: I didn't understand the issues until I lived through this.

Creighton: Why do you need us to mandate responsibilities? You're the Chair of the Commission. I would say you are choosing not to leverage the authority we have given you.

Creighton says he's not a fan of a capacity market. The 9k MWh, he says, is an incentive to get generation built and also back online during these events.

Is there anything else, any other backstop, we could use. What do we need to do if you don't feel you have the authority?

Comment here: An energy only market can have a mandated reserve margin. Not saying that's the right solution. I'm not smart enough to know that. Just saying it can be done. Experts, is that right? @benserrurier @EricGimon @RegAssistProj @EnergyInnovLLC #txlege #TexasBlackout

@SenCreighton is incredulous that Chair Walker didn't come with recommendations.

#txlege #txenergy

Chair Hancock jumps in to answer question from Sen Paxton. Apparently there is no "pause" on invoices at ERCOT. Financial times reported on potential liquidity problems there. This needs more focus asap. The market could be collapsing as we speak.

Campbell: What happens to the money owed by REPs who fail?

Walker: That would be "uplifted to the market."

Translation: WE ALL PAY!!

cc: @scottbraddock @James_Barragan @hollyhacker

#txlege #txenergy

Campbell also asking about #demandresponse. Asks who would pay cost to shut off buildings.

Walker says it would be paid by the TDUs but that is not necessarily true. There are all sorts of demand response programs that are market based, not paid by ratepayers. @DonnaCampbellTX

@Menendez4Texas asks why #demandresponse is contentious?

Walker says (I'm paraphrasing) its because generators don't like prices to go down.

If big customers reduce, more grandmothers, more citizens could keep heat on.

Walker agrees.

@Menendez4Texas continues but we don't do it because some wouldn't make as much money?

that's correct, says Walker.

Menendez: We can't do that anymore.

Walker agrees again.

@Menendez4Texas says he was getting calls from nursing homes that were cut. We've got to do a better job.

Along the lines of @SenCreighton's question, you need to bring us ideas so that citizens of Texas don't suffer because generators don't like it.

Menendez continues, lots of customers will want back up power.

asks what can the PUC do to help customers get onsite generation.

Walker says we can address that

#txlege #txenergy

I'm concerned about using taxpayer dollars to subsidize companies to weatherize. We need to use our dollars to make sure Texans don't suffer.

Walker agrees.

Chairman Hancock points out that the bill on #storage he carried last session didn't pass in the House. It's now #sb415

@DrewSpringer asking about Denton utility which has said they owe $300m based on last week (compared to $75m all of last year). They lost firm supply, if I heard him right.

Springer also asking a question I thought about, will realtors start saying this house never went down during the #TexasWinterStorm2021. He said now I know what circuit I'm on.

This is a key point, distribution utilities plans should be more transparent. They're monopolies.

@DrewSpringer There's no good answer about who's going to pay this. Customers are going to pay it.

When you said "uplift" for companies like Griddy, that's coming back to customers isn't it?

...long pause.

Walker: Yessir.

#txlege #txenergy

Springer: If a muncipal declares bankruptcy, and REPs do too, does this at some point start to snowball?

Walker: yes, it can absolutely cause what we refer to as a spiral.

Yeesh. #txenergy #txlege #TexasBlackout

Hancock asks: are there things that could have been done differently?

Walker: better coordination between electric and gas. We started doing it in real time. Should have been done before.

I'll say again: we need a senior level energy person coordinating agencies in Texas.

Now up in Sen., Lori Cobos, Ofc of Public Utility Counsel. She says they have no authority over ERCOT, generators or TDUs. They represent residential and small comm. customers.

Pretty sure 99% of Texans haven't heard of OPUC. They represent you on the ERCOT Board.

They also advocate for consumers in rate settings. They are a staff of 12. They try to advocate for customers up against large commercial customers, industry lawyers, etc.

12. For all of us. We have systematically defunded our regulatory protection in Texas.

#txlege #txenergy.

Back in the House, Kenny Mercado of CenterPoint says they need better softward to manage load shed.

YES!!

Closes by saying we need better load management.

this must be a focus coming out of this.

#txlege #txenergy

@toddahunter tells @oncor and @CNPalerts he wants no talk of rate increases.

Pretty sure that would poll pretty high with the general public.

#txlege

If I heard right, Hancock says 47,000 customers on wholesale and 350,000 on variable rates. Interesting. I hadn't heard that number before.

Those on variable rates are the folks most at risk of higher electricity prices.#txlege

Chairman @ChristiCraddick of the @txrrc now up in the Senate.

#txlege

Operators were not the problem says @ChristiCraddick

No pipelines froze, if they had power to their compressor stations.

The power outages, she says, caused the problems in the gas system.

I think this is a chicken or egg question. Very hard to definitively determine #txlege

Craddick; We have an ad hoc group called the Texas Energy Reliability Council.

I've heard several witnesses today have rerferred to it, none glowingly. sounds like it's not robust enough. I'm not familiar with it.

#txlege

Craddick: We do not require winterization of wellheads except for certain kinds. We are not aware of any state that requires winterization.

#txlege #txenergy #TexasBlackout

Craddick: I never spoke to ERCOT directly. We never had a direct conversation about gas supply cutbacks.

#txlege

Craddick: Gas supplies were cut off at the wellhead but we were pulling gas from storage. The wellhead will always be a challenge due to safety.

what has not been recognized is that North and West Texas started having snow and freezing on Feb. 11.

#TexasBlackout

@NathanForTexas are you saying there was enough gas to meet demand? We couldn't get enough gas right?

Craddick: We had more gas than we've ever had. We were flowing and getting out of storage more than ever before.

Johnnson: Can we do a full analysis of where the problems were?

Craddick: there is a circular food chain. Without electricity you can't make the gas work. without gas, you can't make the electicity work.

Johnson: I'm confounded by the economics of this. Can you explain the economic justification for the high prices?

Craddick: we don't regulate prices. It was supply and demand. OK and NM were cold too.

Johnson: I've tried to put myself in the place of a gas producer. I have a responsbility to maximize profits to shareholders but that's in conflict with a state in crisis #txlege #txenergy

Johnson: Should we regulate prices?

Craddick: I don't know how we'd do that. We've never done that and I'm not sure that would be appropriate.

Johnson: I'm not suggesting normally we should. But in a crisis, should we consider it?

#txlege

Johnson: I have no desire to interfere with contracts or people making money but in a crisis we may need to.

Craddick. We'd be happy to partipate if that's the way you go.

that was an important exchange. @NathanForTexas asking great questions.

#txlege

Johnson: Can you winterize wellheads?

Craddick: only with electricity. That's what I've been told by "my operators"

Is it weird for a regulator to talk about "my operators"?

#txenergy #txlege

Switching back to the House where Bill Magness of @ERCOT_ISO and Chair Walker of the @PUCTX have begun to testify.

Whose idea was it to have House and Senate hearings on the same day? this is madness.

#txlege #TexasBlackout

I went back to the Senate and this line of questioning from @SenatorEckhardt is really interesting.

It would seem like selling gas at 200x the cost from one week prior, during a humanitarian crisis, would meet a common sense definition of price gouging.

#txlege #txenergy

Stopped for a quick bite and to say hi to my family. I'm back!

Chair @chrispaddie asking about winter peak and the need for better modeling at @ERCOT_ISO. This is something that could happen again. I hope it doesn't but how much confidence do you have in your models?

#txlege #TXEnergy cc: @VibrantCE

Magness: An event like this puts a whole new stake in the ground. We need to use this as an extreme.

He's missing the point though. This isn't the extreme. Next time could be more extreme.

We. cannot. use. the. past. as. predictor. anymore.
#anthropocene #climatechange #txlege

Interesting that Walker and Magness are sitting right by each other so when Magness says I'm not the regulator it's pretty obvious who the regulator is.

Chairman Paddie asks what action did you take for those that didn't comply with requirement to file weatherization reports?

Chair Walker says no action was taken unless they completely didn't turn it in. No enforcement if action if what was in the report was insufficient.

Why not, asks the Chairman?

I don't know, sir, replies PUCT Chair.

#txlege #txenergy

She also says of the report filed by generators of Jan 15 that "she's aware of it now."

This is kind of painful.

#txlege #TexasBlackout

This is a huge point from @GoldmanCraig. We need a 5 person commission. With only 3, they can't talk with each other because 2 of them are a quorum and would constitute an open meeting.

#txlege #txenergy #TexasBlackout

Now @GoldmanCraig asking about ERCOT's meteorologist. Note Magness told @TexasMonthly they have no climate specialists on staff

They've got a guy looking at next week's weather but not #climatechange and the potential for it to wreak havoc.

#txclimate

texasmonthly.com/news/interview…

@ERCOT_ISO CEO Magness:

We went into this expecting high load and rotating ouages on Monday and Tuesday morning.

What we didn't see was half of generation going offline.

Sunday night was a horror show.

No one said Sunday, to my knowledge, they were expecting outages. #txlege

How many emergency levels are there asks @GoldmanCraig?

There are three. Stage 2 includes the ERCOT's small amt of #demandresponse which is almost all commercial and industrial. Wasn't much DR to call Sunday at 1:30, I don't think. If someone has different info, lmk.

#txenergy

Magness (ERCOT CEO): most people don't know who we are.

Rep @GoldmanCraig: they do now!

(Like refs in an sport, you're only talking about them if something went wrong.)

#txlege

Chair Walker says the max price was set at $9k/MWh because of economic calculations of the value of lost load.

VOLL is something that policymakers need to look closely at it. It's not the same for everyone. Hospitals, water treatment, elderly, people with medical equp't

have a much higher value. This is why you need #demandresponse

We can never be in a situation again where some people lose no power who could lose it without dying, and others lose it for extended periods and need it for oxygen takes.

Loads are not of equal value. #txlege

The load forecast wasn't an issue, says Magness. I think he means day ahead.

But the Capacity Demand Reserve and Seasonal Assessment of Resource Adequacy were WAY off. ERCOT's extreme scenario was 67MW. We would've hit 77GW without outages. #txlege

@RepAbelHerrero is on the right track. There are two sides to this equation. Supply AND demand. We need to weatherize equipment to ensure reliability of supply but we also need to reduce demand through #energyefficiency and #demandresponse.

#TexasBlackout

Only 13 minutes from EEA 2 to EEA 3.

EEA2 is responsive reserves and #demandresponse.

EEA3 is blackouts.

There just wasn't much C&I load. Need resi demand response. There's so much potential too. Could have saved lives. And could next time.

#TexasBlackout #txlege #txenergy

This will be the last panel in the House. Will reconvene at 9am tomorrow.

I'll be back here tweeting it.

this has been (weirdly) fun. If you have questions, please ask. I'll try to answer. Feels weird my expertise is so useful. Not used to this :)

#txlege #texasblackout

Chair Paddie asks what's ancillary services.

Magness says three kinds they have:

Regulation
Non spin reserve
Responsive reserves

Sometimes it's demand side, he says. (not often)

Chairman says needs more discussion on this going forward.

Now talking abotu #demandresponse in the Senate. We've got to get more surgical and we could do it on the gas side, too, says Curt Morgan, CEO of Vistra in response to @Menendez4Texas

this is big and I hadn't thought of it. I think NY has a gas DR program. #energytwitter?

One of @VistraCorp's coal plants failed. Discussion now about how Vistra will come out financially from this.

Morgan: this is the big unknown, whether the system will work and most people will pay their obligations.

Earnings call tomorrow should be interesting. #txlege

@SenatorEckhardt wants to explore #energystorage with CEO Morgan. Said she believes Vistra has large project in CA and one here?

He confirms 10MW of storage in Texas. Batteries would have helped us for about 4 hours on Monday morning but not beyond that.

(This is true but...

Storage could help us in other outage situations and storage at the home could've last even longer depending on size.)

Chairman Hancock adds storage would really help with summer peaks.

Morgan agrees.

#txlege #txenergy

@SenatorEckhardt Looking at new market designs, would you consider connections to the other grids?

Morgan: that could be explored. But that could mean FERC jurisdiction

Note: not necessarily! @AriPeskoe @EnergyLawJeff

@SenatorEckhardt Points out that Vistra has a plan called VistraZero and are driving to zero emissions and that all their EBIDTA will come from clean by 2040.

Morgan: says yes, that's partially because of #climatechange but mostly because of economics. It's economically driven

Chairman Hancock does not stop Morgan from talking about climate change like he did @whitmire_john.

Morgan says he doesn't like closing coal plants. maybe that's why they still have so much in Texas. But says they're more reliable. I believe the number was 6GW, including one of VIstra's, or about 40% of total coal in Texas was out during the #TexasPowerOutage #txlege

Morgan now addressing Provider of Last Resort issue. Customers with REPs that go out of business will go to @txuenergy and @reliantenergy. Says they'll be treated well but is very vague about what that means.

Key customer protection issue. @AARPTX i'm sure will be on it

#txlege

Chairman thanks @txuenergy and @reliantenergy for "taking those customers." Morgan says "we were begging for them."

REPs typically spend $200+ to acquire new customers. This is a windfall for them.

#TexasBlackouts #txlege

Three more tonight, says Chair Hancock

The impact to the residential customers will be zero says @NRGMauricio.

I still think this is disengenuous. Sure, no impact on the next bill but how does the market absorb $50b charged in one week? It always flows to the customer.

#txlege #txenergy

The focus should not be on @gogriddy customers.

I'll say it again, all (or at least the vast majority of) customers will pay in time unless there's government action.

#TexasBlackout

I think #demandresponse is critical to improving reliability says @NRGMauricio.

There are multiple ways you can do it. We have a voluntary program with commercial customers where we pay them.

We also have residential DR.

Gutierrez continues: Smart appliances and thermostats allow us to do things we couldn't do before. We offer some money to customers to change a few degrees.

@Menendez4Texas has been great on this critical issue today.

#txlege #txenegy #TexasBlackout

@Menendez4Texas wants to work on market design and asks about the $9000MWh cap.

@NRGMauricio says we need to review the market structure and is open to it.

We need a comprehensive root cause analysis.

He's right about that.

#txlege #txenergy

@NRGMauricio says we need a reserve margin target. Every other market has one. from that, everything else, incl market design, flows.

(ERCOT has one 13.75% but its not mandated and doesn't really mean anything.)

#TexasBlackouts

Back in the House @RafaelAnchia asking about @PUCTX's testimony of how limited their powers are.

Says on the PUC website, the mission statement says we protect customers, foster competitive markets, and promote high quality infrastructure.

Anchia asks what does that mean?

It means the grid, transmission and distribution.

Anchia: what do you do?

Walker: we regulate utilities.

Anchia says you're an implementer of policy adopted by #txlege. And then you implement through rules?

Walker agrees. #txlege

he then points to the statute with @PUCTX's responsibility. It says PUC can decertify the grid operator. Gives "complete regulatory authority over ERCOT." Goes on to state that ERCOT is directly accountable to the PUCT. Complete authority includes operations.

#TexasBlackouts

The language in statute says @PUCTX must "ensure adequate performance and function."

"It has to happen, right?" says @RafaelAnchia

#txlege

@RafaelAnchia Says certain politicians are calling @ERCOT_ISO a rogue nonprofit corporation. But in the bylaws it says the state agency that has responsibility is @PUCTX. And that ERCOT cannot appoint a CEO without PUC approval. All board members approved by PUC

Walker agrees

@RafaelAnchia skillfully removing all doubt who is responsible for ERCOT.

It is the @PUCTX

#txlege #TexasBlackouts #txenergy

@RafaelAnchia brings up SB 1133 from 2011. Says you were empowered to weatherize. We told you weatherize. Did you ever, once, submit a report as authorized in the bill?

Walker says no.

Here's the bill capitol.texas.gov/BillLookup/His…

In 2013, @PUCTX went through Sunset process (this is a process every state agency goes through to evaluate its performance and effectiveness and to decide if it's still needed. If not, it is sunsetted)

During that process, @RafaelAnchia says the Sunset bill gave even more authority. Asks did you use it?

Walker says no.

Anchia says #txlege specifically said they wanted ERCOT to be accountable to PUC. Reads quotes from bill analysis to show that. it's unambiguous, he says.

@RafaelAnchia asks: Do you think Texans deserve an apology from the @PUCTX?

[Pause]

The fact that you're hesitating is astonishing.

No further questions.

#txlege #txenergy #TexasBlackout

I was gonna stop but these questions from @DrewDarbyTX are really good.

Magness says there are invoices out for $20b and that's not it.

"This is a heckuva problem," says Darby.

Magness says we're trying to solve the "uplift problem"

Darby: Is there a tooth fairy out there?

Darby worried about co-ops and uplift. What's the engame he asks?

Magness: We need a credit facility.

Darby: But you don't have any assets. Who's gonna backstop that?

Magness: We're trying to figure that out.

Lord have mercy. What a mess.

#txlege #TexasBlackout

@DrewDarbyTX Is this the next crisis?

Magness: We don't know. We're trying to manage as best we can.

Darby: I'm skeptical. The providers in our districts may not be able to pay for the uplift. They may be able to pay what they owe but not the extra.

What an exchange that was.

@ronereynolds asks if ERCOT and PUCT take into account #climatechange.

Magness says we may need to look at going forward how do we factor into our forecast events beyond the worst case.

Walker: it's clear to me that there are large impacts from hurricanes.

@ronereynolds points out that there are no people of color on the ERCOT Board even though 50% of the state is non-white.

Magness says they need to do better on that.

As if there wasn't enough to be frustrated about already...

#txlege #txenergy

@ronreynolds asks also if connecting Texas grid to Eastern and/or Western Interconnect would alleviate the problem. Magness said MISO and SPP were having issues at same. time. Reynolds says what about El Paso. Magness agrees, connecting with Western Interconnect might've helped.

And that's it! 15 1/2 hours. Will start again in 8 1/2 hours.

#texasblackout

/end