Thread by @taygoldenstein

The joint hearing of the State Affairs and Energy Resources committees is starting now. Watch it here: tlchouse.granicus.com/MediaPlayer.ph… #txlege

State Rep. Chris Paddie, chair of State Affairs committee, says the deadline for submitting electronic comments to the House has been extended to March 1 at noon. This story has been updated. Trying to confirm the Senate's deadline. houstonchronicle.com/politics/texas…

State Rep. Craig Goldman, chair of the Energy Resources committee: "I know I speak for every member of these two committees and in the TX state House when I say that what happened last week was completely unacceptable."

Goldman: "We are Texas, and we are better than what happened to our citizens. The question I know I want answered is: Was mother nature to blame or man or both?"

State Affairs Vice-Chair Rep. @AnaHdzTx says at least 32 Texans died in last weeks' event, from cold exposure, carbon monoxide poisoning and house fires. Harris County alone reported at least 15 fatal cases of hypothermia.

A tearful Hernandez says the hearing will be focused on "megawatts" and other technical terms, but "we must remember that no cost was greater than that experienced by these grieving families.

We owe it to them and every Texan to ensure this never happens again."

Energy Resources Vice-Chair @RepAbelHerrero: "When TX needed electricity the most, they were left in the dark + in the cold to fend for themselves.

As we con't our investigation to answer why, it is clear there was an abominable display of inaction and ineptitude in leadership."

Curt Morgan, president and CEO of Vistra Energy, testifying first.

"Somehow we could not solve the riddle of a winter storm. For that, I am very sorry. I think there's accountability to be shared by many in this, including my company, and I hope to do better."

Morgan said his company reached out to lawmakers and others to warn them.

"We had no idea that the performance of the entire energy system was going to break down. Even without that, we didn't have energy generation on the ground given this unprecedented demand for electricity."

Morgan: "I knew that it was real bc the financial markets moved quickly. The price of gas, the price of power shot up though the roof."

Morgan said he saw a "surprising lack of urgency" among some public officials they spoke with.

Morgan: "This was certainly to some extent performance generators, but the big story here again imo was the failure of the gas system to perform ...

If we don't have a seamless gas and power system, what happened last week will happen again."

Gas and power systems "did not work in tandem," Morgan said.

"I know it's winterization, but this really is not the 2011 event." Says winterization would make systems break/make it very hot to work in 100-degree summer days.

Morgan: "Market design has got to be on the table. This market is set up and it's going to have volatility bc you have set it up that way. I say you -- we -- have set it up that way."

Morgan (con't): "With a $9,000 (per megawatt hr) price cap, the market has to reach that in order to get enough assets on the system to keep reliability. It doesn't have to be that way."

Morgan: "These are all choices we make. In those (capacity) markets, they have 30% reserve margins. In our market, we have a 15% reserve margin."

Morgan: "So squarely on the table is do we have enough reserve margin. We can probably still use the same market design, be we might need to think hard and long about whether we like the $9k cap and whether we like the volatility that comes with it."

Mauricio Gutierrez, president and CEO of NRG, up now, sounding solemn.

"The entire energy system failed Texans. We know we can do better, and we must do better to make sure this never happens again."

Gutierrez: "We employ 3,400 people in the state. 700 of my colleagues were working around the clock trying to keep the power on while they have been impacted at home."

Gutierrez, CEO of NRG, re: Texas winter storm: "The one thing that keeps me up at night ... is (thinking about) what else I could have done."

Gutierrez: "We did not perform as well as I would have hoped. That said, I am very proud of every single man and woman at NRG."

Tuning back in after a short writing break. Paddie speaking to the testifying energy company executives:

"It's not just that we weren't winterized ... We had supply chain and other contributing factors that forced you offline."

Goldman asks: "Did y'all warn the general public of what you saw coming?" in the weather forecast.

Morgan says they sent out communication that major event was coming and to conserve via text message and social media.

Goldman asks: What did NRG do to prepare for the weather event that Gutierrez said its meteorologist warned them of?

Gutierrez said they tried to notify customers and brought in supplies to operate in "island mode" if cut off from supply at generation facilities.

Gutierrez: "We made all of our units available, completely. When you actually have a power outage, a load shedding event, that means you don't have enough supply to meet the much increased demand that we had due to the weather."

Goldman asked if NRG communicated to ERCOT that it feared it may not have enough power for the weather event's demand.

Gutierrez said he didn't have the information to know whether it could meet demand.

Morgan says ERCOT upped their forecast of demand, but he said he didn't see the level of communication from the state as it gives prior to a hurricane or other disaster.

He was thinking we "ought to start telling people this is coming, giving them a chance to prepare."

Morgan on notifying customers of possible outages: "This is big enough that I was concerned that we were not sending that signal from the state level. We were doing that with customers; I just did not see that (from the state) at a time I thought was warranted."

Morgan: "What I think nobody planned for was the pressure on the gas lines ... The perfect storm was the gas system failed. And it didn't just fail in TX. We were having problems with freeze-ups in OK that feeds gas into TX, out of NM."

Herrero: "What I'm concerned most about is you relayed that info to ERCOT, ERCOT then didn't have enough urgency to do anything about it."

Morgan: "I think it's strong to say they didn't do anything. My sense is they did what they normally do." (???)

Morgan: "We tried to notify the people that we could ... I just know it was a major concern and we had a disconnect between supply and demand."

Morgan on lawmakers taking a look at the state's required energy reserve margin: "The more renewables you add to the system, the greater the reserve margin needs to be."

Morgan: "We're introducing correlated outage risk bc when the wind doesn't blow, all wind doesn't work, when the sun doesn't shine all solar doesn't work.

That's going to happen, and when that happens, you have to have reserves to back it up."

Gutierrez: "We prepared. We prepared as much as we could knowing what we knew about the winter, what has happened to us in the past. That is the question that haunts me every day since this happened. What else could I have done."

Gutierrez: "Did we winterize the units? Yes we did
Did we secure fuel supply? Ywd
Did we bring as much capacity as we could? Ywd
Did we bring addt'l critical supplies we needed in case supply chain impacted? Ywd
Did we use all human res could possibly do at our power plants? Ywd"

Gutierrez: "It was not enough. We have a systemwide problem, and we need to look at it and find a system-wide solution."

Asked about having a battery backup by Herrero, Morgan says it "would have done no good."

Says battery would have been drained in the first 4 hours and never replaced bc the price of electricity was too high at that point.

Morgan: "This was an event that was clearly out outside of what the infrastructure was built to handle."

Says generators can't encase its equipment (i.e. weatherize) like in cold states "because in summer months, you create a heat issue."

State Rep. Todd Hunter comes out blazing.

"I hope you haven't been lawyerized instead of weatherized."

"Who's at fault? I don't want to hear abt systems. I want to hear who's at fault."

Gutierrez: "I don't think you can put one thing specifically that was at fault."

Hunter: "I want details. You have to believe, a man in your position, you have to know who is probably responsible, so tell me some specific groups."

Gutierrez says gas suppliers, then power generators like himself.

Asked who's to blame for Texas power outage, Morgan says: "I know everybody wants to play who's to blame --I look at this as who can improve. Nobody's perfect. I know we live in a society now that wants to blame people. That's not my game."

Gets a little tense.

Morgan: "I know you don't like systems. That's too bad. That's what it is."

Hunter: "That sounds like lawyer talk."

Morgan: "I'm no lawyer, and I didn't even talk to a lawyer before I came here."

Morgan says he thinks gas processing plants could have been winterized. Thinks the gas companies increased prices arbitrarily. ERCOT and PUC deserve some blame.

"There's plenty of blame to go around. It doesn't do anything to solve anything ... The thing was a colossal failure."

(On a sidenote, lawmakers have been asking a lot of basic questions about how the system works. What ERCOT does. What PUC does. Makes you wonder how much preparation was done before today...)

Hunter says many, including his own parents, were still reeling from Harvey.

"One lesson we could learn is care for the human beings. But we need to do it before rather than after ... I look forward to visiting with you and this not be the last day we talk," says to energy execs

Beaumont state Rep. Joe Deshotel says he hasn't gotten a clear understanding of what caused generation units to fail.

Morgan: 1 frequency related trip, out for an hour. Weren't getting gas at pressure needed. On coal, some weather-related issues: Rail line froze up. Frozen coal.

Gutierrez attributes generation failure to three things:

1) Weather
2) Frequency
3) Gas system supply

Dallas state Rep. @RafaelAnchia asks about weatherization:

Morgan said equipment was built to withstand 10 degree weather. Spent $10M to supplement to get through 0-degree event. Put up windscreens, used portable heating equipment.

Same q about what did to weatherize:

Gutierrez: Winterization program was extensive. Put every plant at maximum alert. Brought addtl supplies.

Anchia says generators weren't able to benefit from high prices, the companies that would want to benefit from high prices to build more baseload. Speculators in gas market/gas traders were the ones that really walked away w the bag of money.

Morgan says he believes so.

Morgan: "As it relates to capital, investors don't rly like volatility, they're going to be less inclined to invest equity into projects when they see that."

Anchia: "Is anyone going to want to invest in that volatile market?"

Morgan: "I'm worried about that."

Anchia: "It's a disincentive for investment in the state of Texas. We really do have to take this thing apart and understand how we come up with less perverse outcomes."

Anchia asks about this article: wsj.com/articles/texas…

Gutierrez says he disagrees with it. Says Texas enjoys one of lowest retail rates in the country, in bottom third of all the states.

Gutierrez says two components to retail prices: 40% of bill is distribution, charged by regulated entities. That has gone up significantly since deregulation, every yr, almost double.

Other component is competitive -- that's been coming down over time.

Gutierrez: The more renewables we have, the lower prices we have seen. In the last five yrs, 90% of all prices under $35 per mwh.

"Very few markets that can act provide that to their customers."

"I actually think competition has benefited Texans."

Morgan echoes his point and says he thinks the article ignores the benefit that Texans receive from having the power to choose their retailer. If they don't like what they're getting, they can switch providers.

Morgan to state Rep. Tom Craddick: "The insinuation we withheld power is absolutely ridiculous."

Craddick said that idea is out there, so he had to ask.

Craddick: When market went negative, did either of you buy gas? In last two days?

Morgan: "We're constantly in the market, so I'd have to find out." Gutierrez didn't know.

Craddick: "That's what y'all did. And you got caught."

Craddick: "A lot of people who had not sold their gas weren't able to sell ... Unfortunately for consumers, you all get to pass that on to consumers."

Morgan and Gutierrez say no. With real-time prices, we don't pass it on.

State @RepRaymondTX asks Gutierrez and Morgan to put together a report showing weaknesses in system. Asks how much time they'd need.

Gutierrez said it would be a No. 1 priority. Morgan says a couple weeks maybe less.

Raymond: No, no, no.

Morgan: OK, a week. Gutierrez agrees.

State Rep. @EddieLucioIII says the general public was not afforded the ability to seek safety.

Says that was his "biggest disappointment" in stakeholders that they failed to warn the public about what was coming and that it wouldn't be short, rolling outages.

Gutierrez: "We did notify our customers before (the storm), but perhaps we could have done more."

"We need to be more proactive and more open. Even if it's not our role. Even if we're not the agency that needs to tell the public that there's a winter storm coming."

Lucio tells energy execs that his expectation going forward "is that we all work very closely to safeguard Texans in the future."

"Do not wait. We'll deal if there is a panic." Says Texans "could have made lifechanging decisions" if they had warning.

Rep. Ben Leman, R-Anderson, asks why they don't keep an energy reserve, Morgan says the system has been so reliable, it's not cost-effective to do that.

Says they have off-site storage that is delivered through pipe.

Rep. Will Metcalf, R-Conroe, says he never wants to again read in his local paper about a death from hypothermia.

"The public demands and rightfully deserves answers and fixes."

Morgan said there wasn't enough gas being injected into the system bc of the wells freezing over and/or in some instances some compressors that were electric got cut off from power. Also had issues getting gas out of processing facilities bc of freeze-ups.

Morgan: "In a market with $9,000 Mwh pricing, the risk is skewed in a way where the consumer can get hurt. Our avg price in ERCOT is around $35/ Mwh, and it can shoot to 9,000. That tells you the skew is not in favor of the consumer."

Morgan: "I don't think that's what we want for our consumers. I don't care how much boilerplate you put into it. They don't fully understand it ... It makes absolutely no sense to me. That's why we don't do it."

Morgan on companies that sell at variable wholesale prices vs. fixed rate: "When you do that, then you have to bill your customer $13,000. You're never going to be w/ that customer again. That's not what we want. We want them to be a customer for life."

State Rep. Donna Howard asks what changes they'd suggest.

Morgan says he likes the idea of some reduction in the price cap and an increase in the reserve margin.

But adds: "I'm not advocating anything here; I'm answering your question."

State Rep. Matt Shaheen, R-Plano, asks if it's possible energy cos + partners need to revisit emergency plans.

Morgan: Yes, but more important than that, need a protocol btwn gas + power.

"There's nothing that I can do if gas companies cannot get pressurized gas to us."

Morgan: "I was not trying to paint a big, negative picture of the gas business. I was more talking about, like Mauricio says, how do we harden the whole system? I think that's what we're really seeking here."

Gutierrez says wind usually supplies btwn 30-40% of total capacity during winter. Last week, it was around 10 percent.

Shaheen asks if it would help to decrease renewables.

Gutierrez: "Really depends. We rely on natural gas for 50% of total generation. The natural gas system had some supply issues ...

The more diversification we have on fuel, I believe the more resilient is our system."

Rep. Sam Harless, R-Spring, says communication failed. ERCOT was "pathetic," PUC was "nonexistent."

"We have to answer to our people. They deserve to know what's going on and they didn't know."

Wow, this from Curt Morgan, CEO of Vistra Corp, on Texas power failure:

"I was a big proponent of this market, and my faith has been shaken. I think we have to look a something that is more stable than this. This is just not befitting of the state of Texas."

Morgan, Vistra Corp CEO (con't): "We let you down, we all let ourselves down ... And like I said, I used to tout this as being the best market and everything else, I think it is, but it didn't work in this situation, and in a big way. And we've got to revisit it."

Rep. Shelby Slawson, R-Stephenville, says stories are piling up from constituents. Ppl lying in bed with fractured hip, unsure when help would arrive, ppl with dead electronic prosthetics immobile.

Says she wants to see plans that show how energy cos will improve communication.

Paddie says in Senate, ERCOT CEO Bill Magness denying that there was a frequency event.

Gutierrez says still, the instability in the system led to generators tripping.

Paddie anticipates they will say that's bc generators weren't following rules. Morgan and Gutierrez disagreed.

Paddie: Would you agree that the cap at that $9K bc it's intended to incentivize but you can't incentivize when you just don't have any more to give?

Gutierrez: In the context of realtime market, you are correct. But realtime prices inform all the forward markets.

State Rep. Ron Reynolds, D-Missouri City, asks if Texas should study the impact of climate change on extreme weather patterns in the state.

Gutierrez: "It's important we look at extreme weather in a different light, given what we have seen. So yes."

Reynolds asks if it would surprise Gutierrez that bills proposing that effects of climate change be studied have gone nowhere in the #txlege.

Gutierrez first says "idk" but then says there's a "shared responsibility by everyone to look at the implications" of CC.

Thad Hill, president and CEO of Calpine Corporation, starts with apology.

"It is absolutely unacceptable that in a state like ours we couldn't keep the lights on and probably more importantly the water flowing and the heat on. That is something we absolutely have to do."

Hill (con't): Having power and water "are among the most basic needs of humanity, and we failed. We had a part in that failure, and for that I am sorry. I will try and do my best to lay out what happened and what our part in that was."

Hill also says frequency issues caused generation plant trips. "Not definitive, our belief."

"I do believe there was grid instability that caused these two trips."

Corpus Christi plant also knocked offline when gas supply was cut bc provider's gas yard lost electricity.

Hill said since 2011, been updating seasonal best practices. Company is on 25th version of emergency operations plan.

Hill says energy cos need to work with gas suppliers and pipelines and agencies to make sure this never happens again.

"This is very different than what happened in 2011 and the solutions and path forward are going to be very diff as well."

Hill: I thought when I went to bed Sunday night we were going to be in good shape. Phone started ringing in the middle of the night from ppl at power plants saying they'd gone offline.

Herrero asks what could Calpine could've done differently.

Hill: "I can't answer that q right now except that the winterization protocols that we thought were rock solid failed at two power plants. We have to know why ... I'm sorry, I know that's not a satisfying answer today."

Hernandez asks about frequency issues again.

Hill says even if frequency relays don't trip, equipment inside plant actually responds to swings of voltage and frequency.

Raymond asking if Calpine, like Vistra and NRG just committed to doing, can also provide a report on what can be improved within one week.

Hill agrees to it.

Raymond adds: "I've never seen anything that has so profoundly impacted so many people in this state."

Hill says he did not know there was going to be a grid emergency.

"Maybe my colleagues have better insight or better models" but says ERCOT did not call for conservation until Monday night.

Lucio: Did you find it necessary at any point to communicate that the expectation for power to come back on rolling basis was not realistic?

Hill: "No sir, I did not know what the utility plans were for rolling outages."

Lucio: No one at ERCOT/PUC communicated that?

Hill: No.

Rep. Jake Ellzey, R-Midlothian, says lege will fix this power problem within a year ‼️

Hill says he makes that commitment, too.

"I don't ever want to be here again. I want to fix this and you have my full commitment."

Hill says company has a desk in Houston with screen with all of power plants. In constant communication with all power plants.

Dispatch decisions come from ERCOT. Our ppl in desk translate and work with people in power plants to make that work.

Hunter again with this q: "Who's at fault? Give specifics."

Hill: For winterization of power plants, 2 of 12 plants failed because of weatherization. I am at fault.

Also the lack of power and gas coordination, he says.

Hunter has been subtly cracking jokes all day. Just now: "I know people got rolled, but there weren't any rolling blackouts." 😂

Hill: I'm not going to point my finger at the gas groups themselves. I actually believe there's a regulatory and industry gap.

I believe there has to be collaboration btwn gas generation gas groups, RRC and PUC.

State Rep. Phil King asks about frequency imbalance. Is that a result of load not being balanced out?

Hill says yes.

King asks if that disruption could have been rebalanced a lot quicker had ERCOT more quickly sent out orders to the right service providers to shed load.

Hill: I'm not enough of a transmission expert to tell you if it could be handled different.

Hill: If you drop below a certain frequency, low-frequency relays open. We did not have low-frequency relays open.

Says it was more the disturbance that caused problems. Hill says the company is still doing research based on information from equipment.

Hill says important point is that in Texas, company tends to begin some of planned outages, particularly if long and complicated, in winter bc typically winter capacity has not been that important. So they're ready by spring.

Hill: "The load would have been 77K mw on peak Tuesday morning. That is above the peak load this summer in ERCOT in a really hot month. I will tell you, if we believe bc of this weather events, if these events are actually gonna occur, we have to rethink a lot of what we do."

Charlie Hemmeline, executive director of the Texas Solar Power Association, is up next to testify. It's a trade association for solar companies in wholesale and retail markets.

Called what happened last week, like many others today, "unacceptable."

Hemmeline: ERCOT's data shows outages or other output reductions occurred on Monday, which was about 25% of solar capacity, tapered down as impacts mitigated.

Hemmeline: Several sites intermittently offline. One site had inverter trip offline due to weather. One site had 200 inverters that had to be manually reset by operators on site who did so throughout the week through ice and snow.

Hemmeline: ERCOT estimates more than 725 mw of customer-sited solar generation, basically equal to a large-scale power plant. Those people w/ solar panels were able to keep homes powered while millions in state were without.

Jeffrey Clark (@JeffClarkTweets), president and CEO at Advanced Power Alliance, is also on this panel with Hemmeline.

Says this was a system-wide problem. "For a state that leads in energy, it's embarrassing."

Like Morgan, he says last week has shaken his faith in the system.

Clark: "We failed in this event because of the weather, and we need to figure out how to manage that better going forward."

Clark: "We're assessing how we can improve the weatherization."

Says fog accumulated quickly, movement of wind turbine blades increased surface area, temperatures so cold that it froze almost instantly.

Assessing whether materials could prevent that in the future.

Herrero asks why he sometimes sees some wind turbines running while others not.

Clark said that's bc machine is either broken (rare) or, more likely, bc no transmission to get power out. They're stopped to limit wear when not transmitting.

Herrero asks if Clark's entities communicated to ERCOT that wind would be limited in its energy generation during storm.

Clark says yes.

"Being able to project how much power we will be able to deliver is part of our business, and that is communicated to ERCOT."

Clark: "Our worst-case scenario was very, very lacking."

Herrero asks how Clark's entities didn't have time to give notice given forecast showed precipitation a wk ahed.

Clark says transmission issue ongoing with PUC/lege. Says the freezing fog was unexpected.

Hemmeline says many operators are used to weatherizing in states where cold is more common. The same can be done in Texas. Some of those changes aren't to the equipment necessarily but to staffing levels.

Anchia asks Clark to talk about how ice impacted fleet of helicopters that they "release from Green New Deal death star" 😂 from tweet RT'd by members of the Legislature:

Clark says that's been pretty well debunked. Photo from Sweden. Says individual was trying to be humorous.

Anchia: "Is there nowhere else in the world that has similar demands on renewable generation that we can look to?"

Clark says he's not sure, but it's something his group is addressing with equipment manufacturers.

Anchia says it would be helpful to have weather experts on future panels. He's seen 70-100-year events on droughts, hurricanes, tornadoes, polar vortexes twice + extreme heat.

"If we're going to ty to hit that bogey of a resilient system, that's a lot that's being thrown at us."

Raymond asks if #txlege ever passed legislation mandating turbines put up. Clark says no.

Hemmeline says there was 1999 law that called for certain amt of renewable capacity that had to be built, "but that was exceeded many yrs ago." (In 2009). Bckgrd: houstonchronicle.com/business/energ…

Clark says his organization for past decade has believed there's "highly complementary relationship btwn renewables and natural gas."

"Natural gas is a fast-ramping ... much cleaner fuel that can be available when the wind fluctuates, the sun is down, and you can layer."

"I think all of our confidence has been shaken, but we can make Texas the focal point for the world right now ...

We want to work together very closely with our oil and gas community," Clark said.

Hunter at it again asks his signature q today: "Who's at fault?"

Hemmeline: Every entity in TX has a role in the electric system, legislature, ERCOT, generators, etc. There's opportunities in every one of those areas.

Hunter: Including renewables?

Hemmeline: Yes.

To Hunter's Q "who's at fault?" Clark says everyone in the system is at fault in some way. The generators. The fuel supply generators rely on. ERCOT and PUC.

Clark is asked about whether federal subsidies that renewable sources get are preventing thermal investment by making it hard to compete.

"The problem ... is that what is a subsidy to one industry, another industry doesn't consider what they receive as subsidy."

Raymond encourages fellow members to not politicize these issues. Says he's hearing state officials (read: Abbott) wrongfully blaming AOC/Green New Deal.

"If we want to solve this problem and move forward in a meaningful way, let's try not to be as political," Raymond said.

I have to step back a little from as closely live-tweeting, but sounded like Hemmeline and Clark said they would also produce reports in a week, like the other generators agreed to in the last panel.

Next set of panelists are up: Allen Nye of @oncor and Kenny Mercado of @CNPalerts.

Mercado and Nye are asked by Lucio whether PUC and ERCOT adequately regulate their industry. Both say yes.

Yet Lucio asked Nye about emergency plans and didn't know what was required of him.

"Do you understand how that's contradictory?" Lucio asks.

Nye says it's hard to say because when he thinks back on past work with ERCOT/PUC, it's been good, but last week was "horrific. So I get the point."

Lucio told him not to judge based on the "good times." Should base it on the hard times.

PUC Chair DeAnn Walker says she did not know what other commissioners were doing during the crisis bc it would have violated Open Meetings Act to call them.

Goldman asks if that's a good model. Walker says having 3 board members is difficult for that reason.

Goldman asks ERCOT CEO Bill Magness if he felt like the org was prepared as of the weekend before the storm.

Magness said he expected rotating outages Monday and Tuesday mornings, but not what actually occurred.

He realized Sunday night, which "was a horror show."

Magness on his messaging mistake: "The worst thing we did was: The understanding that this was not going to be rotating was developed into Monday morning ... it became clear we've never seen a controlled outage that is this large ... We didn't pivot fast enough."

Magness asks: "Should we be the bearer of that message?" or should the org have someone on retainer (like a PR firm) to ramp up communication when necessary?

Goldman points out the org already has a public information officer.

Walker says $9,000 per MWh cap was set in 2015 by commission "based on studies that showed value of loss of the load. It's economics that come up with that, and it's what people are willing to come off the system at that price."

Never intended to be used in an event like this.

Magness just said something about "if the organization is going to be dealing with the public" going forward, and Herrero told him he took offense to that, saying the decisions his organization makes are life or death.

Magness apologizes for how he came off.

Herrero asks Magness about communication with gov's office. In week leading up to the event, most was with PUC.

On Saturday, Magness participated with Walker on briefing of governor. Had several conversations w/ gov and gov's staff. Spoke to him Monday as the event was evolving.

This will be the last panel of the night, Paddie says. The joint committees will reconvene tomorrow at 9 a.m.

Still going until lawmakers are done questioning, though.

Asked about high bills some Texans are seeing from retailers on indexed pricing, Walker says: "We do have concerns out of that event about it, and that's something we're going to look at it."

Asked if PUC should be held responsible for not looking at that sooner, she says yes.

Anchia, after leading Walker to admit PUC has "total" authority over ERCOT, says he wants to talk about SB 1133 (the weatherization bill).

"I do not believe that SB 1133 was as optional potentially as some might suggest."

Anchia: That bill really sailed through the Legislature. There was no opposition. And in fact ... it literally went through the Legislature in both chambers without a single member voting no."

Anchia: "We told the PUC we wanted you to identify energy risks ... We provided the PUC with the direction to get us a report in 2012 and tell us what happened."

Yet after that report, PUC never submitted another to the Legislature, he said.

Anchia: We required you to prepare annual reports on ERCOT's performance. Have any of those reports ever raised performance questions?

Walker: Not to my knowledge.

Anchia reading PUC sunset bill. lrl.texas.gov/scanned/hroBil…

"HB 1600 would provide clear legislative direction and resolve many of the questions about PUC's ERCOT oversight. Altho current law gives PUC significant oversight over ERCOT, the PUC has not always fully embraced it."

Anchia: "When did you make your clarion call to the public that we had a major problem + that ppl were likely to die?"

Walker: "I believe we started sending things out Thursday or Friday, but in those words, not as major of a comment as you're talking about."

Anchia: "You're not the Private Utility commission. You're the Public Utility Commission."

Walker: "I don't disagree with you. I was calling private industry to try to figure out how to keep the power on."

Anchia asks if Walker thinks she did her job.

Walker: "I think I made errors in doing my job."

Anchia: Have you sent out a public apology?

Walker: I have not sent out a written one, but I have made public apologies.

Anchia: Where?

Walker says during public meetings.

Lucio asks Magness when he knew blackouts wouldn't be rolling. Magness says Monday. Lucio says stakeholders should let public know.

Magness: "That was a failure to pivot fast enough to communicate that to the public."

Lucio now asking about ERCOT press releases/social media presence.

"It was all about conservation and it was done so in a playful way that I think could have misled the public about the severity," he said.

Like this one:

https://twitter.com/ERCOT_ISO/status/1361094672001732616?s=20

Lucio: But you did change the way you referred to the outages. From "rolling" to "controlled."

But the avg person, the general public, could not appreciate that and make an informed decision about what to do with their family, he said.

Lucio asks if Walker will implement emergency management plan requirement as intended by Legislature.

Walker said she committed earlier today that she would do that.

Darby asks if Walker is familiar with HB 1342.

"No sir."

Darby: "Deliberations of a public utility commission of Texas ... relating to a security threat, disaster or energy emergency."

Darby: Do you think this last few wks have been an energy emergency?

"Absolutely sir."

Darby expressing his disbelief that commissioners were running around not talking to each other, not knowing this law was on the books.

"Don't you think it's your job to know that? Don't you see that's a failing of your responsibilities as a public utility commissioner?"

Darby asks how much money is owed to ERCOT for this winter event. And asks witnesses to explain the settle-up procedure and "uplift process."

Magness: On front end, we have ppl give us collateral to secure obligations going to have on the market. Fluctuates based on risk.

Magness: ERCOT sends out invoices. If they're not paid, have to balance out that market one way or another.

We sent out invoices this week that totaled $9.5B. Enormous amount of outstanding obligations out there. Hearing from market participants that some may not be able to pay.

Magness: "We are running into a very big issue on the financial side bc the magnitude of the money that was generated and owed."

Could lead to operational issues for generators.

"We are looking for ways to manage that ... We're trying to find a credit facility or something."

Magness says this credit facility fix would happen in the next few days.

Darby asks who is going to backstop that credit. Magness says he's talking to the "money people" about that.

Magness: "We don't know exactly who's going to pay ... So that's what we're working on now is seeing what invoices get paid, who's short-paying and trying to manage those situations as best we can with whatever resources we have."

Hunter asks Magness how much he gets paid.

Magness says $803,000 last yr.

"Who pays that? What's the source of the money?"

Magness: "Ultimately, the people who pay electric bills."

Hunter: Did ERCOT fail to do its job?

Magness: "We did not fail in that we prevented a blackout; otherwise there were many failures in the process of keeping the system away from a blackout."

Hunter pushes him to answer yes, no or "I don't know."

Magness: I'd say given the damage that was done, I can't call that a success.

Hunter: "So it was a failure."

Hunter says constituents don't have much confidence in PUC/ERCOT bc they're viewing this as them being pro-utility and not pro-consumer.

Would you make an effort, I'd like to meet y'all. I'd like to be kept up to date.

Reynolds: "The 4.3 million Texans that lost power, over 14 million people who were without quality water, deserve answers to what happened."

"We lost humans. This is about public health and safety." Naming children of the Nguyen family in Houston who died in house fire.

Howard says she "continues to be astounded" by things, such as learning about the uplift situation that is "frightening, quite frankly."

Says she's proud of her colleagues for looking at this in a very serious way.

Oscar Longoria, D-Mission, asks what PUC is investigating regarding customer complaints about high bills.

Walker said looking into whether companies who do index pricing made the appropriate, legally required disclosures. If necessary, they'll revoke licenses.

Harless asking about weatherization bill again. Asks why no further reports were filed after 2012.

Walker: "The person responsible for it left the commission, and no one else picked that up, and that's a failure on our part."

Deshotel asks whether retail providers have to submit an application + describe products.

Walker: No, they don't provide their products to us. We have known about Griddy. I know we've reviewed them before ... My staff's come to me and told me had some concerns about language.

Herrero asks if Gov. Abbott has asked for PUC Chair Walker's resignation. (Republican Reps. Jared Patterson and Jeff Leach have so far.)

Walker: He has not.

Slawson asks where Magness was when first loads shed.

Magness: In control room w/ 7 grid operators, 2 supervisors, director of system operations.

"Who decided to shed that first 1,000?"

"Chief operator is one who has call. Made in discussion with other operators on the shift."

Slawson says she noticed on Feb. 17 that ERCOT web page had removed identities of board members and asks why.

Magness: "When I learned of that, that error was corrected." Says ERCOT employees and board members had received death threats. Security team had concerns.

Slawson says threats are never acceptable and asks if they were reported to law enforcement. Magness said yes.

Paddie says chairs asked lawmakers not on the committees to submit questions they wanted asked. He says he's been making sure they were covered.

Asks Magness when he gives order to shed load, does TDU have option to ignore?

Magness: No, federal reliability rules cover that.

Paddie asks if PUC approves retail providers.

Walker says yes, they go through a process where PUC looks at financials to make sure no criminal bckgrds. Do not present to us -- can change this -- what plans they're going to put in. Plans can change on continual basis.

That's all for tonight, folks. Recessed until 9 a.m. Thanks for following!