Texas lawmakers grill power grid officials over winter readiness
AUSTIN, Texas — Months after the law requiring all electricity utilities to weatherize their plants went into effect, Texas state senators want to know how close companies are to being compliant with the new regulation and barraged industry officials with questions over this during a committee hearing Tuesday.
The new law, Senate Bill 3, went into effect immediately after Gov. Greg Abbott signed the bill in June.
Now, all electricity generators and providers, as well as natural gas facilities and pipelines in the state, must take measures to ensure their plants are able to operate under extreme weather conditions - what's known as weatherization. Violations of this law could result in a penalty of $1 million per day. Facilities that experience weatherization failures will have to get a third party to assess their plans and procedures.
Texans and state lawmakers pushed for these new requirements after the February winter storms caused statewide blackouts that killed an estimated hundreds of people.
It did not take long for tense moments to take over the question-and-answer period between committee senators and new Public Utility Commission of Texas - or PUC - Chairman Peter Lake.
State Sen. John Whitmire, D-Houston, and Lake had the following exchange:
Whitmire: "Could you show us some weatherization taking place today if we were to get up and go on a field trip? Who's weatherizing as we talk today? Because that's what the constituents I represent want to know."
Lake: "You'll be heartened to know that the 'better be' part has a deadline of December 1st. [ERCOT Interim President and Chief Executive Officer Brad Jones] can speak to the new inspection teams ERCOT is standing up. The deadline is December 1st, so we're not inspecting anybody yet."
Whitmire: "For the record, December 1..."
Lake: "The requirement will go into effect."
Whitmire: "Not the plan, I'm talking about getting ready for the winter was what I was focused on when I got here this morning. So, where's it taking place right now?"
Lake: "I'm sure the generators when they're up can speak to the efforts they're undertaking now."
Whitmire: "You're in charge. You oversee it."
Lake: "After December 1st, we're sent with a deadline when those changes need to be in place. We're sending Brad and his inspectors into the field to ensure if it's heat tracing on pipes, if it's wind breaks in front of air intakes, whatever it is..."
Whitmire: "If they haven't done it, they pay a couple million dollars a day. So what?"
Lake: "Well, on a billion-dollar plant..."
Whitmire: "I want the weatherization to be demonstrated as we sit here today, if that's possible."
During the peak of the outages, almost half of the state's generation was thrown offline due to the extreme cold. This resulted in around 70 percent of Texans losing power, according to a report from the University of Houston.
Before this bill and during the February storm, plants were not required to be weatherized. Instead, the Public Utility Commission of Texas and ERCOT could only make recommendations - and perform spot checks to see if plants are following their plans - but could not levy punishments if these plans were not followed.
"Our current system has been criticized for prioritizing low-cost energy over long-term reliability," said state Sen. Charles Schwertner, R-Georgetown. "As we witnessed last February, and again this summer, this system is prone to dependability issues during periods of extreme stress. It's clear that failing to invest in our grid infrastructure and reliability is a choice Texas can no longer afford to make."
During committee hearings immediately after the storms, since-ousted ERCOT CEO Bill Magness said the power grid was less than five minutes away from blackouts that could have lasted weeks or months.
In addition to requiring weatherization, SB 3 establishes an emergency alert system providing power outage alerts to Texans.
However, ERCOT had to call on Texans to conserve energy just a week after Abbott signed SB 3 into law in June because of a combination of extreme heat and an unexpected number of plants offline during repairs.
Senators did not miss an opportunity to question the efforts of companies and new ERCOT and PUC leadership during Tuesday's hours-long hearing.
"I'm certain we can agree we need to get to a reliable supply of energy, which I want to bring up later today. I'm not so sure we're better off with that reliability today than we were last February," Whitmire said. "I would suggest - using your judgment - we [check on the status of weatherization] monthly or as often as necessary to hold people's accountable. Where are we in weatherization? Where are we in reliability? So we don't have to answer to our constituents next winter because we were not prepared."
The power grid became one of the few bipartisan efforts in a legislative session otherwise marred by bitter partisan fighting.
State Sen. Robert Nichols, R-Jacksonville, followed up Whitmire's comment.
"We're worse off now than we were ten years ago," Nichols said.
Lake responded to these concerns with a more optimistic tone.
The new PUC chairman said ERCOT has bought more energy reserves, which increases the margin of safety.
However, Lake said the most important change since February was the more proactive approach they're taking in situations that could become emergency conditions.
"In the past, ERCOT was directed not to take any out-of-market action until the very last minute when the grid was right on the precipice of emergency condition. We've turned that on its head. Now in the summer, Brad and his team have taken out-of-market action earlier and sooner to make sure in cases of scarcity we have every generating asset that we need operating sooner rather than later," Lake said. "The bottom line is we will be going into this winter with a more resilient grid than we had last winter."
