(Bloomberg) – Texas lawmakers’ attempt to understand why the state’s power system failed last week sparked many blame but few clear answers on how to avoid a similar crisis in the future.
In two hearing marathons on Thursday, lawmakers questioned the state’s biggest energy suppliers, their network operator and regulators about the blackouts that left more than four million homes and businesses without heating, light and water during a deep freeze in the Winter.
Calpine Corp. executives, Vistra Corp. and NRG Energy Inc. blamed the shortage in the supply of natural gas, the disturbances of the network and the lack of communication from the network operator known as Ercot. Ercot, for its part, said it simply followed the rules and guidelines set by the Public Utility Commission, which in turn said it had no authority to tell Ercot what to do.
“This is the biggest train accident in the history of deregulated electricity,” said Republican Senator Brandon Creighton.
The historic disruption caused up to $ 129 billion in economic losses, and the impact for individual companies is just beginning to emerge. Some electricity providers have caused huge losses, fueling a possible credit crisis. Oil and gas producers saw their production halted. And dozens of people died.
High voltage transmission towers in Houston, Texas.
Photographer: Justin Sullivan / Getty Images
Calpine, Vistra and NRG said the shortage of natural gas has affected its ability to operate. Not only did the freezing climate interrupt the production of gas, but the blackouts ordered by the Ercot network operator aggravated the power cut in the pipelines. The companies also said that the plants were forced to shut down after the flow of electricity on the grid – called frequency – dropped. This contradicts the version of the events presented by Ercot.Vistra and NRG’s executive directors said their companies would not pass on the event’s high energy prices to their customers. Ercot anticipated that blackouts would be possible four to five days before the network emerged. Calpine’s CEO, however, said he was not warned that a network emergency was possible.
All Eastern time.
Power outages, main cause of oil and gas closures (19:38):
The state’s top energy regulator said power cuts were a bigger problem for oil and gas producers than ice.
Although some wells were preventively closed as a safety measure, “repeatedly, the number one problem we heard from operators was the lack of power at their production sites,” said Christi Craddick, president of the Texas Railroad Commission. “The oil field simply cannot function without energy.”
Neither the Public Utility Commission nor the network operator understood how interdependent the gas and energy industries were, she said.
Utilities regulator detonated by legislators (18:00):
The Texas public service watchdog received scathing criticism from senators for denying any responsibility for last week’s disaster.
“I would say that you are choosing not to leverage the authority that we are giving you and that is a serious problem,” Sen. Creighton told Public Service Commission chairman DeAnn Walker, after she refused to offer suggestions on how the market the state’s energy system should be reformed.
CenterPoint says rotary interruptions were impossible (17:50):
Rotating outages became impossible within an hour after blackouts were ordered, due to a lack of supply, said CenterPoint Energy Inc. executive vice president Kenny Mercado.
Going to the event, “we were confident that we could achieve a dynamic approach,” he said. “At 2:24 am, we were no longer able to alternate customer interruptions.”
The company cut power to 1.4 million customers at the peak. Two substations have skyrocketed due to underfrequency, Mercado said.
$ 9,000 energy price required for computer failure (4:40 pm):
The $ 9,000 megawatt-hour price limit imposed during the energy crisis was necessary to ensure that all available generation was offered to the grid, Texas Public Utility Commission chairman DeAnn Walker told lawmakers.
That price cap should be applied whenever there is a load reduction event, she said. But a computer failure in Ercot’s system was reducing the price, as the network operator accumulated reserves to stabilize the network on February 15. This lower price was discouraging gas generators from making offers.
“The signal was being sent to dispatch that there was enough generation in the system,” said Walker. “When these signals were being sent, the generation was backing down.
However, she said the state needs to review whether the price cap should be kept so high for so many days.
Ercot has seen potential blackout days before (15:40):
Network operator Ercot anticipated that blackouts would be possible four to five days before the network’s emergency occurred, CEO Bill Magness told lawmakers.
The modeling indicated that the state could have a power shortage on the morning of February 15 and 16, he said.
An energy-saving warning was issued publicly on February 13, according to an Ercot report presentation. A blackout alert was issued on February 14, hours before the interruptions began.
Calpine says he was not warned about blackouts (15:15):
Calpine’s CEO Thad Hill said the Texas network operator had not warned the company in advance that a network emergency was possible.
“When I went to bed on Sunday night, I felt that we were in good shape,” he said. He also said he was not aware of any plans to switch from continuous blackouts to controlled blackouts. “Nobody communicated to us directly about this.” As a result, Calpine was unable to notify customers in a timely manner, he said.
Vistra, NRG say that costs will not be passed on to customers (13:29):
Executives at Vistra and NRG said their companies would not pass on the event’s high energy prices to their customers. The increase in gas prices during the event offset the revenue from selling electricity at the $ 9,000 megawatt hour ceiling, they said.
“There has been a significant transfer of wealth from energy to gas,” said Curt Morgan, CEO of Vistra. “We are the guy sitting in the middle, taking both ends.”
Problems supplying gas powered interruptions (12:27 pm):
Calpine, Vistra and NRG said the gas shortage has affected their ability to operate. Not only did the freezing climate interrupt gas production, but the blackouts ordered by Ercot aggravated the problem, as power was cut duct compressors needed to transport fuel to power plants.
“If natural gas is compromised, the energy system will also be compromised,” said NRG president Mauricio Gutierrez. Although NRG contracted the supply of gas, the low pressure in the pipelines that feed the system affected the company’s ability to operate the plants within capacity. Vistra’s Morgan said that despite having 90% of the plants available to work, “we just couldn’t get the gas.”
Calpine’s Hill said in a written statement that the company lost a gas unit after a gas supplier lost electricity. He said later that the company lost 40% of its gas supply on Tuesday, after blackouts were ordered.
Network operator, generators disagree about network problems (11:12 am):
Vistra, Calpine and NRG said the plants were forced to shut down after the flow of electricity on the grid – often referred to as power – dropped during the morning of February 15, when blackouts were first ordered. His comments contradict the version of events presented by the Texas Electric Reliability Council, known as Ercot, which manages most of the state’s electricity grid.
“We looked at it, we didn’t see it,” said Ercot’s Magness in testimony before the Texas Senate. If the plants went offline in conjunction with the fall, it would be only about 10 units, a number decreased by the total that was offline due to weather and gas supply problems, he said.
Keeping the frequency around 60 hertz is essential to maintain the stability of the network. Ercot operational protocols Let’s say that a deviation of 0.2 hertz “over a long period” can damage the generators and the customer’s equipment. On the day of the blackouts, the frequency dropped to 59.4 hertz for 4 minutes and 23 seconds, according to an Ercot presentation. It dropped to as low as 59.3, according to Bloomberg data.
NRG’s Gutierrez said the crash “threatened the majority of the fleet,” but in the end it only caused a plant to go offline. Calpine’s Hill said in written testimony that two of the company’s natural gas-fired plants shut down for the same reason.
Vistra was three minutes from losing the Comanche Peak nuclear plant because of the low frequency, said Morgan. “We came dangerously close to losing the system,” he said.
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