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How far the Texas power grid has come after the deadly February 2021 storm

Lawmakers told two state agencies to fix the grid. One made changes while the other dragged its feet. The KVUE Defenders found it left us with only patchwork.

AUSTIN, Texas — “All of this was ice,” Joe Galvan of Pflugerville said.

Galvan pointed at a slow-moving stream near his home. His home, like many around Texas, had no power for nearly a week during the February 2021 winter freeze.

“As much as we knew to get ready for, we got ready for – you know, wrapping pipes, trying to bleed faucets, stuff like that,” Galvan said.

The house hit 40 degrees on day one.

“That first night without power was really terrifying,” Galvan said.

On day two, Galvan, his wife and children went to a friend’s home.

“I had insulin that I had to try to transport,” Galvan said.

Insulin requires refrigeration. 

Galvan wasn’t alone. A Texas Department of State Health Services report shows the storm and power outages killed 246 people. Twenty-five people died because the medical equipment did not have power, while 161 froze to death.

The power was cut on purpose.

'Load shed'

Electricity works through frequencies. The power at our homes must stay at 60 Hertz (Hz). If demand peaks, the frequency drops. If frequency drops below 59.4, power plants automatically shut down or machines break.

The Electric Reliability Council of Texas (ERCOT) told lawmakers they have nine minutes to get the frequency back or the entire grid falls. It would lead to total blackout for most of the state. It would take weeks to get back running.

ERCOT manages the power grid. It orders what’s called a “load shed” when frequency starts dropping too low, telling utility companies to cut a certain amount of power and causing a blackout to some homes.

The idea is to rotate it, share the burden of the blackouts.

RELATED: What is a 'load shed' event?

But in February 2021, the amount of load shed needed made it impossible for some areas to rotate. Blackouts lasted days.

“Feels like we're just waiting for the next one, and it's horrifying to think how many more people are going to die because of inaction,” Galvan said.

Lawmakers had the chance to fix the power grid more than a decade ago. A storm in February 2011 left millions without power for days.

This 2011 federal report recommended weatherization standards like adding windbreaks and having portable heaters ready. It showed Texas needed more energy in reserves. The lawmakers didn’t listen and passed weatherization bills with no enforcement power.

This February 2021 storm hit as the 87th legislative session began. The politicians got another chance to make it right.

Blame went all around. Natural gas companies pointed to power outages for dropping production. The power producers blamed natural gas not delivering needed supply.

How electricity flows in Texas

Most of the State’s source for electricity comes from natural gas, 46% in 2020.

From the field, natural gas goes to processing plants. There elements, like water and other compounds, are separated.

Then pipelines take the gas to power plants. Those plants, known as generators, convert the gas into electricity.

Transmission lines take the charge through substations to the local distributors (utilities) to run power to your home.

In a deregulated area, the cost for electricity goes through a middleman – a retailer.

Other sources have more direct ways to get power on the grid. Wind turbines produce power in the field and send it straight to the grid. It’s not as predictable as natural gas and the storage infrastructure isn’t as large as the natural gas industry.

Investigators and researchers  found weatherization to be the biggest issue in the February 2021 freeze.

Gas well heads froze before the storm began. Then, clouds and snow crippled solar. Wind turbines froze. When power plants went down, natural gas production took another crippling blow.

'A downward spiral'

“Trying to keep my wound clean was really hard,” Galvan said.

Joe was in recovery when the storm hit.

“I had just had my thyroid removed like three months before,” Galvan said. “They caught it early enough that whenever they removed the thyroid, they were confident. They removed everything that was cancerous.”

“There had been a wellness check done and that an elderly couple had passed away in their home,” Daniela Silva, Community Resilience Trust (CRT) volunteer, said.

CRT works with nearly 100 other area community organizations. It found hotels for the homeless and offered food and help to anyone in Austin.

On a call with the organization, Silva heard of two confirmed deaths tied to the storm.

“It feels like you didn't do enough, that you didn't move fast enough, that you didn't get enough volunteers out, that you didn't do enough wellness checks,” Silva said.

“It was a downward spiral of gas failure. As gas failed, it caused a power failure and caused a bigger gas failure. It caused a bigger power failure. So if you don't have that first gas failure, you can keep the gas flowing more readily,” Dr. Michael Webber, Ph.D., Josey Centennial professor in energy resources at the University of Texas at Austin, said.

Energy companies cash in

Reports show the storm cost Texans $130 billion. But those who sold natural gas made billions.

Energy Transfer made $2.4 billion off the storm, calling it “favorable market conditions” in SEC filings. Kinder Morgan broke its own profit expectations.

“We closed out 2021 as a record year financially, beginning with our outstanding commercial and operational performance during Winter Storm Uri,” KMI Chief Executive Officer Steve Kean said in a federal filing on the company’s fourth-quarter earnings.

“For the full year 2021, KMI reported net income attributable to KMI of $1,784 million, compared to $119 million in 2020; and DCF of $5,460 million, up 19% from $4,597 million for the comparable period in 2020. The increases compared to the prior period are primarily related to KMI’s strong performance during the February winter storm and are therefore largely nonrecurring,” the filing showed.

Meanwhile, federal reports show gas sellers marked up the price of its raw fuel by 500%. Legally, it’s allowed. Neither the federal nor state government have a price cap on natural gas.

The U.S. Energy Information Administration showed natural gas hit its highest price since February 2003.

“If the gas system had not fallen, we would have had some blackouts, but not as many and not as bad and not as long,” Webber said.

Power, unlike natural gas, does have a cost cap. During the storm, ERCOT allowed power to sell at $9,000 per MWh. It was an incentive to get power on the grid as fast as possible.

When the blackouts stopped, ERCOT allowed the max charge to stay for an additional 32 hours.

Potomac Economics, PUC’s Independent Market Monitor, wrote that those extra max-rate hours put an extra $16 billion on the backs of anyone who pays an electric bill.

“We got to change the way we look and we think about these things," Craig Nazor, Sierra Club Lonestar Chapter conservation chairman, said

He wanted lawmakers to prioritize energy efficiency, keep costs low for consumers and reduce power demand.

“The extremes, both ways are going to get wider. So even though as the temperature gets hotter, cold spells are going to get colder,” Nazor said.

Legislative changes

The Legislature didn’t cover energy efficiency. During the session, lawmakers learned some ERCOT board members didn’t even live in Texas. Now, everyone on the board must be a Texas resident.

Lawmakers passed legislation to allow indebted utilities to get a long-term bond and pay off the debt incurred with the $9,000/MWh charge during the storm.

A new team made up of PUC, Railroad Commission of Texas, Texas Division of Emergency Management and ERCOT will map out all critical power plants, natural gas facilities and lines connecting them.

PUC filings show the map may be ready before the required September 2022 due date.

Senate Bill 3 put the responsibility for fixing the grid mostly on the Public Utility Commission. The PUC created winterization rules and determined penalties for power plants, transmission lines and utility companies. The law allows penalties to range between $5,000 to $1 million per violation per day.

“We implemented more reforms in a short amount of time than any other grid in the U.S. So there's absolutely no stone we left unturned,” Peter Lake, PUC chairman, said.

Gov. Greg Abbott appointed Lake two months after the storm.

“The market reliability piece is being implemented over time over the next several years. But most importantly, the operational reliability is in place now,” Lake said.

PUC made the 2011 weatherization recommendations become a requirement. PUC also required facilities to fix “cold weather critical component failures” and do monthly winter testing from November through March.

Power plants, transmission operators and local utilities had to submit a sworn affidavit showing a weatherization plan was in place. Eight companies didn’t. The fines totaled $7.5 million.

ERCOT checked 324 facilities in December. Inspectors found most power plants, transmission operators and utility companies did the work.

ERCOT’s final report to commissioners shows power generators who didn’t have winterization in place but proved a good cause would get an extension.

“A large number of the assertions reflect that certain requirements do not apply to the Resource based on its technology – for example, many wind generation owners have asserted good cause for non-compliance with the sub-requirements to confirm operability of air moisture prevention systems or to install wind breaks at the facility because these improvements are not relevant to wind turbines,” the report shows.

Supply and demand

Part of the reason the grid failed was because of how the electricity market runs off supply and demand. Companies make more money when the supply stays as low as possible.

When power supply is low, ERCOT offers an incentive. Power companies can sell higher than market rate.

PUC lowered the price cap from $9,000/MWh to $5,000/MWh creating a phased-in incentive pay increase. Instead of operating at the supply and demand limit to trigger the max rate, power companies get paid extra for power as supply starts declining, before power is considered “scarce” by state standards.

“We want to stay as far away from crisis as possible,” Lake said.

The PUC doesn’t regulate natural gas companies but needs to know the fuel will be available when the demand spikes.

“First off, we established reliability in the operations of the marketplace. That's the extra margin of safety, real-time reserves in response to volatile weather. That's never been in place before. We’re operating with abundance of caution. We're enhancing communication between PUC operationally and with our generators. That was not in place before. That operational enhancement for reliability has already happened. The second part of that is the market reforms. That's building in firm-fuel incentives for our generators. That's building in reliability requirements for retailers to have on-demand electricity for the first time ever. So the retail companies that send you a bill for electricity each month will be for the first time ever responsible for ensuring that that is on-demand electricity,” Lake said.

The firm-fuel contracts between retailers and power generators may take years to implement, Lake said.

“We're in the process of building that out. ERCOT will validate an audit that each retailer has gone out and bought the power they need in advance from a reliable source – not just hoping that the wind blows or the sun shines – that it's a reliable on-demand provider source of electricity so that the end customer knows that in the peak times of peak demand, they will have the power they need to power their lives and businesses,” Lake said.

Lake said this could expand the marketplace for renewable electricity.

“We anticipate that this will be a huge economic incentive for any technology that's reliable: batteries, hydrogen, geothermal, hydro. It's important to note that the commission focused on a reliability standard, not a particular technology or a source of power,” Lake said.

Natural gas industry

The Railroad Commission oversees the Texas oil and gas industry.

Those Commissioners have not created weatherization plans for natural gas companies. They won’t until the commission knows which company is critical to the grid.

The Railroad Commission will require only the critical infrastructure to be weatherized.

“It would be kind of ignorant for us to go out and set weatherization standards unless we figure out where these facilities actually are that are feeding that gas to electrical generators … not all these facilities are the same,” Jim Wright, RRC commissioner, said.

The Railroad Commission website shows inspectors did look at companies voluntarily prepping for winter. They looked at nearly 76% of all storage facilities, the website shows.

Inspectors visited facilities covering “nearly 22,000” active gas wells. The RRC website shows Texas had 84,668 gas wells in January 2021.

The KVUE Defenders asked Wright why the commission didn’t require all facilities to weatherize.

“It's going to be different. I think geographically for Texas, when we go to define and adopt those, and I think that's why I'm mapping is so critical in that,” Wright said.

Wright was without power for days. Medical conditions in his family kept them homebound during the freeze.

“I can tell you firsthand that I don't want to go through that again, and I don't want anybody else in Texas to go through that again,” Wright said.

Wright wants the State to consider a State-managed natural gas storage program.

“Just make sure we put gas back in in the event of circumstances like this,” Wright said.

Todd Staples with the Texas Oil and Gas Association echoed the need for storage. He lobbies for the oil and gas industry.

“Even with the best standards in place, there's going to be outages,” Staples said.

Staples said storage closer to populated cities would reduce the chance of losing gas pressure. Gas loses pressure over distance. Companies use compressors along the route.

During the storm, pressure dropped when a wellhead froze or a compressor’s electricity got cut.

Staples said most gas wells are unmanned. Many are in remote locations. If a wellhead freezes, he said, it may take hours to respond.

“Our companies have realized that we might need to pre-positioned some personnel closer to our facilities. And so a lot of them are taking on additional expenses and having personnel pre-positioned before a storm comes in,” Staples said.

“We need the gas system to have good winter reliability also, and clearly we don't have that, so we need to invest in that,” Webber said.

The Railroad Commission expects to have weatherization standards in place by March 2023.

“I'm hoping to see that [critical infrastructure] map a lot sooner than September. So it gives us the ability to start setting those weatherization standards that legislation is requiring us to do,” Wright said.

We asked Galvan and Silva if they had questions for Chairman Lake.

Erica Proffer, KVUE Defenders: So I'll start with Joe. He asks what's being done to protect Texans lives because what's at stake is human lives. If you were sitting in their seat what would you do?

Peter Lake, PUC Chairman: Joe's right. This is about lives, this is about homes and families keeping the lights on and keeping them warm, and that's why we've made such big moves so fast. We've winterized the grid. We've built in more reserves and we're operating ERCOT in completely the opposite manner than what it was previously by moving away from a crisis-based business model that benefits companies to a reliability-based business model that is focused on individual Texans and ensuring they have electricity.

Erica Proffer, KVUE Defenders: Daniela asked what do you or plan to do to ensure that your system, which is supposed to be created reliably for the people of Texas, is actually the case moving forward? How will you and ERCOT be held accountable to?

Peter Lake, PUC Chairman: She can take comfort knowing that we've already done it. We've changed the operations to ensure that our grid is reliable and again got away from the crisis-based model that had been in place before and completely reoriented the way the market works so that we get more generation on [the grid] sooner. We have more reserves as a backstop, just in case. We're using more conservative projections of weather and forecasts. It's all of these factors combined, in addition to the winterization requirements for our generators that were in place last December. We didn't waste any time. We got on top of it, so we would know our generators or winterized and hardened for this winter. And they meet and exceed federal winterization standards.

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