Cold temperatures blasted Texas this month, revealing strains in the natural gas system and offering a reminder that the state remains vulnerable to blackouts.
Texans’ power mostly stayed on, but many observers said they’re worried the state still isn’t ready for the sort of prolonged freeze that arrived last February and caused deadly blackouts — and forced the state to consider a major revamp of the electric grid.
“When it comes to weather disasters, we have a bad habit of not learning from them,” said Eric Berger, the editor of a Houston-focused website called Space City Weather who said he’s “not convinced that we’ve taken the steps that we need to mitigate against a future disaster.”
Early January raised concerns even without extreme conditions as gas producers reduced output and flared fuel they couldn’t use. Pollution increased as nearly 1 million cubic feet of gas was wasted or burned because of weather-related shutdowns, according to Bloomberg News.
Alison Silverstein, a Texas-based energy consultant, said the grid operated by the Electric Reliability Council of Texas (ERCOT) is in better shape than last winter because of work to bolster weatherization of power assets.
But she said the energy industry and its regulators have not fixed problems tied to spiking power demand in cold weather and utility setups that in many cases didn’t enable controlled outages to rotate among customers in February.
Silverstein named several areas of concern after the recent cold spell — from gas supplies and gas-fired generation to load forecasting and communications with the public.
“It is highly unlikely that ERCOT’s generation fleet will be able to meet” super high demand if gas supply facilities are not weatherized, Silverstein said.
ERCOT and the North American Electric Reliability Corp. also warned in November that grid conditions in Texas and elsewhere could again deteriorate in extreme circumstances (Energywire, Nov. 22, 2021). More than 4 million homes and businesses lost power for hours or days last February in Texas. And over 240 deaths in the state were associated with the 2021 winter storm, according to a Texas report.
It doesn’t take historic events to knock out power to at least some customers given factors such as ice, cold and wind. There also are issues grid operators can’t control, including how much wind energy is generated on a cold day.
Gov. Greg Abbott, a Republican who’s up for reelection in 2022, made a guarantee about the lights staying on to an Austin TV station in November. Peter Lake, chair of the Public Utility Commission of Texas (PUC), made a similar commitment during a Dec. 8 news conference.
Yet Renae Eze, press secretary in the governor’s office, said in an emailed statement that there is “always the possibility of outages from downed power lines and other operational issues that local energy providers face, including outages outside of the ERCOT system that stem from localized issues.”
Eze said the governor’s office is “working with the PUC and ERCOT to protect critical power infrastructure and increase power generation to ensure the reliability of our electric grid.” Lake has noted that the PUC is in the midst of making long-term market improvements to ERCOT, adding that it will work with other regulators on mapping critical natural gas infrastructure in the state.
Here are five areas to watch with Texas electricity as the state moves through winter:
1. Natural gas supply
Questions about natural gas supplies have remained front and center since February’s devastating outages in Texas. ERCOT last year showed that natural gas had the most generation capacity unavailable in its footprint during the February winter storm of any single resource, though power sources across the board had failures.
Documents obtained by E&E News last year showed how Texas’ electricity leaders were focused on gas shortages days before blackouts crippled the state (Energywire, May 20, 2021).
Critics complained that state regulators weren’t acting strongly enough given widespread gas problems. Members of the PUC and the state Railroad Commission (RRC) — which oversees natural gas suppliers — pushed back (Energywire, Dec. 1, 2021).
“In conjunction with the Railroad Commission, we passed a rule that designates critical natural gas infrastructure so that we know we will have the most important natural gas facilities across the entire natural gas supply chain flowing gas this winter,” Lake said in December.
The group Commission Shift, which seeks changes at the RRC, said in a Nov. 30 statement that the commission strengthened requirements for gas facilities to weatherize in the future. But, noting various actions that still must occur, it said the RRC hadn’t prepared Texas for this winter.
And early January raised more questions about what gas suppliers have done to get ready in Texas.
But Andrew Keese, a spokesperson for the RRC, said via email that media reports beating “warning drums of a dire situation with the state’s natural gas production” earlier this month were incorrect.
“Power stayed on, lights were on, and gas kept flowing to residents,” he said.
Todd Staples, president of the Texas Oil and Gas Association, said in a statement last year that best practices and techniques as well as continuous power “are extremely important” to making sure electricity remains on if Texas sees another emergency.
In a statement this month, Staples said “some variation in production occurs with sudden temperature changes — these are field operations, not controlled factory settings.” He said gas production and storage capacity provide “access to far more product than the typical” amount needed for daily power generation in Texas.
Still, a group called Texas Competitive Power Advocates called out the oil and gas group on Twitter recently, arguing that gas “needs commensurate winterization requirements to those required of generators.”
And it added in different tweet: “Failure to perform should have [the] same transparency for both industries.”
In its own statement, ERCOT said the power grid “performed reliably during the first week in January.” But the grid operator said “some power plants had full or partial outages due to fuel limitations,” and it has sought to find out more about what happened.
2. Winterized power plants
The PUC approved new winterization standards for power plants ahead of this winter, with a second phase of weatherization still planned.
“Texans can be confident the electric generation fleet and the grid are winterized and ready to provide power,” Woody Rickerson, vice president of grid planning and weatherization at ERCOT, said in a Dec. 30 statement. “New regulations require all electric generation and transmission owners to make significant winterization improvements and our inspections confirm they are prepared.”
Rich Parsons, a PUC spokesperson, said in an email to E&E News that ERCOT filed a preliminary report last month “showing [that] of the 302 generation resources inspected for compliance with the first-ever winter weatherization requirements," just 10 "had items identified on the day of inspection that required correction." ERCOT has said that the 10 were operational and that some issues have been corrected.
Last month, of 846 readiness reports received by the close of business on Dec. 9, the PUC said 244 sought a good cause exception. But the PUC said a preliminary review suggested that didn’t mean 244 generating units were wholly unprepared for the winter peak period. The PUC also said companies aren’t excused from compliance if they seek an exception.
“They have to provide specific reasons they are unable to meet the rule, including a plan for how they will bring themselves into compliance,” the commission said in a news release. “PUC and ERCOT staff will continue to review the reports to determine which facilities will meet the preparation requirements.”
Also last month, the PUC announced that a number of generation companies failed to provide winter weather readiness reports by a Dec. 1 deadline, leading commission staff to document violations. All of the readiness reports have now been filed, according to the PUC.
Lake has said violating winterization standards could lead to penalties of up to $1 million per day per incident. More details are expected today on how winterization efforts are going, though hundreds of resource units in Texas have already indicated they’re in compliance with requirements.
“I join the good people of Texas in thanking the industry for doing their damn jobs,” Silverstein said.
But Ed Hirs, an energy fellow at the University of Houston, said weatherization efforts at power plants in the ERCOT region may not all prove to be effective. Hirs also said he remains concerned about potential power market manipulation under the current ERCOT market structure.
Daniel Cohan, an associate professor of civil and environmental engineering at Rice University, said less has been done to winterize the gas supply or to try to lower electricity demand than to weatherize power plants.
“So, we can expect that power plants would hold up somewhat better if there’s another severe freeze, but just how much better and whether they’d have enough gas to burn remains to be seen,” Cohan said via a Twitter message.
3. Coordination
Texas leaders are adamant that the natural gas and electricity sectors are talking together in new ways. That includes making sure gas facilities have the power they need.
The Texas Energy Reliability Council (TERC) is up and running to enhance communication and planning among state agencies and the power and natural gas industries, according to Lake. Its members come from across the industry, representing everything from power generation to transmission and distribution to retail to solar power.
Lake said representatives from ERCOT, the PUC and other agencies also will work shoulder to shoulder to make sure agencies and industries have a central point of communication.
But Silverstein said gas and electric coordination could still be a challenge this winter. Also, there are questions on how far coordination can go in resolving problems.
“It is unclear that superficial conversations at the regulator level will have any meaningful difference on effectiveness of coordination at the working level between gas suppliers and gas marketers and gas delivery entities and power plants,” Silverstein said. “Let’s face it: Day to day, year to year, it’s the contracts that rule.”
Pat Wood III, who is a member of TERC, said coordination has improved even if it remains a work in progress.
“It’s like the weatherization of power plants,” he said.
Wood also said the power industry has been working to have sufficient liquid backup fuel on-site at some plants to help offset concerns about the reliability of the gas supply system. But questions remain about the extent of that backup.
A number of power generators also have moved to firm up gas storage and delivery, according to Wood. Having multiple solutions helps enhance reliability, he said.
4. Grid operations
The PUC and ERCOT have changed how Texas’ main power grid is operated, and leaders say a conservative approach is making a difference.
“As we did this summer, we will continue to operate with a margin of safety and enhanced reserves in addition to having reserves available to call in response to real-time conditions,” Lake said last month.
There also has been a move to shift the biggest demand response electricity conservation program to earlier stages of emergency conditions, Lake said. That means, he said, using every possible electron before asking Texans to change their consumption.
More changes are expected in the design of the ERCOT power market, which the PUC is discussing in an ongoing docket.
Silverstein said it’s good that ERCOT may do less real-time scrambling. But if severely cold weather returns, she said, around-the-edges operational improvements won’t make a big enough difference to keep the lights on for everybody. She also called for more attention on making sure black-start power plants are ready in case of a catastrophic grid outage.
And the huge potential for energy efficiency and demand response, which pays customers to cut power use, has barely been tapped for residential and small customers in Texas, according to Silverstein.
Wood, a former chair at the PUC and the Federal Energy Regulatory Commission, said conservative operations at ERCOT can be a short-term good and a long-term bad as they depress prices for the power industry, which relies on strong prices to build more capacity. But he noted that the PUC has directed ERCOT to take actions to address that concern.
Wood, who is CEO of the Hunt Energy Network, which is developing energy storage in Texas, said it’s unlikely an extreme event like the one in February will occur this winter. But he wouldn’t put the chance of outages at 0 percent.
“Our readiness for handling the system better if it does come back,” he said, is “substantially improved.”
5. Weather
While Texas leaders point to changes they’ve made, weather remains among the most critical factors in determining how the grid performs.
This past December wasn’t very cold in Texas. In fact, the state climatologist said Texas had its warmest December on record in over 130 years. But cold weather has made an appearance some in early 2022.
Berger of Space City Weather gave the Houston region about a 1 in 20 chance of seeing the sort of extreme winter event this winter that it saw last February.
He also said extreme winter cold events historically have not occurred in back-to-back years in the Houston area, while conditions known as La Niña also make a repeat unlikely this winter. Berger and other forecasters can’t rule out another intense winter storm this year, though the window is closing for parts of Texas.
After available electricity supplies fell short of demand in the February freeze, "it wouldn’t take that severe of a freeze to put Texans at risk of some localized outages,” Cohan, of Rice University, said in a Twitter message.
“Given the improvements that ERCOT has made and the rarity of freezes as severe as 2021, we’re highly unlikely to experience such widespread and prolonged blackouts” this winter, he said.
Silverstein said no one can guarantee the lights won’t go off, however. Complex systems can fail for multiple reasons, she said, including weather and cyber and physical attacks. But she said the PUC and ERCOT have pursued a number of measures that will reduce the odds of failure.
Uncertainty also remains around wind energy, as it can provide thousands of megawatts of power. The potential for a sharp drop in wind’s contribution to the grid is something operators will have to be mindful of on any given day, especially when temperatures are low and electricity demand is high.
