Gov. Greg Abbott tells electricity regulators to encourage building more power plants, penalize renewable energy

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Two days before state lawmakers return to Austin for a special legislative session, Gov. Greg Abbott on Tuesday gave state electricity regulators marching orders to "improve electric reliability."

In a letter to the Public Utility Commission, Abbott directed the three-person board of directors, who he appoints, to take action that would require renewable energy companies to pay for power when wind and solar aren't able to provide it to the state's main power grid, echoing a move state lawmakers rejected in May.

Abbott also told the PUC to incentivize companies to build and maintain nuclear, natural gas and coal power generation for the grid — which failed spectacularly during a February winter storm, leaving millions of Texans without power or heat for days in below freezing temperatures.

Texas energy experts were skeptical that Abbott's orders would actually improve the reliability of the state grid, which operates mostly independently of the nation's two other major grids.

"What is here is not a serious or prudent plan for improving the grid," Daniel Cohan, an associate professor of civil and environmental engineering at Rice University, said in an interview Tuesday. "It's more of a political job favoring some [energy] sources over others. For Texans to have a more reliable power supply, we need clearer thinking that makes the best of all the sources we have."

Abbott's letter also called on the PUC to direct the state's main grid operator, the Electric Reliability Council of Texas, to better schedule when power plants are offline, an issue that caused tension between state regulators and power generators after some power plants unexpectedly went offline in June and led ERCOT to ask Texans to turn their thermostats up to 78 degrees for a week during a heat wave to conserve energy.

Abbott responded to the plant outages by declaring the power grid "is better today than it's ever been."

In the letter, Abbott said his directives to the PUC are aimed at ensuring "that all Texans have access to reliable, safe, and affordable power, and that this task is achieved in the quickest possible way."

The letter doesn't include many specifics about how the PUC should carry out Abbott's requests to improve the grid. A spokesperson for Abbott did not respond to a request for comment Tuesday.

State lawmakers responded to February's deadly winter storm with a few key changes to the power grid that energy experts have said will begin to address issues exposed by the storm, such as requiring power companies to upgrade plants to withstand more extreme weather and creating an emergency alert system. But lawmakers did not provide direct relief for everyday Texans.

"Governor Abbott has been consistently clear on his desire for a reliable grid and the 87th Texas Legislature laid out a detailed road map to that goal," PUC spokesperson Andrew Barlow said in response to questions about Abbott's letter. "While the PUC has been working on many of the items in his directive, this additional clarity is a welcome addition to our process."

As Abbott prepares to release the agenda for a special session of the Legislature that begins Thursday, Republican Lt. Gov. Dan Patrick and others have called on him to add energy-related issues to the list.

Meanwhile, Democratic lawmakers and leaders have criticized Abbott for turning his attention to building a state-funded border wall rather than fixing the state power grid.

Disclosure: Rice University has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

Some Texas power plants unexpectedly went offline last week. The grid operator says it still doesn’t know why

Last Monday, Texas' main power grid operator asked Texans, mid-heat wave, to turn their thermostats to 78 degrees during the afternoon and evening for the week to reduce electricity demand on the grid after 12,000 megawatts of power generation unexpectedly went offline — enough to power 2.4 million homes on a hot summer day.

By the end of the week, that appeal from the Electric Reliability Council of Texas expired without a public announcement, and ERCOT officials still have not said why they asked Texans to cut back on electricity use.

Were there damages to the power grid infrastructure stemming from February's deadly winter storm? Were there nefarious actors looking to manipulate the electricity market? What does this mean for power generation during the rest of the hot Texas summer?

ERCOT hasn't said — or released data to answer any of these questions raised by industry experts. And that is exactly how the Texas power grid is supposed to work, energy experts said.

"ERCOT knows what plants fail, but not why," said Bob King, an energy consultant in Austin who has worked in the Texas energy industry for more than 30 years.

ERCOT is a quasi-governmental body that manages the state's power supply; it's overseen by the Public Utility Commission, a state agency with leaders appointed by the governor. While ERCOT oversees the grid's daily operations, the grid itself is a network of independent companies, cooperatives and some cities that aren't required to quickly give ERCOT detailed explanations when power generation goes offline.

So far, ERCOT has not revealed which power plants went down last week — or even how many were down.

"Based on preliminary information received from generation owners, the vast majority of forced outages that occurred last week are due to equipment issues," ERCOT spokesperson Leslie Sopko said. "Our Operations group is analyzing the information and will be providing a more comprehensive overview of the causes."

Daniel Cohan, an associate professor of civil and environmental engineering at Rice University, said ERCOT was not being "sufficiently transparent in explaining what was going on and left Texans in the dark about causes for these outages."

Calpine, one of the state's largest power generation companies, said all of its generation equipment was up and running last week.

Vistra Corp., the state's largest power generation company, had one unit down: The Comanche Peak nuclear plant outside of Fort Worth shut down one of its units when the main transformer experienced a fire, according to the company, which owns the plant. Each unit at Comanche can generate about 1,150 megawatts of energy at full capacity.

"Aside from one unit at Comanche Peak, which makes up about 6% of Vistra's generation capacity in ERCOT, the rest of our fleet performed very well throughout the week," said company spokesperson Meranda Cohn.

But that one outage between the two large companies accounts for less than 10% of the lost power generation last week. ERCOT likely will not give more information to the public for 60 days, per ERCOT and Public Utility Commission rules, officials said.

In the meantime, ERCOT's independent watchdog will investigate what happened. Beth Garza, who was director of the watchdog from 2014 to 2019, said that's standard procedure after such an event.

"They will look if there is any indication if there is any nefarious or bad acting on any particular generations' part," Garza said.

Last week's power generation outages marked the second time ERCOT has asked Texans to cut back on electricity use since February's storm. Garza and other experts also raised concerns about the winter storm's impact on "thermal" sources of energy, which in Texas are largely powered by natural gas plants.

"One thing I'd be curious about: What the effects of February's cold weather was on thermal units," Garza said. "Was some of that being worked on and fixed (last week)?"

The winter storm shut down a huge chunk of Texas' natural gas supply chain, including natural gas power plants. But in the aftermath of the storm, politically powerful natural gas companies, and their regulators, mostly avoided harsh criticism from state lawmakers. Regulators even went as far as defending the industry through a public relations campaign.

Lawmakers did, however, pass legislation requiring power plants to build protection against extreme weather, a process called weatherization. But critics said lawmakers did not require all parts of the state's electricity supply chain to weatherize.

Of the approximately 12,000 megawatts of generation offline last Monday, about 9,600 megawatts, or nearly 80% of the outages, were from thermal power sources, according to ERCOT.

Less than 500 megawatts of thermal generation offline last Monday were planned to be out for maintenance, ERCOT officials said.

That data undercuts Gov. Greg Abbott's claim last week that the power plants that went offline were undergoing repairs to prepare for the summer heat. Power plants typically undergo maintenance repairs in the spring.

In April, the last time ERCOT asked Texans to cut back electricity use, the supply of electricity to the power grid was struggling to keep up with demand because a large number of power plants were offline — some due to repairs from the February storm — combined with higher demand than ERCOT predicted.

ERCOT has not said if last week's plant outages were related to April's outages.

A more unpredictable and less relied upon power source — wind — also did not provide much power generation to the grid last week while the power plants were offline.

Power from wind turbines last Monday afternoon was between 3,500 to 6,000, according to ERCOT, which was 1,500 megawatts lower than what the grid operator typically expects during the peak time of usage in summer afternoons.

Cohan, the Rice University professor, said he's more worried about the grid's overall performance than the fact that the wind was barely blowing last week.

"This is our primetime season, power plants are supposed to be ready to go for the summer and to generate as much as possible on summer afternoons," Cohan said. "So it is concerning that so many plants weren't ready last week. And last week was really just a trial run. We're likely to have temperatures at least 10 degrees warmer and demand 10% higher on hotter days in July and August. This grid wouldn't have been ready for it."

Gov. Greg Abbott says power grid better than ever as Texans asked to cut back electricity use

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Gov. Greg Abbott said Wednesday afternoon that Texas' main power grid "is better today than it's ever been" — even as residents were on their third consecutive day of being asked to reduce electricity use.

The Electric Reliability Council of Texas, which operates the main power grid, is urging conservation through Friday, as a number of power plants were inexplicably offline at the same time as the state was experiencing record June demand for electricity.

As of Wednesday, when Abbott made his first public comments about this week's grid conditions, ERCOT officials have still not said why so many power plants were unexpectedly offline. Approximately 12,000 megawatts of power generation were offline Monday afternoon — enough to power 2.4 million homes on a hot summer day. That's several times more than what ERCOT would typically expect to go down during June.

Approximately 9,000 megawatts of electricity were still offline as of Wednesday afternoon, an ERCOT spokesperson said.

ERCOT officials are working to determine why so many units were down this week. Some experts theorized that the deadly winter storm in February may have caused damage to plants that is causing new complications, but ERCOT officials did not offer any details.

Abbott, however, said Wednesday that power generation plants were down for "repairs."

"They got repairs done now, before [the] real heat of summer hits," Abbott said in response to a power grid question during a press conference the governor held about plans to build a border wall at the state's boundary with Mexico.

Abbott's office did not immediately respond to questions for comment about his power grid statements Wednesday.

Power plants typically make maintenance repairs during the fall and the spring months ahead of the more extreme weather seasons. In April, just two months after the winter storm, Texans were asked to conserve electricity when a significant amount of plants were down for maintenance.

Power grids must keep supply and demand in balance at all times. When Texas' grid falls below its safety margin of excess supply, the grid operator starts taking additional precautions to avoid blackouts. The first precaution is to ask the public to cut back electricity usage.

ERCOT officials said it "appears unlikely" that the ERCOT grid would need to implement outages, like it did in February, to reduce strain on the grid this week.

Earlier Wednesday, officials with ERCOT and the Public Utility Commission, which oversees ERCOT, briefed members of the Texas House's Democratic and Republican caucuses in separate calls about the grid conditions.

Peter Lake, the PUC chair, told House Democrats that officials still cannot explain why so many power generators were offline — but said the agency is working to find out.

"We don't know if it's because of residual damage from the winter event, we don't know if it's because there was a maintenance delay because of the winter event," Lake said. "We don't know if it's a function of the mechanics of the market and the economics of the current market, but … we've got to figure that out."

Cassandra Pollock contributed to this report.

Twitter’s lawsuit against Texas Attorney General Ken Paxton tossed by federal judge

A federal judge in California on Tuesday dismissed a lawsuit brought by Twitter against Texas Attorney General Ken Paxton, whose legal efforts to investigate the social media platform after it suspended President Donald Trump's account led the company to sue.

Twitter's lawsuit included a request for a temporary restraining order that would keep Paxton and his office from enforcing a demand that seeks documents revealing the company's internal decision making processes for banning users. Judge Maxine M. Chesney said the company's legal action was "premature."

Paxton, a passionate supporter of Trump, sent Twitter a civil investigative demand after it banned Trump from its platform following January's deadly siege at the U.S. Capitol. Twitter wrote in its suit responding to Paxton that it sought to stop him "from unlawfully abusing his authority as the highest law-enforcement officer of the State of Texas to intimidate, harass, and target Twitter in retaliation for Twitter's exercise of its First Amendment rights."

The company claimed Paxton's "retaliatory" investigation violated the First Amendment as an inappropriate use of government authority.

"Twitter's lawsuit was little more than an attempt to avoid answering my questions about their large-scale censorship and content-moderation policies," Paxton said in a statement Tuesday.

Paxton's legal back and forth with Twitter is just the latest in the GOP's larger campaign against technology and social media companies after officials and followers faced repercussions for sowing doubts about the 2020 election that fueled the Capitol insurrection.

Paxton himself had been sowing doubts about the election for weeks leading up to the attack on the Capitol, and was co-chair of the Lawyers for Trump coalition.

Now, Paxton's legal actions have focused more on large social media platforms. Twitter is just one of five tech and social media firms to which Paxton issued civil investigative demands to learn about the procedures such companies use to regulate postings or user accounts.

Paxton, who attended the rally that preceded the attack on the Capitol, criticized companies' moves after the siege, which included Twitter banning Trump from its platform.

"The seemingly coordinated de-platforming of the President of the United States and several leading voices not only chills free speech, it wholly silences those whose speech and political beliefs do not align with leaders of Big Tech companies," Paxton said in a Jan. 13 news release.

According to U.S. Code, an attorney general can issue a civil investigative demand during a racketeering investigation in order to acquire information or documents relevant to that investigation. These demands can be used to obtain evidence of a company's procedures and policies. According to a press release, Paxton is using civil investigative demands to learn about the procedures that social media firms use to regulate postings or user accounts.

Recently, Paxton has faced separate legal action related to Twitter, from a group of Texas Twitter users who were blocked from viewing Paxton's tweets from his @KenPaxtonTX account. The users said Paxton blocking them from his page was a violation of the First Amendment because it limited the rights of people to participate in a public forum and access statements made by the public official.

Paxton recently unblocked the nine Texans.

'Illegal' for Texas to claw back billions utilities overcharged during blackouts: regulator

In an unusual move, Republican Lt. Gov. Dan Patrick joined a senate committee hearing Thursday evening for nearly a half hour to question the chairperson of the Texas utility regulator who was appointed by GOP Gov. Greg Abbott.

Patrick recounted a recent phone call he had with Public Utility Commission Chair Arthur D'Andrea, whom Patrick and other senators have asked to retroactively reduce the market price for power during the deadly winter storm. D'Andrea and the PUC have declined to do so, citing unforeseen consequences of meddling in an electricity market that has already been settled.

"You said you agreed with my view that we needed to correct this," Patrick said of the phone call.

"Sir, there's no way I agreed with you that we need to correct this," D'Andrea said. "There's no way I would have done that. This whole thing is because I don't agree with you. ... it would be very easy if I agreed with you. I don't. I'm sorry."

D'Andrea, a lawyer who used to work in the Texas attorney general's office, said he did not think the PUC has legal authority to retroactively change the market price for power during the time of the winter storm.

"Even if the governor of the state of Texas told you to correct this error and this mistake, or respond to unusual circumstances, are you saying that you would not obey that?" Patrick said.

"I've worked for him for a decade and he has never asked me to do anything that I thought was illegal," D'Andrea said. "...I think it's illegal, and his first thing he told me when I came to work for him is, 'We are not doing anything illegal.'"

The lively exchange came on the same day D'Andrea told lawmakers the state's energy grid operator, the Electric Reliability Council of Texas, overcharged power companies by roughly $3 billion after the winter storm, pushing back on a previous report from an agency watchdog that said the companies were overcharged by $16 billion.

Last week, an independent monitor for the Public Utility Commission reported the Electric Reliability Council of Texas overcharged power companies by about $16 billion in the days immediately following the February winter storm which knocked out power for multiple days across the state, leaving people in subfreezing temperatures. The eye-popping number prompted calls for action from elected officials including Patrick demanding the charges be reversed.

But on Thursday, D'Andrea called the figure a "mistake" and said the firm, Potomac Economics, would be officially revising its estimate. Later in the day, former ERCOT CEO Bill Magness submitted a report pushing back on the claims it overcharged to such extremes.

"This was an intentional and carefully considered decision to protect human health and safety while stabilizing the electric grid. It was not an error," Magness' report said.

But a letter submitted Thursday by Potomac Economics repeated that ERCOT overcharged companies by $16 billion. However, Potomac clarified its recommendation for how much should be fixed, calling for a $4.2 billion price correction.

Last week, the PUC said it would not retroactively reduce the market price for power to account for overcharge payments, citing unforeseen consequences. On Thursday, D'Andrea stood by that decision and said he would not reverse charges to account for even the revised figures, citing unforeseen consequences. D'Andrea is the last remaining member of the three-person board which oversees ERCOT, after the other members recently resigned amid criticism for the power outages.

It is still unclear whether and how this overcharge directly affects Texas electricity customers, however many power companies have taken a significant financial hit.

In Texas, wholesale power prices are determined by supply and demand: When demand is high, ERCOT allows prices to go up. During the storm, the PUC directed the grid operator to set wholesale power prices at $9,000 per megawatt-hour — the maximum price. Raising prices is intended to incentivize power generators in the state to add more power to the grid. Companies then buy power from the wholesale market to deliver to consumers, which they are contractually obligated to do.

But extended freezing weather made that impossible because it knocked a large portion of the state's electricity generation offline.

ERCOT maintained its highest level of emergency alert until the morning of Feb. 19 — five days after the storm initially struck the state — a signal to the market that the power grid was still unstable, which kept prices high.

"What we're discussing here is whether or not we want to go back and change the rules of the game after the game's been played," said state Rep. Chris Paddie, R-Marshall, chair of the House Affairs committee.

Speaking to the committee Thursday, D'Andrea pushed back against officials who earlier this week wrote in a letter calling for D'Andrea to change his mind about retroactively reducing the market price for power.

"I think they're relying on wrong information given by the independent market monitor," D'Andrea said of Patrick and state senators who urged a reversal.

Magness, the outgoing ERCOT CEO, testified before the Senate Jurisprudence Committee on Thursday that when the grid operator came out of emergency conditions, and power supply appeared to be able to meet demand, he and the PUC decided to keep prices high for fear of losing generation again and plunging back into outages.

He was concerned with projections of high demand on Feb. 19, the risk of generators tripping offline again, the physical damage to power infrastructure after the storm, and the large industrial plants re-starting that demand a significant amount of power.

He and the PUC — disagreeing with the independent grid monitor — decided that in the interest of public safety, prices needed to be kept at the articifical cap. Natural gas prices were still extremely high, he said, and they worried the natural market price for power would not be adequate to incentivize power generators to continue to buy the high-priced fuel that week. He feared telling people across the state the emergency was over — and then plunging people back into the dark again.

"We needed to maintain integrity of the system in any way we possibly could," Magness said. "It was a judgment call."

D'Andrea said the electricity market from the week of the storm has been settled and the participants in that market operated under the rules set by ERCOT and the state. Already, some Texas consumers and companies such as Brazos Electric Power Cooperative have already been hit financially. D'Andrea said retroactively adjusting the market would lead to unforeseen problems.

"We know who's hurt, let's address that," D'Andrea. "Instead of making a huge mess that we can't foresee, and losing twice, let's just stick with the status quo."

Erin Douglas contributed to this story.

Texas overcharged power companies $16 billion for electricity during winter storm: report

The Electric Reliability Council of Texas made a $16 billion error in pricing during the week of the winter storm that caused power outages across the state, according to a filing by its market monitor.

Potomac Economics, the independent market monitor for the Public Utility Commission of Texas, which oversees ERCOT, wrote in a letter to the Public Utility Commission that ERCOT kept market prices for power too high for nearly two days after widespread outages ended late the night of Feb. 17. It should have reset the prices the following day.

That decision to keep prices high, the market monitor described, resulted in $16 billion in additional costs to Texas power companies. The news of the overcharging was first reported by Bloomberg.

In Texas, wholesale power prices are determined by supply and demand: When demand is high, ERCOT allows prices to go up. During the storm, PUC directed the grid operator to set wholesale power prices at $9,000 per megawatt hour — the maximum price. Raising prices is intended to incentivize power generators in the state to add more power to the grid. Companies then buy power from the wholesale market to deliver to consumers, which they are contractually obligated to do.

Because ERCOT failed to bring prices back down on time, companies had to buy power in the market at inflated prices.

The error will likely result in higher levels of defaults, wrote Carrie Bivens, a vice president of Potomac Economics, the firm that monitors the grid operator. She said the PUC should direct ERCOT to remove the pricing interventions that occurred after outages ended, and allowing them to remain would result in "substantial and unjustified" economic harm.

Retail power providers have been in financial distress across Texas since the storm; many were forced to buy power on the wholesale market at extremely high prices.

Brazos Electric Power Cooperative Inc., Texas' largest power cooperative, has already filed for bankruptcy protection after incurring $2.1 billion in combined charges owed to ERCOT, according to court documents filed Monday.

Many retail power providers complained in filings to regulators that generators of electricity, which were unable to produce enough power during the storm, profited and left retail companies scrambling.

"The ERCOT market was not designed to deal with an emergency of this scale," wrote Patrick Woodson, CEO of ATG Clean Energy Holdings, a retail power provider based in Austin, to the Public Utility Commission. The pricing failure, he wrote, "has pushed the entire market to the brink of collapse."

Bivens wrote that while she recognizes that retroactively revising the prices is "not ideal," correcting the error will reflect the accurate supply and demand for power during the period after the outages.

The recommendation "will not result [in] any revenue shortfalls for ERCOT's generation as the corrected prices will cover the generator's as-offered costs," she wrote. "We recognize that revising the prices retroactively is not ideal."

A spokesperson for ERCOT was not immediately available to comment.

Kenan Ogelman, the ERCOT vice president of commercial operations, who testified during a Texas Senate committee hearing Thursday, was not asked by state senators about ERCOT's $16 billion mistake. Sen. Kelly Hancock, R-North Richland Hills, who chairs the Business and Commerce committee, did not indicate what action he or other senators would take on the various financial ripple effects from the winter storm.

"There are financial concerns — let's put it that way — that we have to address," Hancock said.

Reese Oxner and Shannon Najmabadi contributed to this report.

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