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Conservation Requested As Outage Investigation Starts

By Robert Wood, NewsRadio 1080 KRLD & Jack Fink, CBS 11 News
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(credit: Getty Images/Justin Sullivan)

(credit: Getty Images/Justin Sullivan)

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AUSTIN (CBSDFW.COM) – ERCOT is once again asking for you to conserve power as the weather turns cold again across most of the state.

The Railroad Commission has begun looking into what happened during last week’s cold weather that led to rolling blackouts across the state.

The Commission looked at natural gas supplies and the Texas Electric Reliability Council’s Ron Kitchens says there was some interruption. “Just had normal freeze up that occurs in any kind of cold event of the well head facilities, the electric control systems and some of the production facilities, when the power tripped off it turned some of the facilities off.”

Kitchens says this was the first real test of how we deal with supply problems in an emergency situation since the electric industry was restructured in 1999.

Meanwhile, the state Public Utility Commission is also investigating whether last week’s widespread rolling blackouts led to illegal profits by energy wholesalers.

Geoffrey Gay is general counsel for the Texas Coalition for Affordable Power, which represents cities. He says, “We have a market that’s flawed.’

While the state says there’s no evidence yet energy wholesalers manipulated the market, Gay says, “Some bodies out there who are generating power have made off with millions of dollars in excess of what they ought to be making on any ordinary given day.”

Energy companies have denied any wrongdoing.  The rolling blackouts were triggered last week when coal and natural gas fired power plants went offline during the winter storm and frigid temperatures.

In all, 83 plants were affected.  “I’ve never seen in my 30 years of regulatory experience that this happened anywhere”, Gay says.

When supply fell, demand surged, and so did electricity prices.  Normally, electricity on the spot market costs $50 per megawatt hour.

But for five hours last Wednesday, February 2, the cost of electricity shot up to $3,000 per megawatt hour.

Many companies that deliver electricity to homes pay that price – the max allowed by the state — and a limit that just went up the day before.

State representative Lon Burnam of Fort Worth says, “It could be just a coincidence. That said, it’s a huge coincidence.”

Burnam says he’s glad the state is looking into it.  He says, “Who’s going to end up paying for it in the end? Those of us who buy it at the house.”

Burnam says businesses like Bangkok Thai Cuisine in Dallas will also pay more.  Manager Alex Kongkeo says that’s unsettling.  “We’re paying a lot already today, and for us to be responsible for that too, it kind of gets me upset.”

Gay says what’s worse, even if the state finds a company manipulated the market, they wouldn’t be required to pay consumers back.

Kongkeo says that’s wrong.  “They should be punished”, she says.

Some analysts believe the state legislature needs to change the rules so that any company found guilty of manipulating the market will be required to pay consumers back.

The state says its investigation could take months to conduct.  The state senate will hold hearings next week.

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