No Market Manipulation During February Outages

AUSTIN (AP) – Energy markets were not manipulated during rolling electrical outages and the failure of dozens of power plants in early February as freezing weather blanketed parts of Texas, an independent analysis found.

The analysis was done by Potomac Economics Ltd., a consulting company that operates under contract to the Texas Public Utility Commission.

The Electric Reliability Council of Texas, ERCOT, which supervises the state’s power distribution grid, ordered the rolling outages Feb. 2, a day after an ice and snow storm rolled into the state. The severe conditions knocked out more than 80 power stations.

At times power prices spiked as much as 100 times normal rates, but the market “operated efficiently” during the freeze, the Austin American-Statesman reported Friday.

“We do not find any evidence of market manipulation or market power abuse in relation to the widespread generating unit outages,” according to the analysis, released late Wednesday.

Three other state and federal reviews are pending.

“We anticipate and are looking forward to participating in the development of a comprehensive set of actions that will serve to significantly improve the future reliable operation of the ERCOT grid,” the report said.

The analysis noted that ERCOT officials knew that although several units were scheduled to be out of service when the freezing weather hit, they apparently did not ask two of the largest power generators to delay their planned outages.

“The initiation of such a dialogue would appear to have been a reasonable action,” the report said.

John Fainter, president of the Association of Electric Companies of Texas, said it was anticipated that the report would find no manipulation or withholding of power.

“But it’s good to have that confirmed. Some people lost a lot of money, and others made it, but that’s generally how the market works,” said Fainter.

Tom “Smitty” Smith, director of the Texas office of Public Citizen, a nonprofit consumer advocacy organization, said the results of the analysis alleviated a lot of concerns.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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  • Don

    Yes I really believe a state that doesn’t mind polluting my ground water, air and life finding no foul play.
    I’m sure all the people who pay more for electricity and the rich who did not have non-grid back-ups where freezing right along beside me, yet the Super Bowl stadium never lost power when all of it’s back ups where electrical? My electricity is cheaper because I only use electricity, thus all those stadium providers were well aware they where not the only ones and all of them should have cut the power to it at the same time. That in itself is manipulation.
    It’s not the first time a freeze hit Texas so exactly why weren’t all the new plants required to be prepared for such a freeze because it happened before? Let’s see we have to have an excuse to raise prices if we are lucky enough to have the pipes freeze again. Not many house owners in Texas leave their pipes unwrapped or unprotected, so exactly why did those providing electricity do just that?
    In a fair market during a crisis there are no big winners or losers, just like all of us that went without electricity they all suffer the same. Yes some had back-ups just like some of us will have food and unless we do like they did in the Great Depression and share that food, many will die.

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