Mitchell Ferman

Texas leaders raked in millions from energy companies after failure of state power grid in February

"Energy industry showers Gov. Greg Abbott, other Texas politicians with campaign cash after they passed power grid bills" was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

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Fixing Texas' power grid was about the only thing Republicans and Democrats in the legislative session seemed to agree on earlier this year. Power companies were in the hot seat, as millions of Texans who endured a week of subfreezing temperatures with no power demanded sweeping, multibillion dollar improvements to prevent another deadly disaster — and lawmakers promised action.

But by the end of the legislative session, if Texas' top power companies were aggrieved by the way they were treated by the Legislature or any of the new laws passed targeting their industry, they didn't show it.

Texas elected officials can't receive campaign donations during the session, but after it ended in May, they were showered in cash by the energy industry — even more than usual for a group known for its deep pockets and generous campaign giving.

From June 21 to June 30, after the legislative fundraising blackout ended, five of the largest and most prominent companies in the Texas power grid supply chain — Calpine, Centerpoint, NRG Energy, Oncor and Vistra — or their top executives collectively donated about $497,000 to state elected officials and political groups. That's more than twice the $207,000 they gave during the same period when the legislative session ended in in 2019, according to a Texas Tribune analysis. A large chunk of that cash was driven by Oncor, Texas' largest transmission and distribution electric company, with many big donations coming from the company's executives.

Over that same short stretch in June, 11 prominent oil industry leaders, including billionaires Kelcy Warren, S. Javaid Anwar and Douglas Scharbauer — all three whom could not be reached for comment — combined to contribute about $3.2 million to Texas elected officials, up from about $2.2 million over the same period following the previous legislative session in 2019. Warren's company Energy Transfer declined to comment on his behalf.

For some energy experts, the increase in donations for the officials at the close of the session looks like a reward for not passing more stringent regulations and raises questions about whether lawmakers let the oil, gas and the broader energy industry off easy for its massive failures.

“Gas producers got a pass by Texas policymakers," said Michael Webber, professor of energy resources at the University of Texas at Austin. “Making a million-dollar political donation to reward the government for its light touch and encourage the government to continue turning a blind eye to price gouging and windfall profits while hundreds of people die seems like a good return on investment."

A spokesperson for Oncor said the company “believes in actively participating in the political process." CenterPoint said: “In this case, CenterPoint Energy Political Action Committee made public contributions to support members of the Texas Legislature who had announced their intention to run for re-election, regardless of party affiliation." A Calpine representative said its CEO, who made up the bulk of contributions tied to the company, donated money “as he develops relationships with these members directly." The other two companies did not respond to requests for comment.

Gov. Greg Abbott, who is heading into a reelection year in 2022, benefited most from the flood of June campaign donations from the energy industry.

Abbott received about $4.6 million from oil, gas and broader energy interests, his largest haul ever from those groups in the post-legislative session fundraising period following the four regular legislative sessions during Abbott's tenure as governor.

Those donations included $1 million from Warren, cofounder of a pipeline company that made $2.4 billion from the winter storm, according to a report from Bloomberg. Warren has given Abbott $250,000 donations almost every year since he won the governor's office in 2014.

“Governor Abbott represents all Texans, and that's what he takes into account every day as he works on behalf of the Lone Star State," spokeswoman Renae Eze said.

Other lawmakers who saw some of the largest spikes in funding from the energy industry were those who authored the power grid legislation and chaired the committees that heard the bills.

State Rep. Chris Paddie, R-Marshall, chair of the powerful state affairs committee in the House, was among those lawmakers.

Just 6%, or $1,141, of his overall campaign contributions in the brief June fundraising period after the 2015 legislative session came from the energy industry. During the same stretch after the two subsequent legislative sessions in 2017 and 2019, fewer than 9% of Paddie's contributions came from energy interests.

After the 2021 regular legislative session, energy industry donations totaling $26,000 for the period made up 88% of Paddie's campaign contributions over just the last 10 days of June.

“Absent that storm, his contributions would have been different,“ said Bill Miller, a longtime Texas political consultant and lobbyist. “The storm, as bad as it was, helped him on his bottom line for contributions."

Paddie received contributions from Oncor; Vistra, the state's largest power generation company; and NuStar Political Action Committee, an oil and gas group. Paddie has received thousands in contributions from these entities in election years, but never this amount immediately after a legislative session.

A spokesperson for Paddie did not respond to questions.

Paddie was among a chorus of elected officials from the governor on down demanding answers and solutions for why Texas' grid was on the brink of total collapse in February. There was a series of finger-pointing and falsehoods from state elected officials who wouldn't accept responsibility and falsely shifted blame to renewable energy sources as they vowed to fix the grid.

The Legislature ultimately passed a bill — shepherded by Paddie in the House and state Sen. Charles Schwertner, R-Georgetown, in the Senate — that requires power generation companies to prepare to withstand extreme weather conditions. But the bill didn't set a hard deadline for when the upgrades need to be complete and it stopped short of detailing how the state would enforce and incentivize the process called weatherization.

Critics said this and other storm response bills spearheaded by these lawmakers also failed to provide direct assistance to people harmed by February's power crisis or to help Texans reduce electricity use to take pressure off the grid during extreme weather.

Schwertner went from receiving 3% of his overall campaign contributions from the energy industry in the fundraising period after the 2015 legislative session to the industry making up about 32% of his contributions in 2021. The amount of money the senator fundraised from energy interests jumped from $1,000 to $44,500, the Tribune found. A Schwertner spokesperson did not respond to questions for this story.

State Sen. Kelly Hancock, R-North Richland Hills, who led much of the upper chamber's response to the storm that left millions of Texans without electricity for days in subfreezing temperatures, also got a boost in funding.

More than a quarter of Hancock's contributions in June came from energy interests, about $53,500 — the most he has ever received in a post-legislative session period. This is up from 19% after the 2019 session. Hancock also has ties to the energy industry in his full-time job as a business owner. His chemical logistics company serves the oil and gas industry, among others. He did not respond to a request for comment.

Oil and politics have been entwined in Texas for more than a century, since wildcatters hit the first gusher at Spindletop back in 1901. Oil grew to become the state's signature industry, rich oilmen and companies started showering politicians with money and a romance blossomed. Oil and gas taxes now boost the state budget.

“The twisted roots between the oil and gas industry and Texas lawmakers is almost as old as the Capitol building itself," said Brandon Rottinghaus, a political science professor at the University of Houston.

The Bush family's origin story in Texas revolves around oil and gas, and money from the industry has funded much of the family's political fortunes in the state ever since they arrived in West Texas.

While former Gov. George W. Bush was heavily funded by his family's well-established energy network, his successor, former Gov. Rick Perry, worked to cultivate a wide base of financial support from energy interests, Rottinghaus said.

Abbott has run a similar playbook as Perry and has taken it to a different level, Rottinghaus said.

Overall since 2014, Abbott has received about $30 million from oil, gas and other energy interests, which is about 18% of his $166 million total raised in that time. Four out of the top 10 individual donors to Abbott are oil and gas men.

Just before the energy donations poured in for Abbott in June, the power grid operator asked Texans, mid-heat wave, to conserve power and turn their thermostats to 78 degrees for a week in order to reduce electricity demand because significant power generation was unexpectedly offline.

The warnings led to renewed calls for the Legislature to take more urgent action to fix the power grid. During that week, Abbott assured Texans the grid was in better shape than ever.

Not long after, Abbott released a list of issues lawmakers needed to address in July during a special-called legislative session. The power grid was not included.

Leading up to Abbott's decision, Lt. Gov. Dan Patrick pressured Abbott in public statements that issues related to the grid needed to be on the agenda. Patrick's calls came after he tried to assert himself prominently in responding to the winter storm by demanding leadership changes at state regulatory agencies and sparring with one Abbott-appointed regulator on the senate floor.

About 26% of Patrick's contributions in June came from energy interests, more than $1.3 million, his most ever in the post-session stretch. That amount is up from 12% of his contributions coming from energy interests after the 2019 session, about $383,000.

Most of Patrick's energy industry money received in June was driven by oil executives.

Patrick spokeswoman Sherry Sylvester said: “No one has been tougher on the energy sector and more proactive for ratepayers this session than Lt. Governor Patrick, who moved immediately following the February storm to call for the resignations of both the PUC board and ERCOT, both of which were fully reformed through Senate Bills 2 and 3."

Disclosure: Calpine, CenterPoint Energy, NRG Energy, Oncor, University of Texas at Austin and University of Houston have been financial supporters 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.

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This article originally appeared in The Texas Tribune at https://www.texastribune.org/2021/08/04/texas-energy-industry-donations-legislature/.

The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.

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

"Some Texas power plants unexpectedly went offline last week. The grid operator says it still doesn't know why" was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

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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."

Disclosure: Calpine and Rice University have been financial supporters 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.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2021/06/24/texas-ercot-power-plants-offline/.

The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.

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

"Gov. Greg Abbott says power grid better than ever as Texans asked to cut back electricity use" was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

Sign up for The Brief, our daily newsletter that keeps readers up to speed on the most essential Texas news.

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.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2021/06/16/texas-power-grid-ercot-greg-abbott/.

The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.

Texans lawmakers overlook everyday constituents in response to power outages during winter storm

June 3, 2021

"Everyday Texans overlooked in state lawmakers' response to power outages during winter storm" was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

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The first day, Melissa Hutchins and her husband burned furniture to keep warm. Friends of theirs burned their children's toys. A neighbor's roof caved in.

When the Hutchins lost water because the pipes froze, they went to a hotel.

Three nights and four maxed out credit cards later, they returned to their Arlington condominium when power was restored to Texans after one of the deadliest and costliest disasters in state history.

“Texas is not prepared for weather like that," Hutchins said. “We're not equipped for that at all down here."

State lawmakers responded to February's deadly power outages during a winter storm with a few key changes to the state's power grid that experts said will begin to address some issues exposed by the storm — such as requiring power companies to upgrade plants to withstand more extreme weather and creating a statewide emergency alert system.

But they did not provide direct relief for everyday Texans, many of whom lost jobs or loved ones during the pandemic and then went through yet another emotionally and financially taxing crisis.

The storm caused the deaths of as many as 700 people, according to a Buzzfeed analysis. Insurance costs for property damage alone are about $18 billion, Reuters reported, citing Karen Clark & Co., a Boston consulting firm. The total economic damage to the state may be $86 billion to $129 billion, according to The Perryman Group, a Texas economic firm.

Lawmakers approved a bill that will likely increase most Texans' electricity bills by at least a few dollars each month for possibly the next two decades to bail out the state's utility and electricity companies. Patricia Zavala, senior policy analyst at Jolt, a Latino progressive advocacy group in Texas, said even a small increase in living costs can put Texans who are “teetering on the edge" into financial jeopardy.

And Doug Lewin, an Austin-based energy and climate consultant, said that while the Legislature took positive steps in requiring power companies to prepare for future storms, nothing was done to provide direct assistance to people harmed by the power crisis or to help Texans reduce electricity use to take pressure off the grid during extreme weather.

He and others said the changes this session were not the sort of sweeping reforms necessary to completely avoid another power grid catastrophe.

“There was really no focus at all to address ... the millions of Texans struggling to pay their electric bills," Lewin said during a Friday press conference with Texas environmental advocates. “There's two sides of the equation: supply and demand. The Legislature has stayed almost entirely focused on supply, and almost completely neglected the demand side."

Lawmakers made the case in the final minutes of the legislative session that overhauling the board that oversees the power grid will provide the structural change necessary to prevent another grid-related disaster.

“I always get questions, 'What have y'all done to fix the disaster that we saw in February?'" state Sen. Lois Kolkhorst, R-Brenham, said before the Senate passed Senate Bill 2, which changes the makeup of the Electric Reliability Council of Texas' board of directors. “It starts with leadership, and it starts with the structure [of people who] make the hard calls."

Still, both Republican and Democratic lawmakers acknowledged that they did not do enough this session to aid the people — like the Hutchins and their neighbors — who struggled financially after the winter storm caused medical emergencies, damaged property, spoiled food and sent many Texans' utility bills soaring.

Melissa Hutchins, 37, estimates that the hotel, food, repairs to their condo and lost work cost them $5,000. Her husband, a manager at a food and beverage manufacturer, made an early withdrawal on his retirement account so they could repair broken plumbing to restore their water and fix their dishwasher. All of this, she said, after a year in which her husband was sick with COVID-19 and missed a month of work.

“It was just crazy," Hutchins said. “It's one thing after another. Like water, we can't live without water. We have to have electricity."

Lawmakers said the measure they passed to give utilities and electricity companies access to billions of dollars in bonds and loans will prevent a larger financial crisis in the state in the aftermath of the storm. Lt. Gov. Dan Patrick has called for additional legislation that would provide direct financial relief to consumers.

“The next time, for this Lieutenant Governor, that we're going to spend billions of dollars concerning the storm, it's going to be to help the people of Texas and the ratepayers, or I won't call that bill up," Patrick said. “We have to help the people of Texas and their electric bills."

Gov. Greg Abbott is expected to call lawmakers back for a special session later this year to revive certain bills that died during the regular session; in an interview with The Texas Tribune on Tuesday, Abbott said he would likely support a proposal to aid consumers, but he hasn't announced whether he would add the issue to lawmakers' plates in a special session.

“Put me on the side of consumers who suffered through this storm," Abbott said.

Little relief for everyday Texans

Senate Bills 2 and 3, the two major power grid bills that lawmakers passed on Sunday and sent to Abbott, focus on ERCOT's board and weatherizing the power plants that serve the electrical grid.

Senate Bill 2 reduces the number of ERCOT board members from 16 to 11 and requires that instead of what lawmakers called “industry insiders" appointing the board, Abbott, Patrick and House Speaker Dade Phelan will appoint a committee to make ERCOT board selections.

Senate Bill 3 requires power companies and some natural gas companies to make upgrades so their facilities can withstand extreme weather and requires regulators to create an emergency alert system, similar to an Amber alert, for power outages and inclement weather.

The Senate did not approve a $2 billion plan, approved by the House, to help companies pay for weatherization. So companies alone will pay the costs to retroactively equip their power plants to withstand extreme weather.

The state likely won't require companies to make weatherization upgrades until 2022 at the earliest.

Another package of bills sent to the governor would increase rates on Texans' power bills for likely the next two decades to cover at least $7 billion of gas utilities', electric cooperatives' and electric companies' debt from the storm.

Many companies, particularly rural electric cooperatives, were financially wrecked after the winter storm due to state electricity regulators' decision to set power prices at the maximum rate of $9,000 per megawatt-hour and keep them there for an additional 32 hours after power began to return. Natural gas fuel prices also spiked during the storm; some gas utility companies said their customers' bills would increase several times the normal amount if the companies had to finance their storm-related debt without state help.

If Abbott signs the bills into law, the legislation will prevent customers from having to pay huge bills from the storm by allowing companies to seek billions of dollars in state-approved bonds backed by the new charges on customers' bills. The state's plan will help the companies get cheaper, longer-term loans.

Some electric companies also owe massive debts to ERCOT; under House Bill 4492, ERCOT will receive $800 million from the state's Economic Stabilization Fund, known as the rainy day fund, to pay off those debts — an effort to prevent most retail electric providers from passing huge bills on to their customers and to also reimburse power generation companies.

Still, some are concerned that the state's solution will add yet another cost to already-struggling consumers. Aaron Gonzales, 27, a graduate student at the University of Texas and a volunteer for Jolt Action, said the rising cost of living has delayed his plans to purchase a home. Even a small increase on his utility bill chips away at that dream, he said.

“It's a straw that gets put on the camel's back, and we have to ask ourselves, how many before it breaks?" he said. “A lot of people in my family were laid off this year or on reduced wages. At a time when we don't have jobs or money, you're asking us to pay even more."

The Texas Senate added an amendment in the final week of the session to House Bill 4492 that would have allowed the state comptroller to provide one-time bill payment assistance grants of $350 to residential customers. That measure was stripped from the bill in the House, and Patrick and some senators called for the proposal to be brought back up during a special session.

“It is only fair and right," said Sen. Roland Gutierrez, D-San Antonio. “People froze in their homes. A $350 credit is the least we can do."

The Senate stripped away House proposals to help electric customers, too. An amendment to Senate Bill 3 by Rep. Erin Zwiener, D-Driftwood, would have created a grant program for projects that add backup power generation to water treatment plants, local electric utilities, hospitals, nursing homes and dialysis centers. The amendment was taken out during the two chambers' negotiations.

“I don't know if we got any good consumer wins, which is disappointing to think about," Zwiener said of the session.

What the Legislature didn't do

Although lawmakers required electricity generators to weatherize against extreme weather, they took a more limited approach to requiring gas fuel facilities to weatherize — Senate Bill 3 requires only gas facilities that are deemed "critical" by regulators to make changes.

Dozens of natural gas companies failed to do the paperwork that would keep their facilities powered during an emergency, so utilities — under orders from ERCOT to shut down parts of the grid as demand surged — cut their electricity at the very moment that power plants most needed fuel during the storm. Some power plants were unable to operate during the storm due to natural gas fuel shortages.

Lawmakers did not set deadlines for gas companies to weatherize their equipment, which critics argue will allow companies to delay the upgrades.

Lawmakers also stopped short of ordering an energy market overhaul; some proposals would have fundamentally changed the state's deregulated market structure, which relies on supply and demand to set power prices, but lawmakers didn't bite.

And they rejected a pitch by billionaire Warren Buffett's company, Berkshire Hathaway, to spend $8.3 billion for 10 new natural gas power plants across the state for emergency use only, paid for by electricity customers. Many Texas companies did not support the plan, and lawmakers didn't even support studying the idea.

Lawmakers also didn't pass legislation that would help Texans pay to better insulate their homes and reduce their electricity usage, which could both lower power bills and reduce demand on the grid.

“[Texas] has been kind of reluctant to do it," said Pat Wood III, former Public Utility Commission of Texas chair, of weatherizing homes. “And I don't know why."

Those ideas didn't gain traction in the Republican-dominated Legislature, but Zwiener said she's optimistic that such proposals could later be funded by a federal infrastructure package, which President Joe Biden has pushed hard during his first months in office.

“I'm hopeful that when we return in the fall we will be able to leverage some of that for homeowners to weatherize," Zwiener said. “It's energy efficiency, but it's also about survivability. If you live in a house with decent insulation, your house is going to stay warmer or cooler for a much longer period of time."

What's next for the power grid

The upgrades to the grid that lawmakers approved last month won't eliminate the chance of blackouts in Texas. If the state experiences a severe heat wave or drought combined with high demand for power, outages are a possibility, according to recent ERCOT assessments.

ERCOT included three extreme scenarios in a forecast of the state's power resources for the summer — the most extreme calculations ERCOT has ever considered for its regular seasonal assessment. Each scenario would leave the grid short a significant amount of power, which would trigger power outages.

The grid operator had previously avoided warning the public about such extreme possibilities because of their low likelihood of happening. But after February's storm, ERCOT is changing tactics.

ERCOT interim President Brad Jones will also have to build working relationships with an entirely new board of directors, picked by a committee appointed by the state's top politicians.

Meanwhile, ERCOT has to convince the public that its new regime can be trusted to keep the grid from collapsing again.

“[They are] starting over because there's all these people who got introduced to the grid in February — and not in a good way," said Caitlin Smith, an Austin energy policy adviser. “So, we're starting their relationship with ERCOT from a really traumatic event and going from there."

Patrick Svitek contributed to this report.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2021/06/03/texas-electricity-bills-winter-storm-legislature/.

The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.

Federal judge tosses Twitter lawsuit against Texas Attorney General Ken Paxton

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

"Twitter's lawsuit against Texas Attorney General Ken Paxton tossed by federal judge" was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

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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.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2021/05/11/twitter-texas-ken-paxton/.

The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.

Texas lawmakers target renewable energy in the aftermath despite natural gas failures during winter storm

"Despite natural gas failures during winter storm, Texas lawmakers target renewable energy in the aftermath" was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

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Texas lawmakers have been advancing sweeping legislation to address some of the major issues stemming from February's deadly winter storm and catastrophic power outages. But some of the legislative moves are targeting renewable energy sources, like wind and solar, which experts and some lawmakers say seems more like a way to protect oil and gas interests than fix problems with the state's beleaguered power grid.

Tucked into Senate Bill 3, which seeks to overhaul the state's electricity market, is a key provision that would shift the financial burden of ancillary services, which help ensure power is generated continuously to Texas' main electricity grid, to renewable energy providers. Texas electric providers currently cover the ancillary services costs.

State Sen. Nathan Johnson, a Dallas Democrat, said he'd feel better about the bill “if there is logic to doing this."

“But I'm convinced that we're making a big mistake by attacking a problem that isn't the problem just because we feel like it might be the problem, when the data says the opposite," Johnson said on the Senate floor in late March.

Wind power is a renewable energy source that was expected to be a fraction of winter power generation. All sources — from natural gas, to nuclear, to coal, to solar — struggled to generate power during the February storm.

Yet some prominent Texas Republicans during and after the storm blamed the widespread outages on frozen wind turbines. Targeting renewable energy is not new for the Texas Legislature, but lawmakers have revamped their attacks on the sector after February's power outages left millions without electricity for days.

Johnson ended up voting in favor of SB 3, which has now been referred to the House as it takes up a series of related, standalone bills. Johnson has said he ultimately voted in favor of SB 3 because there are more positives in the legislation than negatives.

He also voted in favor of Senate Bill 2, legislation that would reform the governance of the Electric Reliability Council of Texas, which operates the state's main power grid.

On Tuesday, a relatively mild spring day, ERCOT asked Texans to conserve power as it struggled to keep with demand as a high number of power plants were offline for maintenance. And the operator's early summer assessment found that a combination of a severe drought, heat wave and low winds could lead to more power outages later this year.

Among the legislative reforms of ERCOT is a provision that would alter who can represent power generators in their seat on ERCOT's board of directors. Currently, any generator has been able to become the sole representative of independent Texas power generators on the ERCOT board, so long as they are a member of the ERCOT market.

SB 2 says the board member representing independent power generators has to own and control more than 5% of “installed capacity in the ERCOT market." That means only the largest energy companies, which are oil and gas firms such as NRG and Vistra Corp., would qualify. No renewable energy companies meet the Senate bill's threshold.

“It looks like some sort of culture war thing — fossil fuels versus renewables," said Michael Webber, energy resources professor at the University of Texas at Austin. “Which is a false choice. You can have both."

The oil and gas industry is politically powerful in the state and donates immensely to politicians, including more than $5.1 million in the 2020 election cycle to Texas state House and Senate candidates, according to data from the nonprofit National Institute on Money in Politics compiled by Rice University expert Mark Jones.

More than 25,000 megawatts of natural gas generation, enough to power 5 million Texas homes, went down during the storm, along with around 17,000 megawatts of wind generation, according to ERCOT. Natural gas is the largest source of generation on Texas' grid, especially during the winter.

Yet during various hearings in February and March about the outages, lawmakers spent relatively little time questioning natural gas production and transportation executives.

During the February storm, the state's gas industry regulators quickly launched a campaign defending the sector, spurred on through emails, tweets and public statements.

“Many including myself have warned for years about the dangers of relying too heavily on unreliable, intermittent forms of electric generation like wind and solar to meet the energy needs for 30 million Texans," Railroad Commissioner Wayne Christian wrote in his newsletter to supporters Feb. 17.

Earlier this month, one Republican lawmaker took a swipe at the renewables industry. Republican state Rep. Briscoe Cain of Deer Park introduced an amendment — which eventually failed — on to a jobs training bill for military veterans that would have eliminated wind and solar energy jobs from the program.

“Oil and gas is king in Texas," Cain said in early April on the House floor. “We want to make sure they have the best jobs... I happen to think the best jobs are not in wind power and solar."

But as Texas leaders try to protect natural gas and target renewable energy, big businesses have entered the legislative fight.

Some corporations — such as Amazon, Google and JP Morgan — that have already invested in Texas have come out in opposition to the legislation that would shift the financial burden of ancillary services to renewable energy. Those companies are among many corporate giants to tell Gov. Greg Abbott, Lt. Gov. Dan Patrick and House Speaker Dade Phelan in a letter that the cost of ensuring power is continuously generated should be covered by all energy sources, not just renewables.

“Companies want to move to Texas and one of the opportunities is to contract for renewable and cheap power," said Jeff Clark, Texas-based president of the pro-renewables group Advanced Power Alliance.

Disclosure: Advanced Power Alliance, Amazon Web Services (AWS), Google, Rice University and University of Texas at Austin have been financial supporters 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.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2021/04/19/texas-renewable-energy-oil-gas/.

The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.

Severe weather this summer could cause another Texas power crisis

"Severe weather this summer could cause another Texas power crisis" was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

Electricity outages in Texas could occur again this summer — just a few months after the devastating winter storm that left millions of Texans without power for days — if the state experiences a severe heat wave or drought combined with high demand for power, according to recent assessments by the state's grid operator.

Experts and company executives are warning that the power grid that covers most of the state is at risk of another crisis this summer, when demand for electricity typically peaks as homes and businesses crank up air conditioning to ride out the Texas heat. Texas is likely to see a hotter and drier summer than normal this year, according to an April climate outlook from the National Oceanic and Atmospheric Administration, and 2021 is very likely to rank among the 10 warmest years on record globally.

“This summer, I am as worried right now [about the grid] as I was coming into this winter," said Curt Morgan, CEO of Vistra Corp., an Irving-based power company. “Sounds like I'm the boy that cries wolf, but I'm not. I've seen this stuff repeat itself. We can have the same event happen if we don't fix this."

As state lawmakers continue debating how to improve the grid after February's storm nearly caused its collapse, on Tuesday Texans were asked to conserve electricity because the supply of power could barely keep up with demand. A significant chunk of the grid's power plants were offline due to maintenance this week, some a result of damage from the winter storm.

The warning triggered a torrent of outrage from residents and political leaders across the state who questioned why the Electric Reliability Council of Texas, which manages the grid, allowed it to come so close to emergency conditions on a relatively mild spring day. “I appreciate the increased effort toward transparency, but wow this is nervewracking to see in April," state Rep. Erin Zwiener, D-Driftwood, tweeted Tuesday.

Heading into the summer, ERCOT included three extreme scenarios in a preliminary assessment of the state's power resources for the summer — the most extreme calculations ERCOT has ever considered for the seasonal assessment. Each scenario would leave the grid short a significant amount of power, which would trigger outages to residents:

  • In the first scenario, a drought similar to what the state saw in 2011, combined with low winds, several natural gas plants offline and an increase in economic activity as the pandemic eases, would leave the power grid short 3,600 megawatts, or enough to power 720,000 homes.
  • Add low solar power generation to the first projection (say it's a cloudy day), and the grid would be short 7,500 megawatts, or enough to power 1.5 million homes.
  • In the most extreme scenario ERCOT considered, a severe heat wave across the entire state combined with outages for every major power source would leave the grid short 14,000 megawatts, or enough to power 2.8 million homes.

Power grids must keep supply and demand in balance at all times. When Texas' grid falls below its safety margin of 2,300 megawatts in excess supply, the grid operator starts taking additional precautions, like what happened on Tuesday, to avoid blackouts.

Pete Warnken, ERCOT's manager of resource adequacy, told reporters near the end of March that the grid operator included the extreme scenarios to “broaden the debate on how to make the grid more resilient." Still, he said ERCOT expects sufficient power reserves, “assuming normal conditions" this summer.

While the extreme scenarios have a very low chance of actually occurring, an unlikely and severe event happened in February, when extreme cold knocked out several different sources of power at once just as the cold triggered surging demand for power and natural gas fuel shortages. More than 4.8 million customers lost power and at least 111 people died during the storm.

A final summer assessment will be published May 6.

“A catastrophic event like the winter storm could not be predicted several months in advance," Warnken said, adding that the preliminary report isn't intended to forecast unprecedented events.

Rather, Warnken said the scenarios should help inform state leaders and the public of what's possible — “the idea is the planners and stakeholders are aware that there's a possibility something like that could happen," he said. “These have a much lower probability of occurring than the traditional grid scenarios."

Hot, dry summer

John Nielsen-Gammon, the Texas State Climatologist and director of the Texas Center for Climate Studies, said that this summer in Texas is shaping up to be hot and dry. While it's still early, he said temperatures this summer will depend on how much rain the state gets between now and June. Parts of the state — South Texas to far West Texas — have been in drought conditions for more than a year, he said.

“Temperatures during the summer depend a lot on how much rain there has been over the preceding several months," he said. “It's been fairly dry this past fall and winter and spring so far."

When heat waves hit large swaths of the state, that puts stress on the grid.

“In 2011, for example, most of the summer was a heat wave," Nielsen-Gammon said. That was the driest year on record in Texas, and what ERCOT based its extreme scenarios on this year. That summer, ERCOT took emergency precautions, but widespread outages did not occur.

“We were in an extreme drought with little moisture available [in 2011]," Nielsen-Gammon said. “Usually, if you have a heat wave, it's going to affect at least half the state if not most of it."

ERCOT is “carefully looking at" the potential for big heat waves and drought this year, Warnken said.

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A large area of Texas, and much of the Western U.S., will likely have above average temperatures this summer, according to an April analysis by the National Oceanic and Atmospheric Administration.

Credit: National Oceanic and Atmospheric Administration

Climate change has made summer droughts hotter and longer than they used to be in the southwest, according to a 2019 study authored by National Oceanic and Atmospheric Administration scientists. The study found that droughts occurring in today's warmer climate cause hotter temperatures than the same drought decades ago — the low soil moisture combined with higher temperatures produce stronger heat waves.

A large area of Texas will likely have above average temperatures this summer, according to an April 15 NOAA analysis.

Daniel Cohan, an associate professor of civil and environmental engineering at Rice University, is concerned about the power grid's performance this summer.

“If ERCOT is struggling to keep the lights on this week, that doesn't bode well for summer," Cohan said. “Certainly with climate change, it's possible we'll hit new records for heat waves."

And despite state lawmakers' advances on legislation aimed to address February's outages, Cohan said there is little the Legislature can do to better prepare the state's energy infrastructure for this summer. “It's too late to do a whole lot for this summer," he said.

Texas' susceptibility to blackouts has long been a concern for the North American Electric Reliability Corp., which has some authority to regulate power plants and oversee grid operators in the U.S.

“From my perspective, [Texas] doesn't have as much cushion as even ERCOT's math says that they should," said James Robb, its CEO and president.

Still, Michelle Michot Foss, a fellow in energy at Rice University's Baker Institute, said Texas' grid is better prepared for summer heat than extreme cold, and it's not unusual for the grid to creep close to its capacity in the hottest months.

“We deal with [heat] more often," she said. During the summer, she said, “the energy systems are better prepared."

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.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2021/04/15/texas-ercot-blackouts-summer-climate/.

The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.

Texas oil and gas regulators rushed to defend the industry’s image when the power went out

When the power went out for Marsha Hendler on Feb. 15, she rushed to her downtown San Antonio office to ride out the winter storm. Thankful to find the electricity and heat still on, she typed out an email to the elected officials who regulate her small, independent oil and gas company.

“I strongly urge you to make public statements, to develop a PR program around our current energy conditions," Hendler wrote at 2 p.m. that day to the three members of the Texas Railroad Commission, according to an email obtained by The Texas Tribune and ProPublica. “Assure citizens that blending oil and gas production with green [energy] will keep Texas energy strong."

It's a sentiment that many in the oil and gas industry echoed during a crisis that forced millions to endure freezing weather for days without electricity and eventually led to the deaths of more than 100 people. And even as Hendler typed, Railroad Commissioners Christi Craddick, Wayne Christian and Jim Wright, all Republicans, had already begun to do what she had requested.

Emails, tweets and public statements from the state commissioners during the Texas power crisis show that the elected regulators expressed immediate worry about the storm's impact on the image of the agency and the industry it regulates — the industry that funds much of their political campaigns. At times, commissioners retweeted or emphasized the same talking points published by the Texas Oil and Gas Association, one of the state's largest trade associations. They testified at public hearings and made public statements pushing back against criticisms of the natural gas industry's role in the February power outages. And in some cases, they attempted to redirect blame from the fossil fuel industry to wind power — a narrative that quickly gained traction among Texas Republicans on social media.

All sources of energy struggled to produce power during the storm, and the Texas power grid is particularly vulnerable to winter outages if natural gas-fired power plants don't produce enough. But suddenly, fossil fuel-powered electricity had been labeled “reliables" by Texas politicians.

“Many including myself have warned for years about the dangers of relying too heavily on unreliable, intermittent forms of electric generation like wind and solar to meet the energy needs for 30 million Texans," Christian wrote in his newsletter to supporters Feb. 17. “The issue isn't the existence of renewable energy, but that it has displaced reliable generation."

Defending natural gas

Energy experts during and after the power outages have pointed to how the state's reliance on natural gas-powered electric generation created a perfect storm: Natural gas and other “thermal" sources of power, like nuclear energy and coal, make up more than 80% of the state's projected power generation during the winter months, according to the Electric Reliability Council of Texas's seasonal assessment of power resources.

While the raw amount of power generated by natural gas increased during the storm as plants tried to match the rising demand, it was nowhere close to the amount of generation that should have been possible had the plants not experienced freezing components or natural gas fuel shortages.

Power plants initially tripped offline due to freezing conditions that plants were not built to withstand. Then some began to face fuel shortages. In many cases, there wasn't enough natural gas flowing through the pipes during the storm to power plants, even if they could run. A decadeslong trend of electrifying natural gas fuel facilities meant that when ERCOT implemented power outages to prevent the complete collapse of the grid, the outages inadvertently choked off fuel for plants that could have returned power to homes.

The scramble to restore the fuel supply was one of the major problems during the February crisis, and it caused some energy experts to call for reforms. James Robb, president and CEO of the North American Electric Reliability Corp., which has some authority to regulate power generators in the U.S., warned lawmakers in March that the natural gas system “was not built or operated with electric reliability first in mind."

But in their defense of natural gas, many Texas politicians cast blame elsewhere. Their most common target: wind-generated power, which also suffered serious failures due to frozen turbines but made up a significantly smaller share of the projected power for winter. Christian was among the loudest pushing that narrative: During a meeting Feb. 17, while the lights were still off across large parts of the state, he said that the storm showed the “dangers of subsidizing intermittent, unreliable energy" — an apparent reference to renewable energy like wind power.

After one Texan emailed each commissioner Feb. 17 asking what regulations the agency implemented leading up to the storm to ensure natural gas supply was reliable, Christian responded by again blaming renewable sources of energy. The storm would not have been so devastating had it not been for “decades of poor policy decisions prioritizing unreliable renewable energy sources at the expense of reliable electricity — something Texans now know is essential to our everyday lives," he wrote, according to the email provided to the Tribune.

Connie Koval, the retiree who asked the question, said in an interview with the Tribune that the response made her upset. “It made me angry that they are continuing to spread false narratives," Koval said. “He seemed to blame wind and solar."

But it's clear the commissioners saw a potential public relations crisis looming. After receiving the same inquiring email from Koval, Wright, who was elected to the Railroad Commission in November, forwarded the email to agency staff, saying the concerns would be “the greatest issue we will face from this event."

“We need to be ready to respond with a good plan of action," Wright wrote the morning of Feb. 18, the fourth day Texans were experiencing the power crisis. “I will provide the hurdles that are beyond our control in these regards when I am in the office next week as there are many."

Kate Zaykowski, who received that email from Wright and works for him as his director of public affairs, said in an interview with the Tribune that Wright was referring to his concern about the public image of the agency. But she said he was also worried that the public would not understand what requiring the industry to prepare for extreme weather would entail, and was worried about the industry's image as well.

“He believes, personally, that the oil and gas industry is important to Texas, and he wants the general public to understand why," Zaykowski said. “He also believes that it's important to regulate the industry."

There are signs that the campaign to blame wind power might not have worked: A poll of registered voters in Texas conducted by the University of Texas at Austin's Texas Politics Project and its Energy Institute, published Thursday, found that they cite the lack of winterization of power plants and the unprecedented nature of the storm as the top two factors in the power crisis. Only 35% of Texans surveyed pointed to an over-reliance on renewable energy as a major factor, compared with 64% of those surveyed who listed a lack of winterization of gas facilities.

Only 12% of those surveyed said they approved of the Railroad Commission's response to the storm.

Hendler, the independent oil operator in San Antonio, acknowledged that using wind and solar energy is necessary to slow and mitigate the effects of climate change. But she said she believes the economy still depends on burning oil, gas and its derivatives for transportation, energy and other products, such as plastic. She said she's concerned about an aggressive shift toward renewable energy that jeopardizes her industry and the larger state economy.

“Part of the job of the commission is a PR job, and I don't think they do that well," Hendler said. “I think that's one of the reasons that the [oil] industry takes the hits that it does."

Industry influence

The commissioners made their case far beyond emails and social media. In the days and weeks after the February power crisis, Christian published an opinion article in The Wall Street Journal defending the use of fossil fuels and created a website dedicated to the talking points that he emailed to Koval and others. The site, Reliable Grid Now, says it seeks to “educate the general public and lawmakers about the importance of reliable energy" and urges the public to send letters against renewable energy subsidies to lawmakers signed, “Make Texas energy reliable again!"

In a statement, Christian told the Tribune that Reliable Grid Now is a project paid for by his campaign and is unrelated to his duties as a state regulator. He said when he ran for office, he made a promise to govern conservatively, support free markets and stand up for consumers.

“I don't see myself as a spokesman for oil and gas, but I do have a responsibility to ensure our state's natural resources are produced responsibly for the economic benefit of the citizens I represent," Christian said.

Little more than a week after power was restored to most Texans, Craddick went to testify at the state Capitol, where she assured lawmakers that oil and gas did not need to be further regulated and pointed to power outages for natural gas shortages during the storm. And testifying before a U.S. House Committee on Energy and Commerce in late March, she said the oil and gas industry helped Texas during the winter storm.

“I sit before you today to state that these operators were not the problem," Craddick said. “The oil and gas industry was the solution."

The industry was simultaneously making the same case. In a tweet Feb. 24, The Texas Oil and Gas Association wrote that natural gas was “essential and indispensable" in heating and powering homes during the winter storm. The Texas Alliance of Energy Producers wrote in an opinion article for World Oil that natural gas did the “heavy lifting" during the February storm, because it was needed to both heat homes and generate electricity. The group also blamed wind generation: “It wasn't enough to meet the huge upward spike in demand, largely because electric power from wind generation was nowhere to be found."

Craddick also retweeted and posted images by the Texas Oil and Gas Association.

“Natural gas stepped up to power the vast majority of electricity generation in Texas," Craddick wrote in one tweet on Feb. 28, alongside a photo of a graph from the Texas Oil and Gas Association that showed power generation from natural gas increased during the February storm, without a comparison to the shortage of power the grid experienced.

In a statement to the Tribune, Craddick said she consumes information from a variety of sources, including TXOGA, and shares relevant and accurate information regardless of the source. She also wrote that the oil and gas industry is the most influential industry in Texas, and much of the state relies on its vitality.

“I support the industry's continued success not only because of my role as a public servant at the Railroad Commission, but also as a Texan who appreciated the overwhelming economic vibrancy of our state," Craddick said in a statement.

The industry supports Craddick and the other commissioners, too. Records show the commissioners' campaigns received hundreds of thousands of dollars in 2020 from industry groups and people who work in oil and gas. Craddick alone received more than $200,000 from people specifically identified in campaign finance reports as involved in natural gas or oil and gas work.

Craddick and her father, state Rep. Tom Craddick, R-Midland, have long been financially tied to the industry in Texas, a relationship recently highlighted by The Washington Post, which reported that the two own and manage land across the state that generated more than $100,000 from Texas' largest natural gas producers in 2019, according to state Ethics Commission records. In a statement, Christi Craddick said the Texas Ethics Commission laws ensure transparency of public officials and that she takes those laws seriously.

Virginia Palacios, executive director of Commission Shift, a newly formed nonprofit organization in Texas focused on environmental and consumer issues at the Railroad Commission, said the outsized influence of industry on the commission is hurting its ability to regulate, causing it instead to want to deflect blame for the power crisis.

“This is resulting in these industries buying the elections of the agencies that regulate them," Palacios said. “It would have been nice if we had a regulator who looked at the data, looked at the recommendations and made sound management decisions based on that analysis. But what we have are [commissioners] who are elected trying to look good so that they can get reelected."

Governor changes tune

The message has resonated with other state leaders and lawmakers. Gov. Greg Abbott, early in the storm, appeared to attempt to tamp down the narrative that renewable energy was solely to blame for the crisis.

In a tweet describing the situation Feb. 15, Abbott wrote that “the ability of some companies that generate the power has been frozen. This includes the natural gas & coal generators."

But he changed his tune by the time he appeared on Sean Hannity's Fox News show two days later. By then, a tweet by an energy author who promotes the use of fossil fuels had garnered significant attention by claiming the “root cause" of the Texas power crisis was national and state policies that prioritize wind and solar energy over other sources. Alex Epstein, the author, had emailed those same talking points to Abbott's office, email records first reported by NBC News show.

“Our wind and solar got shut down," Abbott said on the show. “And that thrust Texas into a situation where it was lacking power on a statewide basis. … As a result, it shows fossil fuels are necessary for the state of Texas as well as other states."

Weeks later, an Abbott spokesperson told the Tribune that the governor is treating all power sources equally as he pushes for reform of the electricity grid that covers much of the state.

Some bills identified by lawmakers as high priorities seek to place new costs on renewable power or take preventive strikes at climate action plans by cities.

At the annual Energy Day at the Capitol on March 24, state leaders and regulators touted the state's oil and gas production and largely ignored the February power outages. They also criticized renewable energy. Christian again reiterated his concern about the country's investments in renewable energy, which he called “undependable."

“We're putting most of our tax dollars into the 'undependables' at the cost and risk to lives and to the 'dependables' — oil, gas and coal," Christian told Todd Staples, president of the Texas Oil and Gas Association, during a discussion moderated and hosted by the industry group.

Abbott promoted a bill that would stop cities from banning natural gas as a fuel source for heating homes and other buildings. Staples claimed that the oil and gas industry would lead the U.S. to a “cleaner" future. Both Christian and Abbott hammered Democrats and the Biden administration during the event.

“With regard to the energy sector in Texas, and across the United States, it's changed because of the new administration that's seeking to impose these Green New Deal policies, Green New Deal policies that threaten fossil fuel production in the state of Texas like what we are accustomed to," Abbott said.

“But something else that we are accustomed to is fighting back, and protecting the fossil fuel industry in Texas," he said.

Lexi Churchill, a research reporter for the Texas Tribune/ProPublica investigative unit, contributed reporting.

Disclosure: The Texas Oil and Gas Association, Texas Alliance of Energy Producers and University of Texas at Austin have been financial supporters 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.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2021/04/05/texas-regulators-winter-storm/.

The Texas Tribune is a member-supported, nonpartisan newsroom informing and engaging Texans on state politics and policy. Learn more at texastribune.org.

Experts warn that reversing electricity prices from Texas winter storm could make things worse

Companies and entities at every level of the Texas energy supply chain are anxiously waiting to see whether the Texas Legislature will retroactively adjust the price of power in the state's electricity market during the February blackouts in which more than 50 people died.

Some have said they would benefit from a decision to readjust the market, while others have said they would be hurt by such a move. But who would be helped or hurt, and by how much, is unclear — and lawmakers and regulators have not said how they would retroactively change the state's electricity market more than a month after those prices settled.

Republican Lt. Gov. Dan Patrick has pressed regulators, lawmakers and even Republican Gov. Greg Abbott to readjust what happened in the market during the winter storm. In doing so, Patrick has turned the conversation about repricing into a political battle between the three most powerful people in Texas government.

Experts inside and outside the Capitol described this debate about repricing the market as a political sideshow about an issue that does not impact a majority of Texas electricity consumers and would do nothing to protect Texans from the next time extreme weather hits the state.

"I think it might actually do more harm than good," Joshua Rhodes, research associate at the Webber Energy Group at the University of Texas at Austin, said of the prospect of repricing the market.

In Texas, where private companies — as opposed to government — are largely the ones who invest in the energy space, Rhodes said: "If the rules change after the game, that may have a chilling effect on companies wanting to come in and invest money in Texas."

Rhodes said there would be fewer companies wanting to invest money in the Texas energy industry where the regulatory process is uncertain — and repricing would create great uncertainty.

The Electric Reliability Council of Texas manages the state's power grid and controls the prices power generators charge to retail electric providers, such as power companies and city utilities. Facing widespread outages during the storm, ERCOT set the price of electricity at $9,000 per megawatt-hour — the highest amount allowed.

Power generators typically sell electricity for much lower prices, sometimes even at a loss. The average wholesale price for energy last year was $21 per megawatt-hour, according to Daniel Cohan, an associate professor of civil and environmental engineering at Rice University.

The real profits come during a handful of hours each year — usually in the summer — when a large demand for energy pushes the price toward the $9,000 limit, Cohan said.

"Just like lottery tickets that don't pay off, most of the time the power that the companies are selling is almost worthless," he said.

The controversy stems from a 32-hour period during the freeze when prices were left high, even though ERCOT was no longer forcing outages due to a limited energy supply. An independent market monitor found that ERCOT erred in keeping the $9,000 cap in place, resulting in $16 billion in unnecessary charges to power companies and others. The monitor recommended energy sold during that period be repriced at a lower rate, which would allow ERCOT to claw back about $4.2 billion in payments. Outgoing ERCOT CEO Bill Magness insisted the high prices were necessary to incentivize generators to send power to the grid and to keep big customers from turning their power back on and increasing demand.

The power to reprice the market is in the hands of the state's utility regulator, the Public Utility Commission. The agency is run by a three-person board of directors appointed by the governor, and only one member — chair Arthur D'Andrea — remains after multiple resignations. Even he submitted his resignation to Abbott this week, but committed to remain until Abbott names a replacement and the state Senate confirms them, so the agency doesn't go without at least one commissioner.

The PUC oversees ERCOT, and while Abbott aimed his criticism in the aftermath of the blackouts at ERCOT, Patrick and many lawmakers have been zeroing in on the PUC.

Most of those who favor repricing have offered no public thoughts about how to actually carry out the proposal. It's not as simple as lowering the price of wholesale electricity. Prices are set based on supply and demand and are pegged to specific dates and times.

"In practice, it's not as easy as when it's, 'I'm a consumer, you overcharge me, I dispute a credit card charge,'" said Caitlin Smith, an energy adviser in Austin. "It's repricing a market."

Patrick, according to a spokesperson, said the price should be changed to what it would have been at 11:55 p.m. on Feb. 18, when ERCOT was no longer forcing outages.

Already, companies and entities at every tier of the state's energy system have been impacted. Some have lost large amounts of money and filed for bankruptcy, such as Brazos Electric Power Cooperative, which supplies electricity to 1.5 million customers. In filing for bankruptcy, the Waco-based company cited a $1.8 billion debt to ERCOT. Brazos is one of an unknown number of electricity companies facing enormous charges in the aftermath of the blackouts — and the company could benefit from the state retroactively reducing the price of electricity.

Experts are skeptical that repricing the market would actually save companies like Brazos from bankruptcy. D'Andrea and then-Commissioner Shelly Botkin voted in early March against repricing, making a similar argument. The financial pain has already been felt among companies and entities, a result that would be wiped away by repricing the market, said D'Andrea.

"You don't know who you're hurting," he said. "And you think you're protecting the consumer, and it turns out you're bankrupting [someone else]."

Denton Municipal Electric, an electric provider serving about 60,000 customers in the north Texas city of Denton, lost an estimated $100 to $130 million from the power outages, general manager Tony Puente said. The company, which also runs a natural gas-fired power plant, would be harmed even further by the state repricing the market during the week of the outages, Puente said.

The cost of gas also spiked during the storm, a financial burden for many power plants running on that fuel. But the state cannot retroactively change the price of gas during the outages like it can with electricity.

"Any repricing without a change on the natural gas side would pose a negative impact on our customers," Puente said in an interview.

Puente said he is still unsure how much money exactly was lost due to the outages. But once he's able to determine a figure, "then we've got to look at what financing strategies we can put in place," possibly a decadeslong process to potentially offset the cost for local consumers.

Some companies and cooperatives fared well during the outages. Mike Kezar, general manager of South Texas Electric Cooperative, testified to lawmakers that it emerged without taking a financial hit. But the company would likely take a blow from a market reprice, he said.

Experts said there is no way to know which companies or entities did well or were harmed following the outages unless those outfits have said so publicly.

The city-owned utility Austin Energy made money — earning $54 million as a result of the outages. In San Antonio, the municipally owned CPS Energy lost an estimated $1 billion from the outages — and was recently approved to borrow money from the city to partially make up for the massive loss.

With safety nets being deployed to aid entities such as CPS Energy, the debate over repricing the market is only further complicated with time. More than a month has now passed since winter weather swept across Texas and left millions without power and water.

The lieutenant governor and others who support repricing have said the primary consideration for doing so would be the benefit to consumers. But repricing would not help the Texans most devastated by the high energy prices during winter storm.

In the immediate aftermath, a number of Texans reported receiving astronomical energy bills — some as high as $20,000. Those customers belonged to indexed retail electric plans, where prices fluctuate with the price of wholesale electricity. Indexed plans could result in greater savings than the more common fixed-rate plans. But they also carry incredible risk, since they're vulnerable to large market swings like those that occurred during the winter storm.

Repricing would not have any effect on indexed plans, experts said. Griddy — the most prominent Texas provider of this kind — filed for bankruptcy on Monday and is under investigation by both the PUC and Texas Attorney General Ken Paxton's office. As part of its court filings, the company said it would forgive the nearly $29 million owed by its 29,000 customers. Paxton's office further said it would work to reimburse customers who had already paid.

The showdown over repricing took center stage at the Texas Legislature this week. The state Senate on Monday suspended its own rules and hastily ushered through Senate Bill 2142, which would force ERCOT to reverse billions in charges stemming from the winter storm. Included in the legislation was a deadline giving the grid operator until Saturday to act.

State Sen. Nathan Johnson, D-Dallas, told The Texas Tribune that repricing is needed to moderate the market. The $9,000 cap was never intended to be in place for days at a time, he said, so companies' extreme gains or losses need to be reined in.

"The idea of blaming the losers and crediting the winners, I think was just farcical," Johnson said. "Because the market wasn't functioning. And so a repricing, or a price correction in this instance, at least compresses us back into the boundaries of reality, or closer to it."

But it's not immediately clear whether or how much the alleged overbilling will affect regular Texans and what impact the Senate legislation would have on people's future electricity bills. Retail power providers buy power off the state market and then sell it to residential or commercial customers. At least some of the additional costs for the retail providers would seem likely to be passed on to consumers. But the financial hit varies from provider to provider. And some retail providers also supply power to the grid, adding more to the uncertainty.

Patrick contends repricing would benefit consumers, according to a spokesperson, who did not provide any details about how it would help Texans.

"Lowering the price of energy during the storm ultimately will lower the cost to consumers in both the short and long term," the spokesperson said.

State Sen. Bryan Hughes, R-Mineola, the bill's sponsor, and state Sen. Joan Huffman, R-Houston, whose committee heard the legislation, did not respond to requests for comment.

State Sen. Carol Alvarado, D-Houston, suggested that the uncertainty stems from ERCOT and the PUC because the agencies have not "looked at [repricing] close enough."

"To say that it would hurt other people or cause some catastrophe in the market — we don't know that yet," Alvarado said. "Nobody has shown us. Nobody has said, 'Well here's why we can't act on your bill, Senate, because if we do it, here's what it triggers.' "

On Tuesday, the Texas House dampened senators' hopes that legislative action on repricing would occur this week. House Speaker Dade Phelan, R-Beaumont, said in a statement that there had been "no error" in the operator's prices. He further expressed skepticism about reversing the charges, saying in a statement that doing so "based on disagreement with PUC and ERCOT's management decisions is an extraordinary government intervention into the free market."

Abbott has largely avoided taking a position on the issue. He previously named "inaccurate and excessive charges" after the storm as a legislative emergency item. But on Monday, the governor raised concerns about the constitutionality of repricing. D'Andrea, the outgoing PUC chair, has repeatedly said that repricing would be "illegal."

Abbott instead put the onus on the Legislature to "weed through all these complexities."

On Wednesday, Paxton released an opinion that argued the PUC has "complete authority" to order ERCOT to reprice electricity, rebuffing Abbott's and D'Andrea's concerns.

The House finished the week without taking up the Senate bill. Meanwhile, the House State Affairs Committee passed a slate of bills that would address the power grid's vulnerabilities and change the governance structure of ERCOT, among other things.

Patrick turned his attention to Abbott, urging the governor at a Thursday afternoon press conference to take executive action to reverse the charges.

"The governor is a very powerful person," Patrick said, ratcheting up pressure on Abbott to act after he refused to publicly back the Senate's approach. "He can do anything he wants."

ERCOT board members living outside of Texas now resigning amid winter storm aftermath

Five board members of the Electric Reliability Council of Texas — the entity that manages and operates the electricity grid that covers much of Texas — will resign on Wednesday, according to a notice to the Public Utility Commission. A sixth has withdrawn his application to the board.

All six live outside of Texas.

Sally Talberg, board chair; Peter Cramton, vice chair; Terry Bulger, finance and audit chair; and Raymond Hepper, human resources and governance committee chair, occupy the "unaffiliated" director positions on the board, which mean they must remain independent of any business ERCOT oversees. Their resignations will be effective at the end of the board's Wednesday meeting.

In addition, Vanessa Anesetti-Parra, the market segment director for the independent retail electric provider market segment, will also resign her position as a board member. Craig Ivey, who was slated to fill a vacant unaffiliated director position, withdrew his application.

ERCOT board members had come under fire last week when it was reported that some did not reside in the state. ERCOT officials, during a press conference last week, said it had temporarily removed personal information about the directors from its website because they were experiencing harassment.

The board has been criticized for last week's mass power outage during a winter storm that has claimed the lives of dozens of Texans. More than 4.5 million customers were without power at one point last week.

Gov. Greg Abbott had called on ERCOT board members to resign in the aftermath of the crisis and said in a statement Tuesday that he welcomes their resignations, promising to investigate the grid operator."I welcome the resignations," Abbott said.

"The lack of preparedness and transparency at ERCOT is unacceptable. We will ensure that the disastrous events of last week are never repeated."

ERCOT, a nonprofit, is governed by a board of directors, but overseen by the Public Utility Commission. Fifteen members serve on the ERCOT board, including the five unaffiliated director positions. The vacancies will not immediately be filled.

In order for ERCOT to maintain its certification as an independent organization, the board, which should consist of 16 members, must include five directors who are completely unaffiliated with "any market segment." Ivey would have been the fifth unaffiliated member.

"The board chairman, board vice chairman and both committee chairman leadership roles will be vacant," according to the notice submitted by attorneys representing ERCOT.

Lawsuits have already been filed against ERCOT in response to last week's crisis. It's unclear whether ERCOT, which falls under the PUC's jurisdiction, can be held liable by such suits: The Texas Supreme Court is expected to decide this year whether ERCOT is entitled to sovereign immunity, a legal principle that protects government agencies from lawsuits, after hearing another case that raised the question last year.

The board members were not all immediately available for comment or referred reporters to their resignation letters. In a joint letter to the rest of the board, the four unaffiliated directors cited the public concern that board members did not live in the state as the reason for their resignation. Ivey also cited not wanting to become a "distraction" from the more important response to the crisis in his letter.

"To allow state leaders a free hand with future direction and to eliminate distractions, we are resigning from the board," Talberg, Cramton, Bulger and Hepper wrote in the resignation letter.

The board directors wrote that before they resign, they will launch the review of the power crisis.

"Our hearts go out to all Texans who have had to go without electricity, heat, and water during the frigid temperatures and continue to face the tragic consequences of this emergency," they wrote. "We want what is best for ERCOT and for Texas."

Talberg, a former state utility regulator who served on the Michigan Public Utility Commission from 2013 to 2020, lives in Michigan. Talberg has sat on various state, regional and national boards and committees involving electricity, natural gas, oil, infrastructure and telecommunications issues. Cramton, a professor of economics at the University of Cologne and the University of Maryland, lives in Germany. Cramton has focused his research on electricity and financial markets. He has advised numerous governments and has been on the ERCOT board since 2015.

Bulger worked in the banking sector for 35 years, including various positions with ABN AMRO Bank in Canada, Europe and the U.S., and lives in Wheaton, Illinois. Hepper, a former litigator for the U.S. Department of Justice, retired in 2018 from working for the grid operator that manages the six-state New England electric system and wholesale markets.

Ivey, whose appointment was approved by ERCOT's members but was pending final approval from the PUC, is retired from more than three decades of experience in the utilities industry. He resides in Florida, according to an ERCOT announcement about his candidacy to the board. Most recently, he was the president of Consolidated Edison Co. of New York Inc., a subsidiary of Consolidated Edison Inc.

Anesetti-Parra oversees Just Energy's North American residential and commercial regulatory affairs and compliance division and has two decades of experience in the retail energy sector.

ERCOT representatives did not return calls seeking comment, but in a statement it said: "We look forward to working with the Texas Legislature, and we thank the outgoing Board Members for their service."

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