Former Texas Public Utility Commissioners Issue Report on Preventing Grid Failure

AUSTIN, Texas — Five former Public Utility Commission of Texas commissioners and a senior regulatory advisor published a report detailing recommendations on how to improve the reliability of the state’s electric grid during extreme weather events.

In their report, the commissioners identified problems that contributed to mass power outages across the state in February that led to the Electric Reliability Council of Texas ordering all local utilities to decrease power demand. The report states that the grid failures “led to the deaths of nearly 200 Texans,” although the commissioners cited a BuzzFeed report that estimates around 700 people were killed during the week with the worst power outages.

“The Texas Legislature has sent to Governor Abbott new statutes to address some of the problems that contributed to this disaster,” the text of the report states. “But beyond these new laws, Texas has more work ahead to protect customers and ensure that our energy infrastructure works adequately. The February outages were triggered by an extreme weather event but were exacerbated by underlying problems that affected the entire energy system from the production of natural gas to the delivery of electricity to the customer.”

Nearly 8% of ERCOT’s generation fleet was down for maintenance on Feb. 14, just as the winter storm arrived, according to data released by the council. Another 22 gigawatts, or 21% of ERCOT’s total generation fleet failed before 1 a.m. the following morning, leading the council to “initiate customer load-shedding.”

The majority of ERCOT’s gas, coal and nuclear plants failed due to “insufficient preparation” for the intense cold or because fuel became unavailable. The greatest loss in production came from natural gas generators, and 46% of ERCOT’s total thermal generation capacity either failed or became unavailable throughout the outage.

In response, the commissioners recommended imposing “mandatory weatherization to minimum standards” for natural gas production and pipelines. A new reliability statute passed by the Texas Legislature mandates the public utility commission to adopt power plant winterization standards, informed by adverse weather forecasts, with compliance requirements and penalties for non-performance.

“It is not clear that SB3’s new requirements will be sufficient to assure continuing delivery of natural gas at reasonable prices during future winter emergencies,” the text of the report states. “SB3 places no compliance deadlines on the natural gas weatherization requirement, so the interdependence between natural gas supply and electric power generation could remain unaddressed for some time.” 

However, the commissioners point out in the report the statute presupposes that “weatherization is only needed for identified supply chain facilities,” which does not account for the “true interconnectedness of the entire natural gas delivery infrastructure.”

Should only natural gas facilities that “directly serve electric generators” be winterized, others could still fail and lead to electricity shortages. Consequently, the report suggests the Legislature create a clear definition of “price gouging” during emergencies and impose limits on how market participants can raise natural gas prices in emergency conditions. 

“Between leaky buildings, lack of electricity and poor public communications, over 100 Texans died of hypothermia or carbon monoxide poisoning during the February blackout,” the report states. “Texas must fix this by improving the energy efficiency of our buildings. Over half of Texas homes were built before the state adopted building energy codes with insulation requirements in 2001.”

Because more than 60% of homes in the state are heated with electricity rather than gas, over 40% of the total Texas electric demand was for heating. Electricity demand for the homes could have been reduced by at least 15 gigawatts — enough to offset the loss of “most of the generators that failed on February 14 and 15” — if they were outfitted with energy-efficient building shells and heaters in advance of the storm.

Further, the commissioners recommended updating Texas building energy codes, requiring them to be automatically updated as just as international building codes are. Energy efficiency requirements in the state were last updated in 2016 in compliance with the 2015 International Energy Efficiency Code and 2015 International Residential Energy Code.

Other issues with the energy system found by the commissioners’ report include poor supply and demand forecasting by ERCOT, the lack of outage rotations by distributor utilities and ineffective power market operation. Further, the report cites inadequate governance by PUCT and ERCOT, and a “lack of information on the contributing causes of the blackout” and the subsequent actions of “power plants, fuel suppliers, regulators, and customers before and during the event.”

The commissioners make a wide swath of recommendations in the report to the identified problems with the state’s energy system. Among them, the commissioners suggest PUCT conduct a formal study to determine more appropriate energy efficiency goals and programs for Texas, raise funding for low-income energy-efficiency retrofits, increase emergency grid demand response, improved demand forecasting by ERCOT, and require critical power facilities to have backup capabilities.

“Many factors contributed to the widespread ERCOT grid outages that occurred during the Arctic freeze in February 2021,” a release from the Cynthia and George Mitchell Foundation on the report read. “This outage was a wake-up call about the need to fix multiple policy, operational and planning failures across our state’s electric, water and natural gas systems.  We must address fully the causes of this winter’s weather challenge and prepare to deal with emerging economic, technology and extreme weather realities.”

The full set of recommendations issued in the commissioners’ report can be found here.