The Texas Senate Committee on Business and Commerce is meeting Tuesday to discuss the implementation of several bills in the legislature that aimed to prevent rolling blackouts in the future.
SB 2 sets up a selection committee of lawmakers to appoint the majority of members to ERCOT's board of directors. The committee would have one person appointed by the governor, one by the lieutenant governor and one by the speaker of the House. The committee will then select eight of 11 ERCOT board members.
SB 3 requires power generators to improve plants to withstand more extreme weather and for weatherization of transmission lines.
Tuesday, the committee heard from several stakeholders, including the interim president of ERCOT. Brad Jones says he has worked to build a more "collaborative" relationship with the Public Utility Commission.
"I meet almost every day with one of the commissioners," Jones says. "I meet with the chairman over the weekend and on evenings. We spend a lot of time talking through issues in the market and how ERCOT can help to address them."
Previous Chief Executive Officer Bill Magness was given notice of termination in March; Jones was named interim president in May. In October, he says he will start a "listening tour," stopping in the state's largest metro areas.
"The goal is to listen to Texans, listen to what their concerns are, what they want to see us address, to get their thoughts and also to answer their questions," Jones says. "To give them the confidence I hope to restore in ERCOT."
Jones says ERCOT has addressed all recommendations from the Federal Energy Regulatory Commission. He says ERCOT has developed its own "road map" related to those recommendations, and a list of progress is updated weekly HERE.
Jones says ERCOT has already started implementing changes. In June, ERCOT issued a "Conservation Alert," urging Texans to conserve electricity when possible.
"To me, it was bizarre when we all started getting calls and publicity in the summer to reduce use," says Sen. John Whitmire (D-Houston). "When you checked with your folks, it was the overuse of maintenance at the same time by many of our generators. I just can't imagine how you got in that situation. How do you prevent that same situation going forward?"
Jones says producers were having uncontrolled mechanical issues, not planned maintenance. He says those outages and lower solar and wind output than normal combined to stress the grid.
Jones says the call for conservation prevented the grid from being overextended.
"Our actions on conservation, asking for conservation by all Texans, was not to get us out of a jam but to prevent us from getting into a jam," he says. "In the past, ERCOT has always done that very late. We've always waited until the last moment, trying to stay out of the market and not influence market prices, but we called for that reaction early and asked all Texans to assist us. Five hundred megawatts were given to us very quickly, so we had an extraordinary response by the citizens of Texas to assist us to keep the grid reliable. We did not get into a dangerous situation. We stayed out of one."
Texas Railroad Commission Executive Director Wei Wang says they are now investigating weatherization of natural gas production and distribution facilities.
"We are in the process of standing up our critical infrastructure division which will hire inspectors and auditors," he says.
"So we have had a good seven months, and you haven't assessed them all. You're in the process of standing up to get inspectors to come out. Don't you think that's a little late since we sure don't have seven months before our next winter starts?" asked Sen. Donna Campbell (R-New Braunfels).
"I recognize the urgency," Wang replied.
"I don't think you do," Campbell said.
Wang said they have reviewed reports on why natural gas production was lost, and they are now gathering information and taking steps to ensure production facilities would be listed as critical infrastructure and continue receiving power during rolling blackouts.
Peter Lake, chairman of the Texas Public Utility Commission, says they are now buying more reserves based on real-time conditions instead of a fixed number. He says ERCOT is also now "adopting an abundance of caution."
"In the past, ERCOT was directed not to take any out-of-market action until the very last minute when the grid was right at the precipice of emergency conditions. We've turned that on its head," Lake says. "This summer, Brad and his team have taken out-of-market action sooner rather than later. That is a tremendous shift in the way that market works."
Lake says PUC has also implemented a rule that decouples "scarcity pricing" from fuel costs.
"We've removed the possibility of underlying fuel prices that send the electricity price into the stratosphere like we saw during the winter event," he says.
He says PUC would still encourage generation by paying plants to cover their costs, but "we're not going to do it on an artificial multiple of an index of various fuel prices." He says if ERCOT has to order blackouts, the price will be capped.
Jones, the interim president of ERCOT, says they plan to present a blueprint on its long-term plans in December.
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