Houston Chronicle

FERC to look for incidents of market manipulati­on during storm.

FERC to screen for potential manipulati­on in gas, electricit­y

- By James Osborne and Paul Takahashi STAFF WRITERS

The Federal Energy Regulatory Commission said Monday it would examine power market activity over the last week for incidents of market manipulati­on as cold weather ravaged power grids in Texas and other states.

In Texas, the state’s grid operator reported that half of the state’s generating capacity went offline due to the cold or weather-related fuel shortages, forcing widespread blackouts and causing wholesale power prices to spike to more than 300 times normal levels.

FERC investigat­ors will be screening both natural gas and electricit­y markets for signs of manipulati­on, as part of “ongoing surveillan­ce of market participan­t behavior,” the commission said.

The damage, financial and human, is still being tallied following the outages that extended for more than four days and, at their peak, left more than 4 million Texans without electricit­y and heat amid bitterly cold temperatur­es.

On Monday, the retail power company Just Energy Group said it lost $250 million in Texas wholesale power markets last week when prices soared to the state maximum of $9,000 per megawatt hour and stayed there for days. Wholesale prices typically run between $20 and $30 per megawatt hour this time of year.

In a press release, the company said it is still assessing the extent of the losses, but they could drain its cash and threaten its ability to stay in businesses “unless there is corrective action by the Texas government.”

Analysts expect the extended period of soaring prices to force some retail power companies out of business. Since customers tend

to have contracts at fix rates, the retail power companies must absorb most of the astronomic­al costs.

Jesson Bradshaw, CEO of concierge service Energy Ogre, which helps 100,000 customers find retail electricit­y plans, said the power crisis could deal the market a blow as companies get forced out.

“If we have 100 participan­ts and that number gets cut in half, it’s less competitiv­e than it was before,” he said. “More competitio­n tends to be better for consumers.”

The power blackouts in Texas during last week were worse than those during California’s wildfires last year, according energy research firm S&P Global Platts.

The Electric Reliabilit­y Council of Texas, the manager of the state’s self-contained power grid, said about 43,000 megawatts of power went offline during the worst of the power crisis, representi­ng about half of the system’s capacity estimated at about 86,000 gigawatts, S&P Global Platts said.

Texas was short about 20,000 to 25,000 megawatts

of power, or enough to power 4 million to 5 million homes for three straight days.

By comparison, California Independen­t was short by 1,500 to 2,000 megawatts for two nights during the height of the summer wildfire season last summer, S&P Global Platts said.

“ERCOT’s difficulti­es made California’s rolling blackouts last summer appear trivial,” said Aneesh Prabhu, an S&P Global Ratings credit analyst.

Last week’s bitter cold was unpreceden­ted in its duration and expanse, knocking out power generators and bringing down

transmissi­on lines across the state just as Texans cranked up their thermostat­s. The mismatch between supply and forced ERCOT to implement rolling blackouts to maintain the grid’s stability, officials said.

Peak hourly power demand hit 69,200 megawatts on Feb. 14 and 15, surpassing the previous winter peak demand record of 65,900 megawatts in January 2018. In Texas, peak winter power demand is typically about 55,000 megawatts, Platts said.

The rolling blackouts shut down pumps at municipal water systems and

snuffed out heating systems that led to frozen and broken water pipes in homes, businesses and schools.

The blackouts are blamed in 48 deaths statewide, including at least 30 in the Houston area. Authoritie­s say victims died of exposure to the cold, the loss of essential medical devices and carbon monoxide poisoning as people sought warmth by running cars, portable generators and barbecue grills indoors.

 ?? Tom Fox / Dallas Morning News ?? Texas’ grid operator reported that half of the state’s generating capacity went offline due to weather-related fuel shortages.
Tom Fox / Dallas Morning News Texas’ grid operator reported that half of the state’s generating capacity went offline due to weather-related fuel shortages.

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