‘Obvious’ blackout warnings missed
Days before storm, ERCOT predicted high power demand
WASHINGTON — On Feb. 10, five days before frigid temperatures left Texas in the dark for days, the state’s grid manager released its forecast for power demand, predicting it would spike to more than 70,000 megawatt hours that coming Sunday — a record for Texas in winter.
The forecast from the Electric Reliability Council of Texas, or ERCOT, went little noticed among the general public. But for energy traders, who live and die by the surpluses and shortages of the market, the demand prediction was dangerously close to all of the power that would be available in perfect conditions — let alone during the freakish cold snap meteorologists were predicting.
“ERCOT’s own forecast was showing major capacity deficiencies,” said Adam Sinn, president of the electricity trading firm Aspire Commodities. “How could ERCOT not see this coming? It was so obvious.”
To what degree ERCOT missed the signs of the coming chaos, or just chose to stay quiet as the crisis approached, remains unclear. But by the time the Feb. 10 forecast was released, ERCOT’s options already were limited under the state’s deregulated electricity markets, in which power generators determine when they run and how they maintain their plants.
In a system in which prices drive both production and planning, the roots of the crisis can be traced back to November,
when ERCOT released its winter forecast. The grid manager predicted that seasonal power demand, or load, would peak at about 58,000 megawatts — far below the nearly 69,000 megawatts reached Sunday, Feb. 14, just before the system began to fail.
Had the forecast accounted for the possibility of more severe weather and projected, say, a peak demand of 65,000 megawatts in February — near the previous record — generators might have been better prepared to take advantage of higher prices in both the futures and real-time markets, said Aneesh Prabhu, an analyst with S&P Global Platts, an energy research firm.
“That’s how supply and demand works,” he said.
“No construct will help you mitigate risk when you miscalculate the load by 20 percent.”
‘Warning signs’
In the days leading up to the winter storm, ERCOT made little public showing of the threat posed by the unusually cold temperatures beginning to sweep down from the north. On Tuesday, one day before Sinn and other traders took note of the alarming power forecast, ERCOT CEO Bill Magness briefed the grid operator’s board for less than a minute on the coming weather.
“It looks like we will have a little bit of winter weather to contend with,” he said, before moving on to discussing last year’s revenues.
But concern was starting to spread. At Vistra Energy, the power giant headquartered outside Dallas, executives reached out to ERCOT on the Wednesday before the storm hit. They warned that not enough was being done to protect the grid and alert the public about what was coming.
“The warning signs were there, but the public was unaware of the gravity of the situation, which led to people being unable to respond and make the necessary adjustments for their families,” the company said in a statement. “The coordination and planning by authorities across the broader energy sector were seemingly disproportionate to the severity of the situation.”
ERCOT has so far declined to comment on that criticism, but at a hearing last week, Magness said he believed there would be enough generation to get through the cold snap with short-lived rolling blackouts like those employed in previous winter storms.
“What we were seeing at that time, we believed we could manage with rotating outages that were not extreme,” he said.
In truth, with just days to prepare before much of Texas was plunged into singledigit temperatures, it might have been too late.
ERCOT’s role
While often described as Texas’ grid operator, ERCOT is, by its own description, more of an “air traffic controller” — coordinating the flow of electricity from generators to match the everchanging need of customers.
But it has no authority to tell power plants when to operate and how to prepare for inclement weather. It relies on the state’s wholesale power market to provide incentive.
“It’s not really ERCOT’s job to warn the public. It’s up to the government,” said Barbara Clemenhage, a former ERCOT board member and a vice president with the consulting firm Customized Energy Solutions. “Nobody wants to say out loud you’re going to be in the dark, from a political perspective. You don’t want to scare the public.”
ERCOT put out its first advisory to generators that they should begin preparing for the coming weather on Monday, Feb. 8, advising them to insulate their equipment from the cold, including wrapping pipes and gauges in insulation and setting up wind breaks.
Over the course of the week, ERCOT steadily ramped up those warnings, enlisting power plants out for scheduled maintenance to come back online early and canceling maintenance on transmission lines, Magness testified last week.
By Sunday morning, the scale of the problem was coming into focus for public officials. ERCOT put out a notice asking the public to lower their thermostats to try and conserve power. Gov. Greg Abbott declared a state of emergency and went on television warning the public the state was about to endure cold weather “unprecedented in Texas history.”
Wind farms already were shutting down due to ice accumulation on their turbine’s blades. That was only the beginning, as temperatures across much of Texas plunged.
Shortly after 5 a.m. Monday, one of the state’s two nuclear power plants, the South Texas Project, lost a reactor and more than 1,300 megawatts of generating capacity when one of the lines feeding its water pumps froze up.
It quickly became clear that frozen power plants and wind turbines were only a fraction of the problem. The state’s natural gas system, upon which most of ERCOT’s power supply depends, was also beginning to freeze up, as ice-clogged wellheads lowered production and compressor stations that help move the gas through pipelines lost power.
“Our biggest issue was fuel supply,” said the employee of one power company, who spoke on the condition of anonymity to discuss internal operations. “At times, the pressure was so low in the pipelines the power plants couldn’t run.”
Over the morning, the amount of electricity on the power grid began to fall to dangerous levels, risking a disastrous grid shutdown that could take weeks to recover. Shortly after 1 a.m. Monday, ERCOT send out an emergency notice warning there “may be a need” to begin rotating outages.
Thirteen minutes later, the outages began.
“The fact we didn’t go into a cascading outage is a miracle. There were times it was touch and go,” said Clemenhage, the former ERCOT official. “It’s ERCOT’s job to keep the planes in the air, and what they did frankly was pretty heroic. They don’t control the weatherization of the units or the transmission system. They are given what they get.”
Instead, ERCOT opted for curtailing power across the grid, leaving transmission utilities such as CenterPoint and Oncor to shut power to some neighborhoods while maintaining it for hospitals and businesses deemed critical.
ERCOT officials believed that generators would come back online in relatively short order, steadily increasing the power supply and reducing outages. Some plants did get back online, but continued shortages in the natural gas system, driven by worsening weather conditions, limited their ability to generate power.
“The conventional wisdom through the weekend was that the cold would be very severe Monday and leak into Tuesday and then peter out,” Prabhu said. “But then it was Monday, and (ERCOT) realized the polar vortex was coming much farther south than they anticipated.”
By that point, much of the state was in darkness, leaving families to huddle together for warmth, waiting for the lights and their heating systems to come back online.
“ERCOT’s own forecast was showing major capacity deficiencies. How could ERCOT not see this coming? It was so obvious.”
Adam Sinn, president of electricity trading firm Aspire Commodities