February 17, 2011 - Texas blackout aftermath

When Texas experienced rolling blackouts earlier this month due to severe weather and disruptions to generation and the electric grid, over one million customers lost power intermittently.  Imposing rolling blackouts on customers is an extraordinary measure rarely seen in U.S. power markets.  Typically, utilities and regional transmission organizations will do everything they can to ensure adequate electric supply for all customers.  So what went wrong in Texas?

That question has been on the minds of electricity customers, and is now drawing increased attention by regulatory agencies.  On February 7, less than a week after these outages, the nation’s electric reliability organization North American Electric Reliability Corporation (NERC) announced a joint investigation in coordination with Texas Reliability Entity, Inc. and the Western Electricity Coordinating Council, to understand exactly what happened and what can be done in the future to prevent such electricity curtailment.  In its announcement of its investigation, NERC noted that it will examine whether the recent shift towards greater reliance on natural gas to produce electricity played any role in the outages.

Now, the Federal Energy Regulatory Commission (FERC) has initiated a staff inquiry into the outages and the restrictions of natural gas and electricity service in Texas and other western states.  This inquiry, docketed as Docket No. AD11-9-000, focused on disruption to the bulk of power system in Texas and Arizona as well as disruptions to natural gas delivery in Texas, in Mexico and elsewhere in the southwest.  Notably, FERC’s order opening this investigation states that this will not be an enforcement investigation; rather, this investigation will identify the problems and gather facts, leaving the decision on whether to initiate enforcement proceedings to a later date.  FERC has designated a staff task force to conduct this inquiry.

Meanwhile, Texas’ main electric grid operator, the Electric Reliability Council of Texas (ERCOT) is taking a look at its own internal procedure with an eye to improving its response to situations such as this.  Over the course of the day on February 2, 82 power plants with the combined generating capacity of 11,000 megawatts went offline.  During the peak of the outage, 80,000 megawatts was offline.  Of these, 59% were powered by natural gas, 40% by coal, and 1% by wind.

We shall soon see what these inquiries find.