ERCOT hearings continue in Austin

AUSTIN, Texas (KTRK) -- Hearings continued Friday in the Texas House and Senate committees on Texas' power grid and the actions of ERCOT and other utilities during the Feb. winter storm.

Lawmakers during day one of testimony called the February winter storm power outages "devastating," saying it was caused by "abominable action or inaction."

The meetings are being conducted with the goal of "Mak(ing) sure no one ever dies because our great state couldn't keep the power on."

BEFORE DAY 2 BEGAN: Ted Oberg talks about happened Thursday and what's to come
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State leaders continue to probe what went wrong with the power grid during the Feb. winter storm and what can be done to keep it from happening again.



ERCOT HEARING DAY 1: Lawmakers call outages 'devastating'
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ERCOT HEARING DAY 1: CEOs of two energy companies serving the state are saying they and ERCOT bear the blame from the outages.



THURSDAY
6:30 P.M. Christi Craddick, chairwoman of the Texas Railroad Commission which regulates the oil and gas industry, said the power outages caused a "domino effect" but that natural gas operators were "not the problem."

"When you ask if we have enough gas in the state, the answer is yes, if we can keep the electricity on," Craddick said.

5:45 P.M. When asked if there's anything she would do differently, PUC Chairwoman DeAnn Walker says "absolutely."

"I have some concerns about some of the decisions made last week," Walker said. "I think that's part of what we have to review, is what happened, and make sure it never happens again. And it wasn't just in the operations, it was in the communication area and other areas."

4:49 P.M. Fourteen minutes later, after withering criticism from Sen. Brandon Creighton, R-Conroe, Walker told the senator she doesn't yet have any "specific suggestions" or recommendations to improve the electric system that failed last week.

4:35 P.M. Walker says an issue with a computer algorithm caused less electricity to be produced on Feb. 15, during the first day of the major blackouts.

"Are you telling me that on Monday morning, perhaps, we had generators that were producing less electricity than they were capable of producing?" Sen. Nathan Johnson asked Walker.

"The system was telling them to, so that was part of what was going on," Walker said, agreeing that less electricity was produced than could have been due to the system's algorithm.

3:35 P.M. Public Utility Commission Chairman DeAnn Walker said ERCOT CEO Bill Magness made it sound like the commission has great authority and oversight over the power grid, but she said "to say that we have the amount of power that was implied is just wrong."

3:30 P.M. Walker begins testifying before the Texas Senate and says there needs to be better coordination between the electric and gas industries.

She also said they need to be better prepared if they do enter a situation where rolling outages are needed.

"Rolling outages, we need to look at. Rolling outages were never envisioned for something like this," Walker said.

Walker reiterates that the change to wholesale pricing during the outages did not impact consumers with fixed rate prices, but did impact Griddy customers, who pay for electricity based on wholesale prices.

She said when the PUC board adopted a $9,000 per megawatt hour price cap for wholesale pricing in the midst of the outages, she thinks the board never envisioned having the high prices in place for four or five days.

3:15 P.M. ERCOT CEO Bill Magness testified for more than five hours before the Texas Senate, ending on a comment from a lawmaker who said, "Before you leave, I do have to say, on the one hand you say you were prepared for this three days before, but you also say we came within minutes of crashing the entire system, which would take the vast majority of the state into a black situation for weeks."

Magness responded, saying, "We were prepared to keep that from happening. I know that's not a good answer to people who suffered, but we were prepared to keep that from happening. ... If we had not done the things we're trained to do and made the hard decisions that we know we have to make in this business, we could have been (in a blackout). ... We can't go through this kind of event, just for the human cost again, but we never want to black out the system, so that's the problem and there's nobody that wants to solve it any more than me, so I am happy to help, if I can be helpful."

3:10 P.M. Magness said generators invoice ERCOT daily and are paid daily. Lawmakers ask Magness why it's not possible to pause billing, just for a few days, to let some investigation happen on the pricing for consumers.

"From ERCOT's perspective, given that we're in the middle of all this, it would be nice if we could. I think the challenge is ... they need to pay their bills, especially they need to pay the gas bills" or they won't be able to get more gas for consumers, Magness said.

Mangess said ERCOT is doing the best it can to get through it without having a big loss to the market.

12:25 P.M. Griddy may be trouble: Lawmakers have heard from Texans with sky-high bills from variable rate plans like Griddy.

Curt Morgan, the CEO of Vistra, tells the House committee, "We shouldn't expose our people to that - sometimes you have to draw a line and say that is not in the best interest of the public."

Mauricio Gutierrez, NRG CEO, said he was immediately concerned about the plans when he first heard about them. Companies should bear volatility, not customer, he said.

12:20 P.M. CONCERNED ABOUT THE FUTURE: Asked about the future, both CEOs tell lawmakers they are concerned about the current system being able to handle the demands of the future. Both suggest there is not enough certainty or incentive to build more generation as the system currently exists.

12:10 P.M. Under questioning from Rep. Eddie Lucio, D-Brownsville, executives who make and sell power to Texans admit they could have done a better job telling residents the severity of the likely outages. Earlier in the day, Vistra's CEO told lawmakers his company reached out to ERCOT to warn then the outages were going to be severe and ERCOT's forecast was wrong. Vistra says ERCOT never replied

11:00 A.M. When State Sen. John Whitmire, D-Houston, asked ERCOT CEO Bill Magness what human error occurred during last week's mass outages, and if he would change anything about what happened last week, Magness says he "feels a great deal of responsibility and remorse about the event," but pointed out he wouldn't change anything. He says gas supply and availability were the issue, but they did everything they could.

"Obviously, what you did didn't work. I think that's fair to say," Whitmire said.

Magness responded: "Respectfully, I'd say it worked from keeping us into a blackout that we'd still be in today. That's why we did it. Now it didn't work for people's lives, but it worked to preserve the integrity of the system."

10:49 A.M. Cutting to the heart of the matter, Rep. Todd Hunter, R-Corpus Christi, asks, "I want to know who is at fault? Who screwed up?"

NRG CEO Mauricio Gutierrez says it is widespread among ERCOT, the Public Utilities Commission, generators and transmission companies.

Vistra CEO Curt Morgan calls last week a "colossal failure" for which blame is shared all around.

"The only way we got to where we ended up is (the fault of many people)," said Morgan.

Hunter then turns: "I want to know who turned my power off?"

10:30 A.M. - ERCOT CEO Bill Magness answers questions from lawmakers in the Senate, saying, "I'll tell you the part I feel is on me. ... We were solving problems, but I think we should have been talking more to people about what this was starting to look like."



Meanwhile, NRG CEO Mauricio Gutierrez tells the House, "We prepared as much as we could, but that is the question that haunts me. What more could we do ... It was not enough. We have a system-wide problem."

10:20 A.M.: Curt Morgan, the CEO of Vistra Energy, tells the House that ERCOT did not address "the issues that I raised about deliverability of gas or critical infrastructure in any serious way." He says they notified ERCOT on Feb. 10 about concerns, but does not think the grid operator responded with urgency.

"We need to get out and talk to elected officials and also the regulators and tell them that we're seeing something different, and we told them we were very concerned. That started on the 10th and 11th when those outreaches went on," Morgan said.

He went on to say, "What I didn't see was sort of a broad-based plan to communicate to the public that we felt like it was not an if, it was a when that we were going to lose power."

9:55 A.M. - NRG CEO Mauricio Gutierrez says its generation fleet was impacted by weather-related frequency and fuel supply issues.

"We've had a winter readiness program even before 2011," he says. "Every year, there is a 'lessons-learned' meeting among our plant managers to just figure out what went wrong and fix it. We've now had 10 years of lessons learned."

Guitierrez says the winter event was unprecedented, and his plants will use this latest storm as its new benchmark when it comes to winterizing equipment.

"There are things we have never seen in our power plants" during this latest storm, he said.

9:20 A.M: In the hearing in the Texas House, Curt Morgan, the CEO of Vistra Energy, said there was not enough generation on the ground; his company spent $10 million to get ready and 'the lack or urgency wasn't there.' "The big story here is the failure of the gas system to perform."

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