Saying ERCOT wanted to “provide explanations, not excuses,” CEO Bill Magness on Wednesday detailed for the Board of Directors the events that led up to last week’s near collapse of the grid that left millions of Texans in the cold and dark for abnormally long periods of time.

Dozens of deaths and disrupted water supplies have been attributed to the outages. The financial losses are expected to exceed even those of Hurricane Harvey in 2017.

“This was a devastating event for those of us who make our living in the power industry, but especially devastating to the people we work for,” Magness told the board during an emergency teleconference. “There’s no question there were tremendous, terrible impacts, including loss of life, that affected so many Texans. We regret the time it took to resolve this event.”

Magness’ presentation will likely serve as the basis of the grid operator’s appearance Thursday before a joint meeting of the Texas House of Representatives’ State Affairs and Energy Resources committees.

“We don’t want to see this happen again. We want to be part of that review,” Magness said. “We stand behind the actions we took during this event. We believe they’re very solid.”

ERCOT was “riding along fairly steady” on Feb. 14, Magness said, setting a new winter-peak demand record of 69.2 GW at 7:06 p.m. But as load began to drop off, generation did so even more quickly.

The operations center called its first energy emergency alert (EEA) at 12:15 a.m. Feb. 15, then elevated the EEA to Level 2 at 1:07 a.m. Thirteen minutes later, with generation continuing to fall off the system — 35.3 GW at that point — staff declared an EEA Level 3 and ordered its first load shed.

The operators continued to drop load to try and stay ahead of the generation losses. Magness said at its peak, ERCOT had to do without 48.6% of its installed capacity (52.3 GW of 107.5 GW).

By 1:50 a.m., the grid’s frequency level had dropped to 59.4 Hz, where it stayed for four minutes and 26 seconds. If the frequency had stayed at that level for a total of nine minutes, spinning turbines would have been involuntarily shut down and damaged, Magness said, leading to a complete blackout.

“We were definitely in a dangerous situation, and one we had to respond to,” Magness said. “The steps we took are outlined in federal NERC standards, actions you have to take to maintain frequency. You could have a situation where it’s out of the grid operators’ control, and we can’t have that happen.”

Staff called for another 6.5 GW of load shed before the grid returned to some semblance of normality at 1:55 a.m., but not before hitting a frequency low of 59.302 Hz.

“The only way to get back to 60 Hz effectively was to institute the amount of load shed we were instituting,” Magness said.

ERCOT eventually called for 20 GW of load shed on Feb. 15. Without almost half of the grid’s generating capacity, some local transmission providers were unable to effectively rotate their outages, leaving customers without power for more than two or three days.

Still, that was better than the alternative, as a complete blackout would have taken an “indeterminate amount” of time and been “extraordinarily difficult” to recover from, Magness said.

Further complicating matters: Of the 13 primary generating units ERCOT contracts with to restart the system during a black start, six were in outages that ranged from four to 127 hours. Two of those units’ alternate generators also experienced outages.

“We might still be talking today about bringing the system back,” Magness said.

Peter Cramton, one of five directors who announced Tuesday they would be resigning from the board, lauded ERCOT’s operators for their work during the crisis and referenced the oft used description of grid operators as being air traffic controllers. (See related story, ERCOT Chair, 4 Directors to Resign.)

“I think it’s important the public understand ERCOT was flying a 747,” he said. “It had not one, but two engines experience catastrophic failure, then flew the damaged plane for 103 hours before safely landing in the Hudson. In my mind, the men and women in the air traffic control room are heroes.”

ERCOT declared an operating condition notice Feb. 8 in advance of the extreme cold weather, which Magness said was expected to bring the coldest weather that Texas has seen in decades. Director Jackie Sargent, general manager of Austin Energy, said staff should have been more upfront with their concerns during a board meeting the following day. (See ERCOT Bracing for Winter Storm, Record Demand.)

“I certainly could have done a better job of emphasizing what was coming,” Magness said in apologizing. “I certainly could have covered that with the board in more depth as well.”

Market Issues Rise

Attention has also begun to focus on liquidity issues within ERCOT’s retail market, where real-time prices averaged $6,579.59/MWh Feb. 14-19 and spent days at the $9,000/MWh cap. In January, prices averaged $20.79/MWh.

Kenan Ögelman, vice president of commercial operations, said the prices have driven “extremely high collateral requirements” for all market participants. Those participants will begin to see their bills and revenue this week.

“The financial stress continues this week,” he said, noting staff, the Public Utility Commission and participants are working to address the market issues.

“We’ve have been authorized [by the PUC] to use additional discretion [in settling market transactions]. We are being judicious in applying that discretion,” Ögelman said. “The invoice process is there to ensure we bill folks and collect that money, so we can pay folks that incurred costs. Disrupting that process has a lot of liquidity risk. If I were not able to collect dollars, I would not be able to pay money, and that would have chilling downstream consequences.”

CFO Sean Taylor was unable to give a “solid answer” as to whether ERCOT has sufficient funds to cover market shortfalls. He said it has a “significant amount” of collateral on hand (about $2 billion) and access to $1 billion in congestion revenue rights funds.

“We do anticipate the major players paying us the money they owe us,” he said. “That mitigates a lot of concern if that does happen.”

Texas Gov. Greg Abbott has asked the legislature to look at shielding customers from high bills. Also Wednesday, the PUC announced it has open an investigation into retail electric providers’ (REPs) pricing plans that are indexed to wholesale rates and have led to four- and five-figure bills.

“An influx of complaints into our Customer Protection Division has caused concerns that questionable business practices might be exacerbating the situation,” PUC Executive Director Thomas Gleeson said.

Talberg Steps Down as Chair

The meeting marked the end of Sally Talberg’s short tenure as board chair. She, Cramton and two other independent directors, who have been criticized by Texas politicians for living out of state, announced their resignations Tuesday. Also resigning Tuesday was Just Energy’s Vanessa Anesetti-Parra, a Canadian who represented the independent REP market segment. The nominee for the last of its five independent director positions also withdrew his application.

“This discussion has been really helpful,” Talberg said. “I want to acknowledge the ERCOT staff and what they did over the past 10 days. They were not immune to the loss of heat. My heart goes out to all of you. This is not what anyone wanted.”

Talberg said as the meeting began that Southern Federal Power’s Randall Miller resigned as the alternate representative for the board’s independent REP segment.