Operating out of a pair of dueling hearing facilities for two days last week, Texas lawmakers took their first shots at the electric industry as they began to try and grasp the complexities of a system that failed during mid-February’s “unprecedented weather event.”

Some legislators, blessed with a better understanding than others of the grid’s innerworkings, tried hard to understand what went wrong when ERCOT began dumping up to 20 GW of load Feb. 15, pushing much of its grid into blackout conditions as it tried to avoid a total collapse. They dug into the events that led to the load shed and the market’s pricing intricacies.

Others simply gave voice to their constituents’ frustrations, questioning the energy-only market’s wholesale price-indexed rate plans that have led to five-figure bills and why ERCOT’s Board of Directors included out-of-state directors.

“Who’s at fault? I don’t want to hear about systems; I want to know who’s at fault,” Rep. Todd Hunter (R) demanded of Curt Morgan and Mauricio Gutierrez, the respective CEOs of Vistra and NRG Energy, before the House State Affairs and Energy Resources committees on Thursday.

“I want the public to know who screwed up,” he continued. “That’s what people want to know. I want names and details. Tell me some specifics!”

“I don’t think you can put one thing at fault,” Gutierrez started to explain. Pressed again by Hunter, he then relented by listing ERCOT, the power generators, the transmission and distribution providers, and the Public Utility Commission before being cut off.

On the Senate side, lawmakers grilled ERCOT CEO Bill Magness for five uninterrupted hours that same day. PUC Chair DeAnn Walker followed him in the hot seat before the Senate’s Finance Committee and Business and Commerce Committee, staying there for two and a half hours.

The two then sat together for more than five hours before the House committees. Their “day” finally ended at 12:26 a.m. Friday.

Magness explained the decision-making process that led to the lead shed, repeating some of the same information he shared with his board the day before. (See related story, ERCOT Provides ‘Explanations, not Excuses’.)

Asked by Sen. John Whitmire (D) whether he would have done anything differently, Magness said he wouldn’t.

“Obviously, what you did didn’t work. I think that’s fair to say,” Whitmire said.

Magness disagreed.

“Respectfully, I’d say it worked from keeping us into a blackout that we’d still be in today,” he said. “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.”

Sen. Brandon Creighton (R), representing a far northern Houston suburb where an 11-year-old boy died of hypothermia in an unheated mobile home, pressed Magness on why ERCOT wasn’t more upfront with its communication regarding the winter weather and possibility of tight supplies.

Magness said those communications began Feb. 8 with an operating condition notice and included his appearance at a Feb. 13 press conference with Gov. Greg Abbott. Staff issued a press release Feb. 14 urging customer conservation, a message amplified by its Twitter feed.

“We do know lives were lost. In my opinion, rather than the dollars being considered, that’s the ultimate loss,” Creighton said. “It did not resonate with us that we could have very cold conditions coming in. It did not resonate to us that the grid could be at risk from a supply standpoint. Foreseeable or not, that could be a situation that occurs. … It’s very much my opinion that you define those communication protocols immediately.”

Magness nodded in agreement.

Under further questioning, he said staff alerted the generators and transmission providers that cold weather was coming and that it would be a “significant event.”

“Internally, we knew we may need to run the processes that go into load shed and emergency operations,” Magness said. “We try to make those contacts through the PUC. We shared those notices with PUC and the senior staff, and we continued to share those notices.”

“We have to review what happened and ensure it doesn’t happen again,” Walker said later. “It wasn’t just the operational area, but the communication area. Could all of us have done better? Absolutely.”

A number of legislators remained unconvinced by what they had heard.

Sen. Charles Schwertner (R) said he remained unsettled about ERCOT’s preparations for a “once-in-a-generation” storm, managing the crisis and making decisions, and called for the grid operator’s reform “to ensure this doesn’t happen again.”

“I still have great concerns about the entirety of the agency,” he said. “The testimony has not been, on my part, overall encouraging.”

Hunter pointed to Abbott’s Feb. 16 statement, when the governor said, “ERCOT failed to do its job, and Texans were left shivering in their homes without power.”

“He basically indicated … ERCOT failed to do its job and made assurances the Texas infrastructure was prepared for the winter storm, and it wasn’t,” he said. “It’s hard to tell the general public to put a lot of faith in ERCOT. I haven’t heard anything positive, and I see everybody running away.”

Legislators Focus on PUC’s Walker

When the two days of hearings concluded, Walker found herself sitting alongside ERCOT in the ring of incoming fire from lawmakers.

In all, more than a dozen legislators, Democrats and Republicans alike, called for her resignation following the hearings, citing her unwillingness to exert the commission’s oversight responsibility of ERCOT.

Putting on his best Perry Mason, Rep. Rafael Anchía (D) led Walker through more than 30 minutes of testimony, during which she admitted the PUC had “total” control over ERCOT, that the commission could have leveraged its authority in requiring emergency operations plans and weatherization standards, and that she could have been more proactive in warning the public.

“When did you make the clarion call to the public that we had a major problem and people were likely to die?” Anchía asked.

“I don’t remember when. I know we were sending things out Thursday and Friday,” Walker responded.

Eventually, she admitted that “we all made errors. I think I made errors in doing my job.”

“Do you think the public deserves an apology from the PUC?” Anchía questioned.

When Walker paused for four or five seconds, Anchía said, “The fact you’re hesitating is astonishing. It’s astonishing.

“No further questions,” he said, cutting off any further responses.

Anchía later issued a statement calling for Walker’s immediate resignation for “failing to perform required oversight duties of ERCOT.”

“After two days of testimony, it is clear to me that there was a dereliction of duty and that the people of Texas deserve nothing less than for Commissioner Walker to resign immediately,” he wrote. “Her inability to even muster an apology to Texans who endured freezing temperatures without heat or power and resulted in loss of life is inexcusable.”

Rep. Abel Herrero (D), vice chair of the Energy Resources Committee, noted that Abbott had praised the resignations of several of ERCOT’s board members. (See ERCOT Chair, 4 Directors to Resign.) He asked Walker if the governor, who appoints the PUC’s commissioners, had asked for her resignation.

“He has not,” she said.

The PUC on Friday tweeted it had opened two new projects related to the winter storm: a rulemaking on weatherization standards (51840) and a review of electric service emergency operations (51841). However, that was too late for some legislators.

Anchía, Herrero and six other lawmakers sent a letter to Walker on Friday asking for her resignation, alleging she had failed in the PUC’s mission to “protect customers.”

Saying that they had “lost all confidence that you can, or even care to, do your job,” the representatives wrote that, “at no time during your tenure as [PUC chair] have you taken accountability measures against ERCOT. There is little indication that you enforce, or are even aware of, some of the most critical functions of your agency.”

Rep. Jeff Leach (R) said Magness and Walker’s fellow commissioners, Abbott appointees Arthur D’Andrea and Shelly Botkin, should resign as well. He said it was “his strong belief” the long-term outages and the misery they caused could have been avoided.

Their resignations are “a necessary step so we and our constituents can be confident the right leadership is in place to ensure this never happens again in Texas,” Leach tweeted.

ERCOT Board Loses 2 More Directors

By the time Magness testified before the House committees, word had already leaked out that ERCOT had lost another director from its board. He acknowledged that an unnamed director had resigned (some quick online sleuthing revealed it was Brazos Electric Power CEO Clifton Karnei) and implied the decision had to do with financial issues at his cooperative.

“I hear board members are jumping ship like rats on a sinking ship,” Herrero said to Magness.

“I think they saw a desire to have Texas residents involved and said, ‘We may not be the best people for the board,’” Magness replied.

“My problem as a lawmaker is we’ve had five non-Texans bail on this state,” Hunter said. “When the heat came on, they bailed. I don’t know if that’s a preview of coming attractions or what.”

The non-Texans serving on the board had drawn much of the politicians’ and public’s ire, but Karnei, a Texas university system graduate, had served on the board since at least 2001 and represented the cooperative segment. He joined the five out-of-staters who submitted their resignations Feb. 23. A sixth non-Texan withdrew his nomination for a board seat.

But the names keep disappearing from the board’s webpage. Karnei’s departure was followed on Saturday by that of Austin Energy General Manager Jackie Sargent, who represented the municipal segment. Sargent has been critical of ERCOT’s actions in anticipating and responding to the blackouts.

“The system we have, requiring a utility to force over 30% of our customers to be without power for such an extended period of time, is unacceptable,” she told the Senate committee hearing on Friday.

The departures leave the 16-person board with eight confirmed directors. The five independent director positions unaffiliated with ERCOT market participants and three of the eight market segment positions are vacant, though all but one of the segment alternates remain.

Magness, Walker and Lori Cobos, CEO of the Office of Public Utility Counsel, round out the board. Walker is the only non-voting member.

The grid operator’s bylaws under the state’s Public Utility Regulatory Act require 50% of the seated directors be present to reach quorum, with quorum being three when the number of seated directors is less than six and not less than three. Quorum is not possible with two seated directors. The board’s next scheduled meeting is April 13.

The board’s independent directors are nominated for three-year terms by the board following a search process, and then approved by ERCOT members and, finally, the PUC. The chair and vice chair positions are required to be filled by independent directors.

Segment directors are nominated for single-year terms by their segment representation.

Magness told the House committees the unaffiliated directors were added because “if you had an all-industry board, you need nonbiased, non-industry folks on the board to round it out.”

Asked whether there should be more consumer representation on the board, Magness said, “Y’all pretty much made us, so you can change us.”

Rep. Will Metcalf (R) indicated that very well may happen.

“I want the best CEO running my company. I want to make sure we’ve got the best leader. I don’t want board members from outside Texas,” he said. “Going forward, I want the best person running the show, and I want board members from Texas.”

Vistra’s Morgan: ‘Lack of Urgency’

Vistra’s Morgan said he was frustrated by what he saw as a “lack of urgency” from others as the winter storm approach.

Morgan told the House committees on Thursday that the company’s meteorologist saw the same incoming weather that ERCOT did but thought it would create more demand that the grid operator was seeing. He said Vistra was projecting nearly 75 GW of demand, while, at the same time, ERCOT was expecting to break its winter peak of 65.9 GW. (See ERCOT Bracing for Winter Storm, Record Demand.)

The meteorologist “said we didn’t have enough generation on the ground,” Morgan said. “We did what we normally do: We reached out to some of you here. We were very concerned. I was surprised about the lack of urgency I got from some of the officials in the agencies. The level of urgency was just not there.

“We do know [ERCOT] moved the demand forecast up. Even with perfect execution, I thought we were short, but nothing like what happened,” he said.

Pressed on his comments, Morgan said of ERCOT staff, “It’s wrong to say they didn’t do anything. They do what they normally do. I don’t think there was a broader communication to the public that we were running into a problem. There was not this broad communication that said, ‘Hey, we could be into rolling blackouts on Monday.’”

Magness said he didn’t have any conversations with Dallas-based Vistra about differences in demand forecasts, but he did say his staff had discussions with the company’s representatives.

“Everyone, especially in North Texas, kept getting concerned. They were right in the middle of the worst part of the storm,” he said. “We understand those concerns. We felt the same way. We were getting our concerns out to the industry.”

ERCOT did issue a press release at 8:50 a.m. Feb. 14, warning of potential rolling blackouts. It later set a new winter demand peak at 69.2 GW several hours before generation fell off the grid.

Winterization to be Reckoned With

Winterization has emerged as the primary area of focus in preventing a reoccurrence of the rolling blackouts. Abbott has called to “mandate and fund” winterization and several legislators took up that call.

However, the same thing happened during the winter of 2011, when 14 GW of generation were knocked offline and forced ERCOT to call for rolling blackouts. The state fared much better during a 2018 winter storm, when only about 4 GW of generation was lost.

Winterization, recommended after 2012, has never been enforced.

“We’re not regulators, and we don’t have the [enforcement] authority, so we’re trying to assist generators in ERCOT [in getting] better from learning what we have learned and what others have learned,” Magness said.

Magness and several generation owners reminded the legislators that Texas’ energy infrastructure is built for the 100-plus-degree heat of July and August. Following the same winterization protections as in the northern states by encasing turbines with walls would lead to overheating and reduced efficiency during the heat of summer.

ERCOT joins with the Texas Reliability Entity to host an annual workshop on winterization practices. Generators are required to file their winterization plans with ERCOT, which in turn files a report with the PUC.

NRG’s Gutierrez said that in the end, the winterization efforts may not have mattered. Temperatures in the ERCOT footprint were much colder for longer than in 2011. The Dallas-Fort Worth metroplex saw a low of -2 degrees Fahrenheit and spent 140 hours below freezing. In 2011, those numbers were 13 and 101, respectively. Austin’s low was 6 F and Houston’s 13 F.

“Did we winterize? Yes,” he said. “Did we secure fuel supply? Yes. Did we bring as much capacity as we could? Yes. Did we bring critical supplies? Yes. Did we put all human resources? Yes. It was not enough, not enough.”