Catastrophic Texas power outages prompt finger pointing and blame shifting at legislative hearings

Texas lawmakers investigating this month’s devastating power outages during a massive winter storm grilled power-grid officials Thursday and questioned whether state regulators did enough. Most of what they got during simultaneous public hearings in the Texas Senate and House was finger pointing.

“This is the largest train wreck in the history of deregulated electricity,” said state Sen. Brandon Creighton, R-Conroe.

Officials with the Electric Reliability Council of Texas avoided taking full responsibility for the outages that left millions without power in subfreezing temperatures and disrupted water service for large swaths of the state. ERCOT officials, energy executives, utility company bosses and a meteorologist were among those questioned about the outages before committees in both chambers of the Texas Legislature.

After 11 p.m. Thursday, following more than 14 hours of testimony, state Rep. Todd Hunter, R-Corpus Christi, asked ERCOT CEO Bill Magness how much he earns, and where that money comes from. Magness answered that he made $803,000, which came from Texans paying their electric bills.

Earlier in the day, state Sen. John Whitmire, D-Houston, asked whether lawmakers should reexamine ERCOT’s governance structure.

“Y’all made us,” Magness said. “You should change us.”

ERCOT last week ordered rotating power outages, but experts said many of Texas’ power generators failed because they are not properly equipped to handle cold weather. Instead of half-hour increments, many Texans were left without power for hours or even days. Late Tuesday, Magness told Hunter ERCOT didn't accurately project how bad the situation was going to be.

Under an electricity system the Legislature shifted to two decades ago, power companies aren’t required to produce enough electricity to get the state through crises like the one last week. In fact, they are incentivized to ramp up generation only when dwindling power supplies have driven up prices.

“Some of the blame belongs right here in this building,” State Rep. Charlie Geren, R-Fort Worth, said Thursday. “There’s blame out there for everybody.”

A Texas Tribune and ProPublica investigation found that over the last decade, lawmakers and regulators, including the Public Utility Commission and the industry-friendly Texas Railroad Commission, have repeatedly ignored, dismissed or watered down efforts to address weaknesses in the state’s sprawling electric grid. The PUC oversees ERCOT and the railroad commission regulates the oil and gas industry.

“If the Legislature fails to mandate weatherization of pipelines or power plants, there are limits to how far the regulatory agencies can go to step beyond where the Legislature has given them direction,” Alison Silverstein, an Austin-based energy consultant who has advised state and federal agencies, said Wednesday on a virtual conference with other energy experts.

The Senate Committee on Business & Commerce meeting and a joint hearing of the House’s State Affairs and Energy Resources committees lasted more than 12 hours. The committees were expected to continue the hearings Friday.

Public Utility Commission's oversight criticized 

Gov. Greg Abbott was mostly silent publicly ahead of the winter storm, and his office did not warn Texans that many of them would be without electricity and water for days during subfreezing temperatures. After widespread outages, he placed the blame firmly on ERCOT and made reforming the operator an emergency item for the Legislature.

State Rep. Rafael Anchía, D-Dallas, accused Abbott of ignoring the role that the PUC played in the crisis. Officials of the commission that regulates ERCOT are appointed by the governor.

“There's this very carefully curated discussion of blame by the governor that always speaks to ERCOT ... and never mentioned the Public Utility Commission,” Anchía said. “The PUC bears responsibility here as well.”

The head of the PUC, DeAnn T. Walker, appeared before lawmakers on Thursday after Magness testified for roughly five hours. She deflected much of the responsibility for the power outages to ERCOT, downplaying the PUC's authority over the operator.

Later, in the House, Anchía quizzed Walker surrounding the PUC’s authority over ERCOT, concluding that the commission did have decision-making ability over the operator.

“It seems to me, comprehensive," Anchía said.

“We told you to report to us if you thought we were unprepared because we had promised our constituents, ‘This was not going to happen again,’ and we told PUC to take care of it," he said. "And we gave you power, we gave you rule-making authority to take care of it."

Anchía said the PUC was empowered to winterize with legislation passed in 2011, after frigid temperatures caused equipment failures and blackouts. He asked if the commission ever submitted a report as was it was authorized to in the bill. Walker answered no.

State Rep. Abel Herrero, D-Robstown, the vice chair of the energy resources committee, noted that Abbott had welcomed resignations from ERCOT members. He asked Walker if the governor had asked for hers.

“He has not,” she said.

Energy companies and the Texas Railroad Commission

In the House’s joint hearing, representatives spent the first four hours grilling the CEOs of Vistra Corp and NRG, two of the largest energy providers in the state. The executives pointed to a number of problems — some internal but many external — that contributed to widespread outages and energy shortages in the state.

“Who’s at fault?” Hunter, the Corpus Christi Republican, asked the executives. “I want to hear who’s at fault. I want the public to know who screwed up.”

The executives agreed: The entire energy system in Texas saw widespread problems that ultimately led to supply failing to meet demand. Texans demanded an amount of electricity normally not seen in the winter months. The power grid was not prepared for that level of demand or equipment failure due to freezing temperatures.

“The entire energy sector failed Texans, we know we can do better,” NRG Energy CEO Mauricio Gutierrez said. “And we must do better to make sure that this never happens again.”

Vistra Corp. CEO Curt Morgan acknowledged that his company could have performed better, but said the biggest problem they faced was disruptions in the state’s natural gas supply system, which was not prepared for the winter weather. Morgan instructed his employees to buy gas at any price, but they couldn’t get it at the pressures necessary. He said that even if all equipment was winterized, it wouldn’t have prevented gas interruptions.

“We need to recognize the interdependencies and we need to come up with a protocol between gas and power,” he said. “There's nothing that I can do, if the gas companies cannot get pressurized gas to us.”

The Texas Railroad Commission is in charge of regulating natural gas. Commission Chair Christi Craddick told lawmakers that even though ERCOT is in charge of the grid, she had not communicated directly with the organization during the storm.

Winterizing power generators and plants

After the outages began, Abbott asked state lawmakers to mandate the winterization of generators and power plants, a proposal previously floated but not implemented by state leaders in the aftermath of another winter storm in 2011. And Abbott requested that lawmakers provide power companies with funding to make the necessary changes.

Morgan told lawmakers that the state’s energy systems cannot operate much below 10 degrees.

”Let's be honest, they're not built for the winter,” he said.

Last week, the state average temperature dropped as low as 11.8 degrees and was even lower across large swaths of the state, according to the National Weather Service.

But retroactively equipping power plants to withstand cold temperatures is likely to be very difficult and costly, energy experts said. Building energy infrastructure to perform in winter conditions is easier and cheaper, they said.

Craddick, chair of the commission the oversees the natural gas industry, told lawmakers that wellheads, the component at the earth’s surface of an oil or gas well, can only be winterized with electricity.

Communication failures

One way the state could have communicated the emergency better was through something similar to an amber alert, recommended state Sen. Angela Paxton, who left the state with her husband during the outages. Some of her colleagues agreed.

“ERCOT was pathetic. The PUC was non-existent,” said state Rep. Sam Harless, R-Spring, calling “across-the-board” communication from both state officials and energy providers inadequate. “We have to answer to our people, and they deserve to know what's going on. And they didn't.”

Several house representatives called for private companies to create better crisis communication plans for both customers and lawmakers.

Anchía questioned the PUC's Walker about why the public regulatory agency didn’t sound alarms sooner to warn the public that people could be stuck without power far beyond what rolling blackouts call for.

“That was a major failure,” Anchía said.

“I don’t disagree with you, sir,” Walker said.

Anchía asked Walker if she thought Texans deserved an apology from PUC.

She paused for a couple beats, and then he ended his questioning.

“The fact that you’re hesitating is astonishing," he said. "No further questions.”

Communities of color 

State Rep. Ron Reynolds, D-Missouri City, said hundreds of Texans have contacted his office since the storm, including Gary Bledsoe, the president of the Texas chapter of the NAACP. Reynolds said Bledsoe had concerns that poorer areas and neighborhoods of color were harder hit than more affluent areas and that people of color were possibly without resources longer than more affluent Texans once power was reconnected.

“Were neighborhoods that are densely populated by African Americans or people of color more likely to have sustained power outages?” he asked Kenny Mercado, executive vice president, electric utility for CenterPoint Energy. “There is the perception that there was some equitable issues, so could you give your perspective from CenterPoint’s standpoint in the Houston and Fort Bend areas?”

Mercado said he didn’t immediately have demographic information but said reconnections had nothing to do with ethnicity or race.

“I don’t have the answer that you’re asking [for] today, I need to really dig into the details and put that together,” he said. “The way that the circuits were rolling back on, it was first one out — whoever had been out the longest — was going to be the next one in. It had nothing to do with neighborhood or streets or race or color. However we can absolutely look through it and I would entertain the opportunity to make it better for the future.”

Why were skylines lit during the outages?

Harless asked CenterPoint executive Mercado why Houston’s downtown was “lit up like Las Vegas” when the city’s residents were in the dark.

“Of course you saw the pictures and the optics were horrible,” he said. “I understand downtown Houston staying up, but shouldn’t we have had some sort of communication process in place, to tell them ‘Hey we can’t cut you off but at least turn the stuff down?’”

Mercado said that message was delivered after it should have and that some downtown customers had to be forced to power down.

“Yeah, I would argue it was probably at least a day late, in my opinion. Maybe two days late,” he said. “They did do it when they were demanded to do it and we talked to the mayor and got his help.”

Loss of faith

Morgan, the Vistra CEO, said he’s lost confidence the state’s electrical grid could keep up with future demands, like greater numbers of electric vehicles on Texas roads.

“I was a big proponent of this market, and my faith has been shaken,” Morgan said.

Gutierrez of NRG agreed the state isn't prepared.

“We cannot afford to not have a system that is more resilient and reliable than the one we just saw," Gutierrez said.

Toward the end of the House committees' joint hearing, state Rep. Donna Howard, D-Austin, at times seemed to struggle to contain her frustration as testimony stretched past the 15-hour mark.

“Why are people not talking to each other? Why do we have this set up to where the PUC and ERCOT and the Railroad Commission and the Legislature and whoever else needs to be involved here, why are we not talking to each other?” she said. “I am dumbfounded by it. And I don’t want tonight to be the last thing we say about this.”

Jolie McCullough contributed to this report.

Disclosure: CenterPoint Energy, NRG Energy and Rice University have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.