Get Your Cycle Down, Cycle Up going, Texas

Sierra Club and Public Citizen Call on Texas Legislature, Public Utility Commission, and ERCOT to Investigate Cause of Forced Outages

Outages show why State Must Renew Efforts for a Comprehensive Energy Plan for Texas

(Austin)  As Texans experience forced, intermittent electricity outages, Sierra Club and Public Citizen call on Governor Perry and the Commissioners at the Public Utility Commission, (PUC) and the Electric Reliability Council of Texas, (ERCOT) to investigate the cause of the outages and the response by the state’s regulated and unregulated electrical utilities.

“The Texas State Legislature, the PUC, and ERCOT must conduct a thorough investigation at this time into public allegations that the power outages appear to have been at least partially caused by 1) unweatherized pipes at two new coal plants – Oak Grove and Sandow, and mostly, 2) by the lack of a better organized and comprehensive demand response system to reduce peak demand during these types of extreme weather events,” said Cyrus Reed with Sierra Club.

A reserve margin is set to ensure the reliable operation of the bulk power grid in case of major outages or unusual temperature extremes.

“Texas’s electricity grid has plenty of power. In fact, ERCOT recently increased Texas’s reserve margin from 12.5 percent to 13.75 percent with assurances that the grid would perform safely and adequately for years to come,” said Reed.  “The problem is not about availability of power.  The problem is our current over-reliance on large, centralized fossil fuels with all of their pollution, associated risks, and increasing costs.  Consumers and smaller retailers need more control over energy price spikes through such tools as accessible energy efficiency programs, demand management tools, and distributed generation like on-site solar power.”

INDUSTRY MADE MILLIONS ON OUTAGES During the power outages this week, electricity prices peaked at the cap of $3,000 per megawatt hour. Real-time Texas electricity prices are available for viewing online at ERCOT’s website –

Tom ‘Smitty’ Smith with Public Citizens reviews the recent history of price spikes during power outages, “Wednesday’s blackouts are reminiscent of the market manipulation by Luminant on a cold and icy night in 2003.  This is also similar to the blackout that occurred just before TXU announced their plan for 11 new coal plants in April 2006.  This Wednesday morning, electricity prices shot up 66 times from 3:00 through 11:00 AM and the electricity companies made hundreds of millions overnight.  There should be an investigation to see if Luminant pulled off a fast one and shut down 2,900 megawatts  of coal because the ‘pipes froze’ — and  then profited as the prices skyrocketed.”

MORE DEMAND RESPONSE NEEDED FOR ENERGY SECURITY Sierra Club and Public Citizen applaud progress in demand response and call for more.  Much of ERCOT’s grid already includes mechanisms to decrease energy use during peak hours to help avoid energy constraints and control energy use during times of extreme heat or cold weather. However, in Texas, these programs are generally only available to large industrial customers, whereas many other electrical grids in the country take advantage of programs to help smaller businesses and residential customers cycle down their use during certain times — and even allow them to get paid for it.

Cyrus Reed with Sierra Club explains, “Increasing demand response capacity in the ERCOT grid will help stabilize the grid and help avoid future power outages.  Right now, some utilities like CPS Energy and Austin Energy have programs for homeowners to help reduce power use and save money, but with some changes at ERCOT and the PUC — or through legislative action — we could allow retail electric providers, utilities and third-parties to work with smaller energy users to bid into the market with demand response programs and get paid for reducing demand in the same way that electrical generators get paid by the market for selling generation.”

RENEWABLE POWER KEEPS THE LIGHTS ON Sierra Club and Public Citizen emphasize transitioning Texas’s electric sector away from pollution heavy coal plants to cleaner, more reliable alternatives — energy efficiency, conservation, and renewable energy such as wind, solar, and geothermal power.  During the current extreme winter weather, wind power performed reliably according to a statement issued by the American Wind Energy Association:

Cold and icy conditions caused unexpected equipment failures at power plants, taking up to 50 fossil-fired power plants totaling 7,000 megawatts of capacity offline.  Wind energy played a major role in keeping the blackouts from becoming more severe. Between 5:00 and 7:00 AM,  this morning (Wednesday the peak of the electricity shortage) wind was providing between 3,500 and 4,000 MW, roughly the amount it had been forecast and scheduled to provide. That is about 7% of the state’s total electricity demand at that time, or enough for about 3 million average homes.

Texas is currently number one in the nation for wind power production and, with 10,000 megawatts of wind energy, easily surpassed modest initial goals set by the Texas Legislature in 2001 in the state’s first Renewables Portfolio Standard (RPS).  The PUC is currently considering a rulemaking that would finally implement a provision of the RPS that would required that 500 MWs be generated by renewable resources other than wind such as solar and geothermal power.

Cyrus Reed continued, “Wind power performed strongly and reliably during these recent outages.  Texas’s initial RPS set goals for the state a decade ago in 2001 and drove over 10,000 megawatts of investment in West Texas, why wouldn’t this state legislature look to drive that aspect of Texas’s economy again by pursuing a stronger RPS to drive more investments now in solar and geothermal power?  This will also have the great benefit of addressing serious air pollution problems by reducing the burning of coal for electricity. ”

COMPREHENSIVE TEXAS ENERGY PLAN NEEDED Sierra Club and Public Citizen call on the Texas State Legislature to avail of its opportunity in the current 82nd Texas State Legislature to continue the efforts to develop a comprehensive Texas Energy Plan that will increase energy security and create a stable grid in times of extreme weather.

“We appreciate ERCOT’s response to minimize these forced outages as much as possible, but this event demonstrates why Texas needs a comprehensive energy plan that includes efficiency,  renewables, and demand response with accountability measures,” said Cyrus Reed of the Sierra Club.

Reed urged — “We recommend that Texas’s comprehensive Energy Plan do the following:

  • Expand energy efficiency goals to lower overall electricity use;
  • Further open up the market for demand response in order to lower energy demand during peak times of use during extreme weather;
  • Expand our renewable portfolio standard to include solar and geothermal power either through regulatory action at the PUC or legislative action; and
  • Most importantly, make the market work for distributed forms of generation like on-site solar and geothermal heat.

Reed concludes, “These measures will give us more tools in the future to deal with extreme weather conditions.”

Tom ‘Smitty’ Smith urges State leadership to respond, “Now is the time for some vision by the Texas Legislature to make Texas a leader in energy production again. While ERCOT should be applauded for its rapid response, the legislature should focus on providing a way forward with more emphasis on renewables and efficiency measures and less on coal generation that can’t responsibly manage a three-day cold spell.”

Posted by Donna Hoffman, Communication Coordinator, Lone Star Chapter of the Sierra Club

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