Rolling Blackouts: a Black Eye For Texas?

Dave Fehling/StateImpact Texas

There’s fear in Austin over what could happen if the state runs short of electricity and has to use rolling blackouts to keep the statewide electrical grid from collapsing.

The fear is for the state’s image.

At a meeting of the Texas Public Utility Commission (PUC) June 13th, Chairman Donna Nelson expressed concern that pleas to the public to conserve electricity during the late afternoon when demand is greatest might also send a message that Texas was running out of power and therefore was no place you’d want to do business.

Courtesy PUC

PUC's Donna Nelson

“You know, we want to get the message out of reduced usage during peak demand…At the same time, we want to get the message out ‘Texas is open for business’,” Nelson said. “We want to get the message out, peak demand, turn your thermostat up a couple degrees, don’t do your laundry, those kinds of things. But we don’t want to say, ‘if you don’t we’ll have rolling outages’, OK? So, it’s a fine line to walk.”

What’s So Bad About a Blackout?

To reduce the risk of blackouts, the PUC wants to raise the cap on the price of wholesale electricity during those peak demand times in an effort to make the market more profitable. In turn, the commission hopes that’ll lure more investment to Texas to build more power plants.

But the PUC’s own consultants in a report release earlier this month cautioned that the state could go overboard trying to reduce the risk.

“You can plan on a very, very high level of reserves and almost never have to (have blackouts). That would be more expensive than maintaining a lower reserve margin. And there’s got to be a balance somewhere,” said Sam Newell, one of the authors of the report done by The Brattle Group.

The report questioned whether the standard preferred by Texas regulators, a one-outage-a-decade requiring a reserve margin just shy of 14 percent, was worth what it would cost to build new power plants.

By contrast, the report said a lower reserve margin of only 10 percent could cost far less and mean that the risk of blackouts would be only “24 outage hours” in a decade. In other words, not that big a deal in a state where customers are used to occasionally losing electricity because of wind storms and lightning.

How much money are we talking about? An industry group called Texas Industrial Energy Consumers told the PUC in a filing that the higher peak prices for wholesale electricity favored by the PUC would add from $4.5 billion to $14 billion to the total annual cost of electricity in Texas. That could translate into hundreds of dollars more a year per residential customer. The group warned commissioners that  the impact of raising prices “should not be trivialized or viewed as a purely academic exercise.”

How Rolling Blackouts Work

Rolling blackouts have been rare in Texas.

Dave Fehling/StateImpact Texas

CenterPoint's Kenny Mercado

“It just doesn’t happen. I wouldn’t even say it’s once every ten years. It’s once in a long, long period of time. But we’re always prepared,” said Kenny Mercado, a VP of grid operations at CenterPoint Energy which routes electricity to 2.2 million customers in the Houston area.

Once ERCOT — the overseer of the state’s electric grid — decides to order rolling blackouts, Mercado says CenterPoint tries to minimize the pain.

“We try to reduce the duration and increase the frequency,” said Mercado.

An example of that was what Mercado said happened back in February 2011. A cold snap caused a number of ill-prepared power plants to freeze up, taking a total of some 50 plants statewide off-line. Starting early in the morning, ERCOT ordered rolling outages that lasted most of the day (the previous rolling outage in Texas was a more limited one in 2006).

“It was probably three or four (outages) for me for roughly 30 minutes spread out over an eight hour time frame,” said Mercado about what it was like at his Houston home.

For the most part, residential customers bear the burden of controlled, rolling outages. CenterPoint spares vast pockets of the Houston region: airports, downtown, the Texas Medical Center, dozens of industries primarily on the city’s east side, even the area around The Galleria shopping mall. CenterPoint provided StateImpact a map showing who lost power and who was spared in the outages of February 2011.

Different Approach in Dallas

The state’s other big electricity delivery company (as opposed to the companies that generate the power) is Oncor. Unlike CenterPoint, it says virtually every customer is fair game in a rolling outage.

“No one is exempt,” says Megan Wright with Oncor’s media relations.

In the 2011 outage, that meant that even some Dallas-area hospitals lost power.

Courtesy Methodist Dallas

Methodist Dallas Hospital was part of outage in 2011

“It caught us by surprise,” said Sandra Minatra, a spokesperson with Methodist Dallas Medical Center.

Patients were never in danger because Minatra said the hospitals own emergency generators came on instantly.

“Most any hospital is going to have a backup system but you don’t want to turn to relying on that if you don’t have to,” said Minatra.

After hospitals complained, Oncor reconsidered its policy and now has added “trauma hospitals” to a priority list that includes airports, jails and other facilities where health and safety could be jeopardized by a loss of electricity.

But Oncor’s Wright says being on the list is not an absolute guarantee of exemption from being included in an outage. She says Oncor tries to limit exclusions because “others will have to be out of electricity longer to allow others to stay on.”

The PUC commissioners are scheduled to meet Thursday morning in Austin and are expected to approve new, higher caps on the wholesale price of electricity.

 

 

Comments

  • http://www.facebook.com/ted.mcgavran Ted McGavran

    Welcome to the real world folks. With a Federal Appeals Court in D.C. upholding EPA regs regarding coal you can expect to see this same scenario played out across the country very soon. Texas is just seeing it forst because they have had somethnig the rest of the country has not had – economic growth. And EPA is laying the wood on Texas for that reason because it is not in the Obama game plan for Texas to grow. They want to foist the California – Illinois model on the country that tends to resemble Greece so you guys out there are big time targets.

    • siuol11

       Ah, something so dumb it has to be said twice. America! Hooah!

    • Jovina

      Ignoring EPA standards, thanks to Rick Perry and David Dewhurst and other Republicans, North Texas has indured ozone rainbows of orange, red, and purple. People actually die here, because they can’t breathe. We finally got some enforcement to contain some of the pollution from the cement factories, but today we are back to orange with more to follow. What comes after purple? Black, as i black lungs?

  • http://www.facebook.com/ted.mcgavran Ted McGavran

    Welcome to the real world folks. With a Federal Appeals Court in D.C. upholding EPA regs regarding coal fired generation you can expect to see this same scenario played out across the country very soon. Texas is just seeing it first because they have had somethnig the rest of the country has not seen for quite some time – economic growth. EPA is laying the wood to Texas for that sin because the Obama folks want to foist the California – Illinois model on the rest of the country which tends to look a lot like Greece which if you beleive the Obama team if we just tax at higher rates that will never occur. Not true and Texas shows us as much so you folks out there are targets. Its pay higher prices (in most cases a lot higher) or no service. That is just the facts. Plan accordingly.

  • James

    Or perhaps it is because Texas decided to do its own thing and not be connected to any generation systems outside of the state.  And maybe if the coal generation companies and Texas didn’t count on their campaign contributions to fix the problem and actually implemented the clean coal technologies Texas wouldn’t be where it is now.

    • nancy el

      why do we need coal?  we have gas.  why don’t we have power plants that use methane?  or dried cow & chicken waste?  G-d knows we have plenty of that. keep raising prices & we will find ways to get off the grid.

      • Jovina

        We export our gas to the highest bidder, which is other countries. The talk of being energy-independent ignores the exportation of oil to other countries, who are willing to compete with the US for the price of our own oil and gas. It is shipped out of Texas. The Canadian pipeline will do the same. It is not meant for US consumption.

  • WChuck

    So Ted, you’re saying that the courts SHOULDN’T uphold EPA regs that protect the air and water quality in this country??  It’s time for Texas to join most other states in looking for cleaner, more efficient ways to produce electricity.  Economic growth in Texas could disappear in a heart-beat when you can no longer go outside and take a deep breath… and in the metropolitan areas, it’s getting pretty close to that already… and the summer temps are so hot that no one wants to live here, much less work or operate a business here.  The evidence for global warming and climate change is growing by the hour.  There is very little evidence or consensus that global warming is not at least partially, but significantly impacted by human activity.  It doesn’t take a genius to understand that the carbon pollution that we pump into the atmosphere by the thousands of tons every day, wouldn’t have a negative impact on the very fragile eco-system that is our Earth.  The US has pushed the limits of pollution that the earth and our atmosphere can absorb for a hundred years.  Now that the rest of the world has joined us, we, I believe, are on the verge of a catastrophic change of climate that will soon have gone beyond our ability to stop or do anything about.  I keep hearing what a Christian state this is.  It’s a poor excuse for Christianity that intentionally ignores our Christian responsibility for stewardship of God’s green Earth.

    • Upchuck

      Dearest Chucky, Texas is the number one wind energy producer in the country. Believe me, it’s hot here. But people want to be in Texas because it’s prospering. :) Evidence for global warming growing by the hour? Where? I think Al Gore’s bank account is growing by the hour, thanks to folks like you.

      • http://pulse.yahoo.com/_6YVYKKIHJJ6OBBJ52IYQDDQCJM JoanS

        Open your eyes, Up. Be brave. Be willing to know the truth. Only then can you see the truth and be able to do something about it.

  • http://pulse.yahoo.com/_6YVYKKIHJJ6OBBJ52IYQDDQCJM JoanS

    You can’t handle the real world.  The real world is Texas without a/c.  California is dealing with the same rolling blackouts, but there it is blamed on the Democratic Governor.  I don’t think the CA governor has more political clout than the TX govenor, and they are from different political parties, so why are their citizens are living with the same power restrictions?  Could it be that the real world does not have as much cheap energy as it used to?  Could it be that the world is getting hotter because of overuse of fossil fuels and you are living in a desert and the constant demand for more power is taxing the system to the point of breaking it?  Well those are some real world questions for Ted, if he’s up to them.

About StateImpact

StateImpact seeks to inform and engage local communities with broadcast and online news focused on how state government decisions affect your lives.
Learn More »

Economy
Education