Leaked recording reveals Texas will not overhaul electricity grid after deaths – Houston Chronicle

Power lines are shown near Beltway 8 the Hardy Toll Road following an overnight snowfall Monday, Feb. 15, 2021 in Houston. Temperatures plunged into the teens Monday with light snow and freezing rain. Rolling blackouts throughout the state has cut power to many.
PUC Chairman Arthur D’Andrea
City of San Antonio District 4 Council Member Adriana Rocha Garcia sets up her tablet before the convening of a panel at the Henry B. Gonzalez Convention Center, Friday, March 5, 2021. Mayor Ron Nirenberg named the seven-member panel to investigate the city’s and public utilities response to the extreme cold temperatures that affected the area last month.
A map of Texas showing the state s transmission lines is a focal point in the control room of the Electric Reliability Council of Texas, which operates most of the state’s power grid. (Ryan Holeywell/Houston Chronicle)
The Public Utility Commission on March 11, 2021, named Adrianne Brandt as director to oversee the Electric Reliability Council of Texas, the embattled nonprofit manager of the state’s power grid.
Briana Griffith, center, speaks from the microphone in front of the Electric Reliability Council of Texas (ERCOT) facility in Austin, Tx., U.S. on Sunday, Feb. 28, 2021. Protesters rallied in front of the Austin ERCOT facility to demand accountability from the electric power nonprofit for the extensive loss of power across Texas during the severe winter storm in February that left many across the state without power and water. “We’re here to demand better, and to make sure this doesn’t happen again,” Griffith said. The group’s demands included putting ERCOT under public control, convicting “criminal ERCOT executives,” ending utility shut-offs, converting Texas’ power system to full solar and wind, opening shelters for the homeless and those affected by adverse weather and offering them free transportation, and the cancelation of rents and mortgages in light of the economic toll that the twin crisis of the pandemic and now Texas’s severe winter weather have placed on renters and home owners. Griffith said that the group will be across the state promoting these demands and adding, “Unlike ERCOT and the PUC [Public Utility of Texas] we will keep the heat on.”
A electricity power station at Dallas and Live Oak Wednesday, Feb. 24, 2021, in Houston.
Gov. Greg Abbott declared legislation to overhaul the Texas electrical grid’s operation an emergency priority, but lawmakers appear interested only in tweaking around the edges and spending taxpayer money, not forcing big corporations to accept a true transformation.
If anyone needs evidence that the governor’s office, and by extension the Public Utility Commission, was putting big business over consumers, listen to the recording Texas Monthly obtained of PUC Chairman Arthur D’Andrea.
He told investment analysts that he and the governor planned to protect Wall Street’s billions of dollars of windfall profits captured during last month’s freeze. Under D’Andrea’s supervision, the state electricity grid operator artificially raised prices to $9,000 a megawatt-hour, including a 32-hour period in which they should have been allowed to fall, according to the state’s independent market monitor.
TOMLINSON’S TAKE: All will pay for the Texas Blackout, whether the ERCOT grid becomes reliable or not
Lt. Gov. Dan Patrick and consumer advocates want D’Andrea to roll back the price he and the grid operator ERCOT guaranteed generators. The market monitor has recommended the PUC reprice those 32 hours and save consumers $5 billion of the $16 billion in overcharges.
“It’s a contentious political issue. The best I can do is put the weight of the commission in favor of not repricing,” D’Andrea told a conference call on March 9 that Bank of America Securities hosted and closed to the public and the media. Someone gave Texas Monthly’s Loren Steffy, my predecessor, a recording of the call.
Abbott has publicly backed D’Andrea’s decision. But embarrassed by the leaked recording, Abbott has since demanded D’Andrea’s resignation. Since the only other two commissioners have already resigned, D’Andrea will remain chairman until Abbott chooses a successor.
D’Andrea also candidly revealed the governor’s plan to only make cosmetic changes to an electricity market that left four million homes without power for as much as 82 hours during the coldest nights in decades and killed more than 50 people.
Abbott was not going to appoint any new commissioners while the Legislature is in session because he did not want to deal with Senate confirmation. D’Andrea bragged that “I went from being on a very hot seat to having one of the safest jobs in Texas.”
D’Andrea then told the analysts, whose job is to advise investors on which stocks to purchase, to not expect any significant changes in the ERCOT market, despite its dismal failure. He said the state would ask companies to do a better job preparing for inclement weather but added lawmakers and the governor do not have the stomach to overhaul the extremely complicated competitive market.
The Legislature is also unlikely to bail out private companies that will go bankrupt because prices went so high for so long, he told the analysts. But D’Andrea said Texas lawmakers had promised him they would authorize a bond to cover the costs to nonprofit municipal and cooperative utilities.
The generators, traders and banks that captured obscene profits will get to keep their windfall, while Texas taxpayers will pay the bill off over the next 20 or 30 years. That is in addition to consumers paying higher rates for electricity because the commercial retail electricity providers that survive are required to pay the bills of the bankrupt.
Based on how Patrick humiliated D’Andrea during a Senate hearing March 11, it is safe to say the Lieutenant Governor is irate. He pushed through a bill ordering the PUC to reprice those 32 hours, and Attorney General Ken Paxton confirmed in a legal opinion that the PUC could do it constitutionally.
That opinion and D’Andrea’s departure are unlikely to change Abbott’s game plan. House Speaker Dade Phelan has sided with Abbott and nixed any attempt to reprice, over bipartisan objections.
Instead, Phelan and Abbott expect Texas taxpayers to cover the costs of weatherizing power plants to make sure this doesn’t happen again. They want to tap the state’s Rainy Day Fund because they think it is somehow appropriate to spend the taxpayers’ savings on things corporations should do independently.
TOMLINSON’S TAKE: Texas blackout raises many questions, but the answers are difficult
Remember, these are the same people who opposed spending Rainy Day money on schools or health care.
As for getting to the bottom of how the grid collapsed, we will probably never know. Dozens of journalists, including myself, have asked the Electric Reliability Council of Texas to turn over documents that could reveal what happened. But the electric companies have asked Paxton to declare all of the materials confidential, citing an exemption from disclosing proprietary information.
D’Andrea, meanwhile, has appointed an insider as director of accountability at ERCOT. Adrianne Brandt is a former adviser to the PUC chair and has spent her career at Texas utilities, creating doubts about what new insights she will bring.
Less than a month after the Texas Blackout, our leaders are already sidestepping and covering up. Once again, corporations get bailed out and consumers remain poorly served.
Tomlinson writes commentary about business, economics and politics.
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Chris Tomlinson has written commentary on business, energy and economics for the Houston Chronicle since 2014. Before joining the Chronicle, he spent 20 years with The Associated Press reporting on politics, conflicts and economics from more than 30 countries in Africa, the Middle East and Europe. He’s also the author of the New York Times bestseller Tomlinson Hill, and he produced the award-winning documentary film by the same name. Both examine the history and consequences of race, politics and economics in Texas.
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