RTOs In The News

House Bill Would Bring Texas and California‘s RTO – Energy Crisis to NC

NBC News reported the family of an 11-year-old boy who froze to death during the Texas blackouts is suing the RTO and deregulated power company responsible for providing power to their home.

Mother of 11-year-old Texas boy who died during power outage sues ERCOT, Entergy

The single mother of an 11-year-old boy who died during a prolonged blackout at their Texas home amid a freezing winter storm is suing the companies responsible for energy flow through state’s power grid for $100 million in damages. Now Maria Pineda is suing the Electric Reliability Council of Texas and Entergy, alleging that gross negligence led to the boy’s death and that Cristian died because their “energy provider made decisions based on profits.”

A February 16th report in The Houston Chronicle attributed at least 12 deaths in the Houston area to the storm, several directly attributed to the failure of Texas’ deregulated power market.

At least 12 die in weather-related incidents across Houston area

In Galveston County, Sheriff Henry Trochesset, who did not have power himself and was getting by with a coat, scarf and gas fireplace, said the county’s medical examiner would determine the causes of death of those who’d died in his county, so he did not want to speculate as to how many had died due to the weather.  Nonetheless, he said a number of people had run out of oxygen during the storm before first responders could reach them and attempt life-saving measures. It was too late in several cases, he said.  “It’s unfortunate,” the sheriff said. “We should not be in this. If it’s a nonsustainable way of creating energy, then there should be a back-up plan.” He added: “Too many millions of people are being affected by this.”

Bloomberg News reported on February 22nd that financial backers of companies in Texas’ deregulated power market are cashing in on the Texas power outages, making hundred-million-dollar windfalls.

Texas Deep Freeze Delivers Macquarie $210 Million Windfall

The Texas deep freeze that upended the U.S. energy market has delivered Macquarie Group Ltd. a windfall of as much as $210 million amid wild swings in gas and electricity prices.  The Sydney-based investment bank on Monday raised its profit forecast, citing increased demand for its gas and power supply services in the U.S. At the same time, Griddy Energy, a household supplier in Texas that’s backed by Macquarie Energy is handing out massive electricity bills to residents who used power when wholesale prices were spiking.

Texans in a power market controlled by RTOs and deregulated power companies are being slammed by thousand-dollar power bills, according to a February 20th Bloomberg News report.

Texans Slammed by Thousand-Dollar Power Bills After Storm

After enduring a wretched week of Arctic storms, hunger and cold, several Texans lucky enough to have power were handed another pain point — massive electricity bills. Houston resident David Astrein, 36, a human resources director at a manufacturing company, said he’s been charged $2,738.66 for 20 days this month versus $129.85 for the whole of January. He and his wife stopped using their dishwasher, washer and dryer, and turned on as few lights as possible at night. They kept the heat on for their 5-month old son. Astrein is one of a swath of consumers facing sky-high payments in the aftermath of the storm — many took to social media to show electricity bills ranging as high as $8,000.

The New York Times reported that Texans who were lucky enough not to lose power during the winter storm are being hit with crushing power bills by RTOs and deregulated power companies.

His Lights Stayed on During Texas’ Storm. Now He Owes $16,752

As millions of Texans shivered in dark, cold homes over the past week while a winter storm devastated the state’s power grid and froze natural gas production, those who could still summon lights with the flick of a switch felt lucky.  Now, many of them are paying a severe price for it.  “My savings is gone,” said Scott Willoughby, a 63-year-old Army veteran who lives on Social Security payments in a Dallas suburb. He said he had nearly emptied his savings account so that he would be able to pay the $16,752 electric bill charged to his credit card — 70 times what he usually pays for all of his utilities combined. “There’s nothing I can do about it, but it’s broken me.”

A February 17th report in The Texas Tribune exposed Texas’ failure to heed expert recommendations to require deregulated power companies and RTOs to prepare for winter weather, even after a previous cold blast in 2011 exposed similar weaknesses in the power grid.

Texas leaders failed to heed warnings that left the state’s power grid vulnerable to winter extremes, experts say

Texas officials knew winter storms could leave the state’s power grid vulnerable, but they left the choice to prepare for harsh weather up to the power companies — many of which opted against the costly upgrades. In 2011, Texas faced a very similar storm that froze natural gas wells and affected coal plants and wind turbines, leading to power outages across the state. A decade later, Texas power generators have still not made all the investments necessary to prevent plants from tripping offline during extreme cold, experts said.  Woodfin, of ERCOT, acknowledged that there’s no requirement to prepare power infrastructure for such extremely low temperatures.

As the New York Times noted last year, the devastating blackouts that swept across California during a heatwave and a pandemic could have been avoided, and energy officials

Poor Planning Left California Short of Electricity in a Heat Wave

Everybody had known for days that a heat wave was about to wallop California. Yet a dashboard maintained by the organization that manages the state’s electric grid showed that scores of power plants were down or producing below peak strength, a stunning failure of planning, poor record keeping and sheer bad luck. All told… about 15 percent of the electricity on California’s grid were reported as being offline when temperatures surged last Friday. The shortfall, which experts believe officials should have been able to avoid, forced managers of the grid to order rolling blackouts in the middle of a pandemic and as wildfires across the state were spreading. But even if all of the missing capacity had been available, California would probably still have struggled to deliver enough electricity to homes where families were cranking up air-conditioners. That’s because the manager of the grid and state regulators were relying on power from plants that either had permanently shut down or could not have realistically achieved the targets set for them. Almost a week after the blackouts began, neither the grid operator nor state energy regulators have offered a clear and detailed explanation of why California was so short of power even though peak demand was lower than it had been during other hot days in recent years. They have broadly attributed the energy shortage on their inability to secure more electricity from other states and sources.

The Wall Street Journal reported that a fundamental flaw in Texas’ deregulated power companies and RTOs allowed them to shut off power to frigid customers without penalty during an Artic Blast, while simultaneously charging customers prices as high as $9,000 per megawatt hour.

The Texas Freeze: Why the Power Grid Failed

A fundamental flaw in the freewheeling Texas electricity market left millions powerless and freezing in the dark this week during a historic cold snap.  The core problem: Power providers can reap rewards by supplying electricity to Texas customers, but they aren’t required to do it and face no penalties for failing to deliver during a lengthy emergency.  That led to the fiasco that left millions of people in the nation’s second-most-populous state without power for days. When demand spikes, however, so do prices, which can climb as high as $9,000 per megawatt-hour…

The Los Angeles Times last year detailed California’s energy crisis and the horrific wildfires it caused, noting the state became “increasingly reliant on energy imports.”

Blackouts Revive Debate Over Electric Deregulation

: Less than a month after the state experienced its first rolling blackouts in nearly two decades, officials again urged residents to use less electricity during the late afternoon and into the evening as extreme heat, fueled by the climate crisis, baked the West… Flames knocked out transmission lines and generators from the Sierra Nevada to the San Diego backcountry… The state has also become increasingly reliant on energy imports, which are getting scarcer as other Western states join California in looking beyond fossil fuels. And imports can dry up during heat storms that affect the entire West.