Texans pay millions for units that can restart power grid, but some went out during freeze

It was probably the shakiest 4 minutes and 23 seconds the Texas power grid ever felt.

During the frigid early morning hours of Feb. 15, as snow fell across Texas, cascading failures at power plants across the state led to power being cut to millions of Texans.

Texas' grid operator, the Electric Reliability Council of Texas, later revealed that the February freeze, which killed hundreds of Texans, could have been a lot worse. The grid was just minutes from a complete collapse.

Had the grid totally shut down, ERCOT would have begun a process known as a "black start," which calls for activating several strategically placed and independently powered electricity production units at 13 power plants across Texas.

Those units are the first step in restoring full operations to Texas' power grid—and as such, they are supposed to be the grid's most reliable. Texans pay these power companies and electric utilities millions of dollars each year to ensure that those units are the electrical source of last resort in the face of a statewide blackout.

Each unit is supposed to be able to fire up independently of any outside power source. In a black start event, they would be used to jump-start neighboring power plants to begin repowering the grid in a process that could take several hours or several weeks, depending on the circumstances.

But during the February freeze, many of these plants proved themselves to be no more reliable than any of the hundreds of power plants that shut down. At nearly half of the power plants contracted to be the most reliable—six out of 13—black start units failed during the February freeze.

In Fort Bend County, a relatively small natural gas unit at NRG's sprawling WA Parish Generating Station shut down during the tensest moments that freezing February morning when the grid nearly failed. Texans are on the hook to pay NRG more than $1.5 million over two years for this unit to be operational to jump-start the grid. But had the grid collapsed at that moment, this unit would not have been available to help restart operations.

At nearly the same time in Bexar County, multiple units at CPS Energy's Braunig Power Station were out, including a 48-megawatt natural gas unit Texans pay $1 million to jump-start the grid after a blackout.

Across Texas, a number of black start units went down during the crisis. An American-Statesman investigation based on contracts obtained from ERCOT through the Texas Public Information Act, an analysis of power outage records and on accounts from power providers found that nearly half of the power plants contracted to be the most reliable had black start units fail during the February freeze.

ERCOT and power providers counter that many of their fail-safe units remained operational during the freeze.

At Austin Energy's Decker Creek Power Station, for instance, a black start unit Texans are set to pay $788,000 for participating in the program had a forced outage for about 13 hours on Feb. 18. But other units at the site remained active and ready to step in if called upon for a black start, according to the utility.

"We were only four or five minutes away from needing them to be able to perform, and the fact that they weren't able to perform had we needed them strikes me literally as cold comfort," said Alison Silverstein, an independent consultant and former adviser for the Public Utility Commission and the Federal Energy Regulatory Commission.

To maintain such a program, ERCOT holds these power plants to the highest standards. They are regularly tested. They meet more stringent standards for redundancy. Some have backup fuel supplies on-site. For staying on-call 24 hours a day in case of a catastrophe, private companies such as NRG as well as such municipal utilities as Austin Energy and Denton Municipal Electric are paid hundreds of thousands of dollars a year.

In total, Texas energy consumers are set to pay $13.7 million over two years to black start participants. Power providers and utilities bid for the ERCOT contracts, which place emphasis on reliability, on-site backup fuel capabilities and their strategic location. The money ERCOT pays the winning bidders comes indirectly from Texans' electric bills, passed through by power providers and redistributed to black start contract holders.  

The contracts provide penalties and grounds for invalidation if black start power plants fail to pass tests and simulations. However, broad exceptions are given for events that are considered acts of God.

In the case of the six black start contract holders that had power plants shut down during the crisis — Austin Energy, CPS Energy, Denton Municipal Electric, NRG Texas Power and the South Texas Electric Cooperative — none will have their compensation cut for those outages. Because the grid never fully shut down and ERCOT never placed an official call for a black start and help reactivating the grid, none violated their contracts.

ERCOT refused to provide any officials for an on-the-record interview for this story.

The fact that outages occurred at these black start sites was "hugely problematic," said Austin-based energy consultant Doug Lewin.

"There have to be reliability standards that are extreme for black start operators," Lewin said. "I don't think it is hyperbolic to say civilization essentially depends on it. If you don't have power and you can't get it back for weeks, things really start to get into some pretty dark and really almost apocalyptic-type stuff."

The problems found at Texas' black start facilities

NRG holds two black start contracts, one for the small natural gas unit at WA Parish Generating Station and another for a similar unit at its T.H. Wharton power plant in northern Houston.

At Wharton, a black start unit was down for nearly two and a half days. That outage began about 90 minutes after ERCOT shut off power to millions after the amount of power available became dangerously low in the face of numerous plant failures, threatening to damage equipment and cause permanent harm to the grid.

In a written statement, NRG's executive vice president of operations, Chris Moser, said those units are in full compliance and that NRG rigorously tests equipment and trains its plant operators.

“We always strive to do better," Moser said. "As part of our continuous improvement program, after every winter and summer season, we examine what worked well and where there’s opportunity to improve. The months following (the winter storms) were no exception. We undertook a robust weatherization analysis utilizing both internal and third-party experts. As a result, prior to this coming winter, we will have corrected the issues that became evident last February."

Daniel Cohan, a Rice University professor of civil and environmental engineering who has studied the Parish power plants extensively, said that the failures at the Parish power plant point toward an issue of NRG cutting corners at the facility, which has been criticized by environmentalist groups for its amounts of air pollution.

"It doesn't matter if you're available 99% of the time if you're not available at the most critical hours," Cohan told the Statesman.

NRG would not provide any comment on Cohan's criticisms.

Austin Energy is contracted to have two natural gas units at its Decker Creek Power Station ready for a black start event. During the February winter storms, the primary unit was online the entire time. A backup unit, however, experienced "brief outages" during the event, according to a statement from Austin Energy.

The utility has four gas turbines at the power plant that officials said could be used interchangeably if called to restart the grid during a total blackout.

"In other words, if the primary unit is out, we can supply the required energy to the grid from a backup unit," utility spokesperson Jennifer Herber said in an email.

The city-run electric utility is set to be paid about $788,000 over two years for participating in the program.

CPS Energy, San Antonio's municipal utility, has a $1 million contract for black start units at its Braunig Power Station. Various units were up and down at the power facility throughout the winter storms

Its 48-megawatt natural gas units contracted for the black start program each experienced outages, including one that was down for hours while ERCOT was cutting off power to keep the grid from shutting down completely.

CPS Energy did not respond to several requests for comment.

The city of Denton is set to get $993,000 for participation in ERCOT's black start program. The city's power utility contracted to have its chief power plant, the Denton Energy Center, available for a black start.

During the freeze, the entire plant was down for 48 hours, according to the utility. Outages first resulted from the utility having its natural gas supply cut off and later after equipment froze, according to a city of Denton spokesman.

Lastly, the South Texas Electric Cooperative confirmed it had outages at the Sam Rayburn Power Plant, including at a black start unit. Texas ratepayers will pay $650,000 for that facility being in the black start program.

John Packard, the nonprofit co-op's manager of power supply, said the facility never experienced a complete shutdown.

The Legislature passed several laws during 2021's regular session to address shortcomings at Texas' power plants. Those included weatherization requirements for all plants, which will be required by December to meet standards federal authorities suggested in the aftermath of a 2011 winter event.

The Public Utility Commission of Texas, the oversight agency for ERCOT and power providers in Texas, is in the process of creating weatherization standards for all power plants, including black start units. Those likely won't be in place until at least 2022.

"Philosophically, our long-term approach is expected to be an outcome- or standards-based approach, meaning we are not prescribing specific fixes, but instead defining the weather outcomes that generators need to be prepared for, and leaving it to each entity to identify the most efficient and effective way to achieve that level of weatherization," PUC spokesman Andrew Barlow said.

ERCOT's black start contracts are for two years. The current contracts run through the end of 2021.

ERCOT has already selected power plants for the next two-year contract cycle. The list of providers has not changed much, according to ERCOT officials. The grid operator is keeping the identities of the winning bidders from the public because the contracts have not been signed.

However, those winning bidders were selected in the weeks prior to February's winter storms, according to ERCOT, which means they were selected before ERCOT learned anything about those plants' performance during the freeze.

Silverstein, the former federal oversight official, said ERCOT should "throw out" any agreements made for the next black start contracts that begin in 2022.

She said ERCOT should create new performance requirements and include having an alternate fuel source, such as fuel oil, on-site. Penalties should result from outages, Silverstein said, and those plants should have stringent weatherization standards.

The contracts should also have longer lengths and provide more money for participation, she said. That would give power providers more incentive to spend money on those units and make longer-term commitments.

"This is a serious responsibility," Silverstein said. "They are the grid's last resort. And we have to make sure they're ready when we need them. And we have to make sure they're ready in case we need them. Even if we don't actually call on them, they have to be ready to perform calls every minute of the day. Every minute."

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