Tag Archives: Texas Power Grid

Dallas Morning News Blows The Lid Off ERCOT’s Sordid History!

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By Bill Oakey – March 26, 2021

Strap yourselves in for a wild ride, folks! If you think you’re heard everything…Nope, not even close. No wonder this guy won a top journalism award. What in the ding-dong-dang are the politicians going to do now!??

Dallas Morning News Watchdog Column – By Dave Lieber, March 26, 2021

In 20 years, ERCOT has been a misbehaving, secretive, arrogant, even criminal grid operator

Looking at the history of the state’s all-powerful electricity overseer, The Watchdog finds a pattern of failure.

ERCOT, the operator of the Texas electric grid, has been a problem child since the state’s electricity market was deregulated at the turn of the century.

When it comes to the Electric Reliability Council of Texas, incompetence and lack of accountability and oversight is nothing new.

If you know your history, you shouldn’t be surprised about what happened in last month’s cold-weather catastrophe.

The power to bring us electricity rests in the hands of a nonprofit, mostly invisible group whose leaders claimed we were a mere 4 minutes and 37 seconds from a massive blackout that could have shut the grid down for months.

Texans wonder why it would take months. It takes that long for replacement transmission towers to be built shipped, placed and powered up.

With the help of The Dallas Morning News Archives and a history book by R.A. “Jake” Dyer of the Texas Coalition for Affordable Power, let me show you year by year how bad it has been.

It might make you wonder why we don’t throw up the white flag and join the interconnected national grid.

2001: Tasked with creating a pilot program to handle the new deregulated system that began that year, ERCOT blows it by going over-budget and failing to meet goals. Customers who wish to switch electricity companies are blocked. Bills generated by ERCOT are wildly inaccurate. Its budget, built on fees paid by electricity customers, is hatched in secret.

That year, the first price spike to the maximum-allowed cap hits customers, but ERCOT says it won’t happen again. Yet it happens again and again in the next few days.

2002: About a quarter-million customers do not receive bills, sometimes for months. An expensive marketing campaign promoting the new deregulated system is delayed because ERCOT can’t handle the influx of consumers wanting to switch companies.

A peek at financial statements shows ERCOT’s average salary with benefits is $99,000. Employees receive a $10,000 travel allowance. Critics pounce on ERCOT’s sponsorship of a minor league hockey team as frivolous. After promising to cut back, ERCOT asks that its customer-paid fees get doubled.

2004: This is — aside from 2021 — ERCOT’s worst year. The Dallas Morning News reveals a massive procurement scandal at ERCOT that will lead to criminal convictions. Fake companies are created by several ERCOT managers, and millions of dollars are siphoned from ERCOT funds. Legislators blast ERCOT’s weak financial controls and complain about “perceived arrogance among top officials in the face of these problems,” Dyer writes.

2005: A grand jury indicts six ERCOT managers. They include the chief information officer, director of information technology, data warehouse manager, director of program development and physical security manager. The sixth, a former FBI agent, is responsible for corporate security. The men use the stolen money to buy boats, luxury homes and expensive cars.

“The maze of illicit business dealings going on within ERCOT over a year’s time is simply stunning,” the Texas attorney general says. “This is not about electricity. It’s about corruption at top levels of ERCOT.”

The AG at the time? Greg Abbott.

In response to the growing scandal, the Legislature gives all oversight of ERCOT to the Public Utility Commission.

2006: Running out of power on an April day, ERCOT launches, without public warning, rolling blackouts. Even the PUC, which supposedly oversees ERCOT, isn’t notified. Under fire, ERCOT’s chief executive resigns. On the criminal front, the indicted managers are convicted and some are ordered to pay fines, while others are sent to prison.

One state senator says: “There’s an ongoing, cavalier attitude over there [at ERCOT] that you are a standalone entity and not responsible to the people of the state.”

2009: Bills to rein in ERCOT are introduced at the Legislature, but they do not pass. ERCOT’s CEO resigns, the fourth such resignation since 2000.

2010: A consultant’s report finds ERCOT is hindered by “poor corporate governance, leadership and culture.” The consultant finds that ERCOT has too many employees and recommends that 166 get cut. ERCOT cuts 37. A state report finds poor financial oversight, questions ERCOT’s large debt (more than $300 million) and suggests removing industry representatives from the board.

2011: An icy cold snap hits during Super Bowl week, but ERCOT isn’t prepared, resulting in rolling blackouts. Similar cold weather problems occurred in 1983, 1989, 2003, 2006, 2008 and 2010. Meanwhile, during the summer, the state keeps setting records for hot-weather usage. A bill that gives the PUC even more oversight of ERCOT dies in the Legislature.

2015: New electricity demands break records. ERCOT lifts the regulatory cap to its current $9,000 per megawatt-hour. Originally, until 2011, the cap was $1,000 per megawatt-hour. ERCOT’s cap is the highest in the nation.

2018: ERCOT planners predict that generators will note the state has lower reserve margins of power and build new power plants to make profits and boost energy supplies. Because of this, they say, Texas will have a much stronger system by 2021. Oh, well.

2019: The $9,000 cap for wholesale electricity is hit twice, once in May and once in August. “Such high prices eventually trickle down into home rates,” Dyer writes.

Texas’ population of 29 million people is projected to grow by 2050 to 55 million. Can the current system handle the added power load? Why isn’t anyone talking seriously about joining the national grid?

The Watchdog took the “P” away from the (p)UC because the commission doesn’t care about the public. Watchdog Nation member David P. Bader of Dallas suggests, “Going forward, until some meaningful reforms are made, you should refer to ERCOT as E(r)COT since “reliability” doesn’t appear to be part of their purview.”

Done. Considering its sketchy past and dangerous present times, you have to wonder if E(r)COT can handle the future.

News researcher Alyssa Fernandez contributed to this report.

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Blog Special Feature – Songs From the ERCOT Jukebox

1. “Ain’t No Honky Tonks in Jail” – George Goss (Totally Hilarious)!
2. “Shame and Scandal” – Shawn Elliott
3. “Shame, Shame, Shame” – Cher & Tina Turner
4. “In the Jailhouse Now” – Johnny Cash
5. “Mama Tried” – Merle Haggard

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What You Haven’t Been Told About The ERCOT $16 Billion

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By Bill Oakey – March 22, 2021

In just 32 hours, after the winter storm was over, ERCOT billed enough electricity charges to fund the entire annual budgets of Texas’ four biggest cities combined. Read on for further details…

We know that the Big Boys on Wall Street are thrilled with their massive windfall in ERCOT’s utility pricing overcharges. They and our governor would like everyone else to just butt out now, and leave well enough alone. The Chairman of the Public Utility Commission was caught on a recording, promising to protect the Wall Street profits. The Texas Tribune recently published an article entitled, “Experts Fear Reversing Electricity Charges Will Make Things Worse.”

Why? Because “That might have a chilling effect on companies wanting to come in and invest money in Texas.” Those same “experts” insist that consumers would not be affected if the overcharges were paid back. So, we pay more when the price goes up, but if it came down, with a huge price correction, we would get nothing. Huh?

In Austin, over a dozen people were hospitalized with frostbite. Eleven feet were amputated, and five people had both feet amputated. They will be disabled for the rest of their lives. 

How Much Is $16 Billion…Really?

1. Take a guess at how much this year’s entire city budgets for Austin, San Antonio, Dallas and Houston add up to. Here’s the simple math:

Austin: $4.2 billion
San Antonio: $2.9 billion
Dallas: $3.8 billion
Houston: $5.1 billion
Grand Total: $16 billion (Holy cow!)

2. If you laid a bunch of $10 bills end to end in a line, that line would have to wrap around the world 6 times to total up to $16 billion! Here’s the math:

The earth’s circumference at the equator is 24,901 miles
24,901 miles converts to 1,577,727,360 inches
1,577,727,360” divided by 6.12” (length of any U.S. bill) = 257,798,588

That’s roughly a quarter of a billion single dollar bills. Those would wrap around the world 4 times to reach $1 billion. So, it would take 4 times 16, which is 64 times around, to reach $16 billion with $1.00 bills. For $10 bills, it would be one-tenth of that, which is roughly 6 times.

3. Austin Energy’s annual budget is now $1 billion. So, at the current rate, a $16 billion windfall would keep the utility running for 16 years!

Just take a deep breath and try to swallow this – In just 32 hours, after the storm was over, ERCOT billed enough electricity charges to fund the entire annual budgets of Texas’ four biggest cities combined! If that doesn’t tell you that we need serious reform of our power grid pricing system, then nothing will.

Two interesting questions – How many fully weatherized new power plants could be built with $16 billion? And how much of that money, plus the profits earned during the storm actually be used for that purpose?

We’ve heard a lot about “winners and losers.”  So, who are the winners, and what are they going to do with all that money? We deserve a full accounting of what happened to the entire $16 billion, including the $12 billion or so that was supposedly “settled.”

For the Readers: A Simple Multiple Choice Question

The assertion that Texans should shrug off ERCOT’s $16 billion in overcharges, because it wouldn’t make any difference is:

A. Tommyrot
B. Poppycock
C. Balderdash
D. Bull-Malarkey
E. All of the above

If you answered “E,” then congratulations, you passed the exam. But don’t expect any kudos from ERCOT, the Public Utility Commission or the Governor’s office. They are all out to lunch!

Musical Accompaniment for This Blog Piece

1, “Money Makes the World Go Round” – Liza Minnelli
2. “Around the World” – Connie Francis
3. “Miss Otis Regrets” – Linda Ronstadt
4. “Money, Money, Money” – Abba
5. “For Your Sweet Love” – Rick Nelson

The Great Texas Power Swindle – State Refuses to Correct $16 Billion ERCOT Billing Error

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By Bill Oakey – March 8, 2021

While you and your neighbors were freezing in the dark for several days in February, you probably wondered if you could trust the “powers that be” to straighten out the big, ugly mess. Fast forward to Friday March 5. We learned that ERCOT, the team that manages the Texas power grid, kept the maximum price allowable for electricity for 32 hours past the end of the storm. So, for a day and a half, Texas electric utilities were overcharged to the tune of $16 billion. During the full period of the maximum pricing, including the overcharge period, utilities were charged $9.00 per kilowatt hour. That is 75 times the normal winter rate, according to NPR News.

How much do Texas ratepayers stand to lose in this shameful debacle?

Here’s the simple math. This is based on very rough averages, but it will give you the basic perspective:

  1. $16 billion billing error divided by 29 million residents of Texas = $552.00 for every man, woman and child in the state.
  2. $552.00 times 1 million Austin residents = $552 million lost to Austin ratepayers
  3. $552.00 times 2 million Austin metro residents = $1.1 billion lost to the Austin Metro

Surely, the Texas Public Utility Commission would order those overcharges to be paid back. Right?

WRONG!

Like Trying To Unscramble An Egg?

On Friday March 5, Mr. Arthur D’Andrea, the new PUC Chair, who just replaced the ousted former Chair, tried to explain their decision NOT to correct the overcharges. “It’s just nearly impossible to unscramble this sort of egg,” he proclaimed. Then he did an artful Texas two-step to dance around the issue. In doing so, he left a big boatload of unanswered questions:

  1. Are there procedures in place to guard against keeping prices high beyond the conclusion of a power emergency?
  2. Is there a written policy regarding if, when and how the related overcharges should be corrected? If not, why not, and will such a policy be forthcoming?
  3. Who all is responsible for monitoring the fluctuating electricity prices?
  4. What specifically were the various breakdowns in procedures that led to the February overcharges?
  5. Are there any penalties placed upon employees for actions or inactions that can lead to these types of overcharges? If not, will there be some in the future?
  6. What is the historical record of previous overcharges similar to these?
  7. What specific steps can be taken to prevent these overcharges from happening again?
  8. Do any State laws or regulations need to be revised or new ones written to authorize and mandate that these type overcharges be corrected?
  9. Does the Governor have emergency authority or any other powers to make this happen? If not, can political pressure be applied?
  10. How long has it been since ERCOT and the PUC have been audited by the State Auditor?
  11. Are there any reports showing whether or to what extent these agencies have followed previous audit recommendations?
  12. Who will be the first State leader to demand that the overcharges be paid back, ask for revised procedures for both agencies, and request new State audits.
  13. Have you ever heard of any business or agency, public or private, that has ever even suggested not correcting a $12 BILLION billing error??!!

The biggest question – Why do we have such a screwball system? A convenience store owner could face civil penalties up to $10,000 per violation for price gouging. And yet the electric power suppliers get away with it. A bunch of fat cats are now laughing all the way to the bank! For the wonks among you, here’s the scoop on how ERCOT works. This article is from April, 2019. The warning signs were flashing, as they have been for a very long time.

Humpty Dumpty – Texas Style

By Bil Oakey

Humpty Dumpty fell from a tower
That ERCOT assigned to bring us all power
None of the bureaucrats and none of their friends
Could put Humpty back together again

So they gathered his innards and tossed ’em in a bowl

And scrambled him up, unaware of the toll

Try as they may, and try as they might

Those buffoons just couldn’t get anything right

 

They overcharged Texans by $16 billion

How’s that for relief from the freeze and the chillin’?

You can’t unscramble this sort of egg

Said the PUC Chairman – was he pulling our leg?

 

The Texans I know are smart and tough

We won’t put up with that kind of guff

Charging 75 times the normal rate

Is no way to run the Lone Star State!

 

Humpty Dumpty will not be forgotten

By now the poor fellow is probably rotten

It’s time for our leaders to stand up and be counted

There’s a big hill to climb, but it must be surmounted


Anyone who reads this should contact their State Representative’s office and their State Senator to ask for an end to the insanity surrounding our electric power grid and the lack of common-sense regulations.

Check out this amazing, but unverified YouTube video on how to  unscramble an egg.

A Blast From My Past

My days of consumer activism began in the 1980’s. As a member of Austin’s Electric Utility Commission, I fought many electric rate battles. Here is one of my letters to the editor in the Austin American-Statesman. The last line became my slogan:

Isn’t it interesting how many words in the English language have more than one meaning? Take, for example the, word “bill.”  Birds have bills. The Legislature passes bills. Entertainers are listed on bills. But the worst kind of bill is the kind you have to pay, like an Austin electric bill. Well, I have a very simple message. My name is Bill, and I would like to lower yours.

Musical accompaniment for this blog piece:

1.Humpty Dumpty Heart – Hank Thompson (original 1947 version)
2. Dirty Old Egg-Sucking Dog – Johnny Cash (live from Folsom Prison)
3. Four Strong Winds – Bobby Bare
4. The Blizzard – Jim Reeves
5. Storms Never Last – Dottsy
6. I Am The Walrus – The Beatles
7. Texas Two-Step – Vance Lane
8. Take The Money and Run – Steve Miller Band