ERCOT fired its CEO and the head of Texas’ utility regulator resigned following the state’s devastating storm blackouts

texas weather
Roads were covered with snow and sleet on February 15, 2021, in Spring, Texas.

  • ERCOT fired CEO Bill Magness Wednesday, after a storm left millions of Texans without access to power.
  • DeAnn Walker, head of the Texas Public Utility Commission (PUC), had resigned on Monday.
  • Lt. Gov. Dan Patrick had called for both of their resignations in the aftermath of February’s blackouts.
  • Visit the Business section of Insider for more stories.

Texas’ power grid operator fired its CEO on Wednesday following devastating blackouts in February that left millions of people across the state without access to power and clean drinking water for days.

Bill Magness’ dismissal from the Electric Reliability Council of Texas (ERCOT) came just two days after the head of Texas’ utilities regulator resigned.

State lawmakers, including Texas Lt. Gov. Dan Patrick, had called for both leaders to resign after last week’s Texas Senate hearing into the storm and its effects.

Magness was fired by the company’s board after an emergency meeting Wednesday night, CNN reported. 

ERCOT, a non-profit that operates 90% of the state’s electric load, came under fire after lawmakers said it had failed to prepare for the heavy storm that cut off large chunks of the state’s power supply.

Five of ERCOT’s board members had already resigned following the disaster.

Magness has a 60-day termination notice, during which he’ll continue to serve as the company’s president and CEO, ERCOT told CNN. The company expected to start searching for Magness’ replacement immediately, it told the publication.

Meanwhile, DeAnn Walker, the head of the Texas Public Utility Commission (PUC), resigned on Monday, which the PUC said was “effective immediately.” The commission regulates the state’s electric, telecommunication, and water and sewer utilities, including ERCOT.

“I stand proud that I worked endless hours over the past two and a half weeks to return electric power to the grid,” Walker wrote in her resignation letter, per The Wall Street Journal. She did not explicitly say why she was resigning.

“Despite the treatment I received from some legislators, I am proud that I spoke the truth.”

A major winter storm that hit Texas on February 15 caused sources of electricity, like natural-gas plants, to go offline, while simultaneously increasing the demand for energy as people across the state turned on heaters to stay warm.

This caused a huge shortfall in energy, and the wholesale price of electricity surged 10,000%. One Army veteran said he was billed $16,000 for power.

Millions in the state also lost access to clean drinking water and were asked to boil their water, after power outages hit treatment facilities.

President Joe Biden declared it a “major disaster.”

The huge spike in bills happened because of Texas’ deregulated energy market. Customers who signed up to buy their power based on its wholesale cost, rather than as part of a fixed-price contract, are vulnerable to price fluctuations, such as those that occurred during the storm.

Just hours before Walker’s resignation, Lt. Gov. Patrick released a statement calling on both Walker and Magness to resign.

“Both the PUC Chair and ERCOT CEO said they were prepared the day before the storm hit in full force, but obviously they were not,” Patrick said.

Patrick said they hadn’t considered that the freeze could shut down power plants, or that crews would not be able to make emergency repairs, and said their calculations on how much energy would be unavailable during the storm were inaccurate.

“These two issues alone accounted for hundreds of thousands of homes being without power and threatened a statewide blackout,” he said.

“They hoped for the best instead of planning for the worst,” he added.

Texan Sen. Ted Cruz has also come under fire after he went to Mexico during the storm.

US officials, including Houston mayor Sylvester Turner, have called on the state of Texas to pay residents’ hefty utility bills. Officials from Harris County, which includes Houston, are looking into leaving Texas’ deregulated power grid.

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The head of Texas’ utility regulator has resigned following blackouts that left millions without power and water

texas weather
Roads were covered with snow and sleet on February 15, 2021, in Spring, Texas.

  • DeAnn Walker, head of the Texas Public Utility Commission (PUC), resigned on Monday.
  • A storm in February left millions of people across Texas without access to power and clean drinking water.
  • Lt. Gov. Dan Patrick had called for her resignation. The PUC regulates the state’s utilities.
  • Visit the Business section of Insider for more stories.

The head of the Texas Public Utility Commission (PUC) has resigned, after blackouts in February left millions of people across the state without access to power and clean drinking water for days.

The PUC said Monday that DeAnn Walker had resigned from the role, “effective immediately.”

The PUC regulates the state’s electric, telecommunication, and water and sewer utilities, including the Electric Reliability Council of Texas (ERCOT), a non-profit that operates 90% of the state’s electric load. 

State lawmakers, including Texas Lt. Gov. Dan Patrick, had called for her resignation after she testified during a Texas Senate hearing last week that lasted almost 24 hours.

“I stand proud that I worked endless hours over the past two and a half weeks to return electric power to the grid,” Walker wrote in her resignation letter, per The Wall Street Journal. She did not explicitly say why she was resigning.

“Despite the treatment I received from some legislators, I am proud that I spoke the truth.”

A major winter storm that hit Texas on February 15 caused sources of electricity, like natural-gas plants, to go offline, while simultaneously increasing the demand for energy as people across the state turned on heaters to stay warm.

This caused a huge shortfall in energy, and the wholesale price of electricity surged 10,000%. One Army veteran said he was billed $16,000 for power.

Millions in the state also lost access to clean drinking water and were asked to boil their water, after power outages hit treatment facilities.

President Joe Biden declared it a “major disaster.”

The huge spike in bills happened because of Texas’ deregulated energy market. Customers who signed up to buy their power based on its wholesale cost, rather than as part of a fixed-price contract, are vulnerable to price fluctuations, such as those that occurred during the storm.

Just hours before Walker’s resignation, Lt. Gov. Patrick released a statement calling on both Walker and Bill Magness, the CEO of ERCOT, to resign.

“Both the PUC Chair and ERCOT CEO said they were prepared the day before the storm hit in full force, but obviously they were not,” Patrick said.

Patrick said they hadn’t consider that the freeze could shut down power plants, or that crews would not be able to make emergency repairs, and said their calculations on how much energy would be unavailable during the storm were inaccurate.

“These two issues alone accounted for hundreds of thousands of homes being without power and threatened a statewide blackout,” he said.

“They hoped for the best instead of planning for the worst,” he added.

Five of ERCOT’s board members have resigned following the disaster. Texan Sen. Ted Cruz has also come under fire after he went to Mexico during the storm.

US officials, including Houston mayor Sylvester Turner, have called on the state of Texas to pay residents’ hefty utility bills. Officials from Harris County, which includes Houston, are looking into leaving Texas’ deregulated power grid.

Read the original article on Business Insider

Texas army veteran faces $16,000 bill due to rocketing energy prices as billionaire gas producer and Dallas Cowboys owner stands to profit from it

texas storm
Pike Electric service trucks line up after a snow storm on February 16, 2021 in Fort Worth, Texas.

  • Some Texans are facing a steep increase in energy bills in the wake of the winter storm. 
  • One man told The New York Times he’d received a $16,000 electricity bill. 
  • The president of shale drilling company was heard referring to the price hikes as “hitting the jackpot.”
  • Visit the Business section of Insider for more stories.

Texans who were able to use electricity supplies to their homes while storms cut off power across swaths of the state now face crippling bills, according to reports. 

Scott Willoughby, an Army veteran who lives on social security checks in a Dallas suburb, told The New York Times that unlike many who had no electricity during freezing storms that devastated the state, he suffered no power outage. 

But at a vast cost – with an electricity bill he received for keeping power on during the storm coming to an eye-watering $16,000.

Willoughby told the Times that the bill had cleaned out his savings. 

“There’s nothing I can do about it, but it’s broken me,” he told the publication. 

The huge bill increases have impacted Texans whose electricity bills aren’t at a fixed rate but hitched to market prices vulnerable to fluctuations in value. 

With the huge increase in electricity demand during the storm, wholesale electricity prices have been pushed up to more than $9,000 per megawatt-hour. They’re normally around $50 per megawatt-hour, reported NBC News. 

While the rocketing prices have financially devastated some, others stand to profit from the massive price surge.

Earlier this week, the president of shale drilling company Comstock Resources. Inc. was heard in a conference call crowing about the price hikes.

“This week is like hitting the jackpot with some of these incredible prices,” Roland Burns said on a conference call listened to by Bloomberg. “Frankly, we were able to sell at super-premium prices for a material amount of production.”

The billionaire owner of the Dallas Cowboys, Jerry Jones, is now under fire for being a majority shareholder in Comstock.

“Jerry Jones is doing what he has always done: trying to cash in,” wrote Sports Illustrated journalist Michael Rosenberg

“He is a billionaire for a lot of reasons,” Rosenberg continued. “Business acumen, luck, fearlessness, and the willingness to do things like jack up the price of natural gas at a time when the people of Texas need it the most.”

Jones was also on the receiving end of criticism on social media.

 

Millions of Texans were left without energy last week amid freezing weather, with the energy grid collapsing amid a huge surge in demand. 

On Saturday, Texas Governor Gregg Abbott said he’d met with 11 lawmakers to discuss ways to help Texans who the bill increases had impacted. 

“It is unacceptable for Texans who suffered through days in the freezing cold without electricity or heat to now be hit with skyrocketing energy costs,” Abbott said in a written statement after the meeting. 

He said that after the meeting lawmakers would work out the total cost of the bill increases, and ways the state could help customers affected by them. 

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