The former head of the Texas power grid testified in court Wednesday that when he ordered power prices to stay at the maximum price cap for days on end during last year’s frigid winter storm and blackout, running up billions of dollars in bills for power companies, he was following the direction of Governor Greg Abbott.
Bill Magness, the former CEO of the Electric Reliabilty Council of Texas, said even as power plants were starting come back online former Public Utility Commission Chairman DeAnn Walker had told him that Abbott wanted them to do whatever necessary to prevent further rotating blackouts that left millions of Texans without power.
“She told me the governor had conveyed to her if we emerged from rotating outages it was imperative they not resume,” Magness testified. “We needed to do what we needed to do to make it happen.”
Abbott's office did not immediately respond to a request for comment.
Last year the governor's spokesman, Mark Miner said the governor was not “involved in any way” in the decision to keep prices at the maximum of $9,000 per megawatt hour – more than 150 times normal prices. He described a decision to send an aide to ERCOT's operations center in the middle of the crisis as based on the feeling the grid operator was spewing “disinformation."
Magness's decision to keep power prices at the maximum cap for more than 24 hours after conditions on the power grid began to improve is now at the center of a bankruptcy trial waged by the Waco-based electric co-op Brazos Electric.
Brazos contends that decision was made recklessly, adding up to a $1.9 billion power bill from ERCOT that forced them into bankruptcy.
“It did nothing at all to cause more generation to come online,” said Lino Mendiola, one of the attorneys representing Brazos. “It was an attempted remedy that didn’t solve any of the problems caused by the winter storm.”
The original order to raise power prices to the cap was made by the Public Utility Commission on Feb. 15, to try to get power plants back online and encourage large power users like factories and petrochemical plants to stay offline. ERCOT elected to keep prices at the cap until Feb. 19, a decision that the Texas Independent Market Monitor criticized in a report last year as having, “exceeded the mandate of the Commission.”
So Abbott's office lied, and the decision was made from the Governor's mansion to keep the power on, whatever the cost.
That cost of course being billions of dollars in electric bill price gouging, price gouging done by Texas itself.
Magness, who was fired last year, has long defended his and other ERCOT officials actions as necessary to keep the grid from slipping into a total blackout that could take weeks or months to recover from.
But in testimony in federal bankruptcy court in Houston Tuesday and Wednesday, he explained in detail how Walker had come to ERCOT's operations center in the middle of the crisis and relayed to him Abbott's demand that rotating blackouts come to an end.
Magness said he agreed that was still a risk, explaining even as power plants were starting to come back online on February 17, the system was far from secure. Some power plants were still coming offline because of cold or gas supply issues, and there was concern if power prices were allowed to return to normal market conditions, large power users might start coming back online and using crucial power reserves.
“We were still seeing 40,000 megawatts of outages. At the peak we had 52,000 megawatts but 40,000 is still a lot,” Magness said. “We saw the potential for load shed coming again.”
RELATED: All-night ERCOT meeting raises questions about Abbott’s role in power pricing debacle
And he described how after so many hours of power outages, there was risk that Texas's problems could cascade, explaining how water plants that had been relying on backup generation would have soon run out of fuel if rotating blackouts resumed.
“And I don’t know what else,” he said.
The judge overseeing the trial, U.S. Bankruptcy Judge David Jones, responded, “You’re looking into the unknown.”
“I don’t think anyone would say you were not trying to do the right thing,” he said.
And let's remember, nothing has been done to free the state from its power gouging scheme either.
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