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At a recent hearing of the Texas Senate’s Business & Commerce Committee, the Executive Director of the Texas Railroad Commission (the Texas agency that regulates the oil & gas industry), Wei Wang, told the committee that the Commission would allow natural gas facilities to deem themselves as non-critical and thus exempt themselves from the winterization requirements for a small fee. (See Committee testimony here beginning at 1:44).
There is a widely held consensus that, while there were many factors contributing to the February grid collapse, a principal culprit was the inability to get natural gas to generating plants. It also contributed to the spike in electric prices during the storm as generators desperately sought gas supplies to operate.
Senate Bill 3, which supposedly did “everything that needed to be done . . . to fix the power grid” according to our Governor, gave the Commission authority to designate natural gas facilities as critical and require those facilities to meet certain reliability standards. However, as Executive Director Wei pointed out to the Committee, SB3 provided that “only facilities and entities that are prepared to operate during a weather emergency may be designated as a critical customer under this section.” [SB3, §81.073(3), p.9]
Following that provision, the Commission has proposed a rule allowing natural gas facilities to apply to be designated as not being prepared to “operate during a weather emergency” and therefore be exempt from the winterization requirements. The proposed rule sets no criteria for granting such an exemption, other than the operator’s unsubstantiated “assertion” that the facility is not prepared to operate in a weather emergency. (Exception section begins on page 10, line 14.)
In other words, under the proposed rule natural gas facilities can effectively unilaterally decide to exempt themselves from being a critical customer subject to reliability standards – essentially eliminating one of the most important legislative changes made to address grid reliability.
The senators appeared to be completely flummoxed and surprised that the bill they had passed included such a gapping loophole; undoubtedly strategically placed in the bill by talented and highly compensated lobbyists. Several members asked if additional legislation was necessary to plug the loophole. The regulators demurred, notwithstanding that testimony had made it obvious their hands were tied by the exemption included in SB3.
Shortly after the hearing, State Representative Jon Rosenthal filed HB154 to plug the loophole. However, bills in a special session can only be considered if allowed by the Governor. Given the largess the energy industry has heaped into Abbott’s campaign coffers, he unsurprisingly showed no interest in plugging the loophole. Of course, he did find time to throw every piece of red meat imaginable into his three special sessions to prop up his prospects in the upcoming primary election contest.
Shortly after the grid failure, the SAM Party of Texas began a petition, calling on Abbott and the Legislature to appoint an independent commission to study the issue and make recommendations. If they had, it is unlikely that the final bill would have had such a glaring omission.
Many energy experts have concluded that the Texas grid is still highly susceptible to failure and that nothing has been done to incentivize more generation capacity which Texas will need if it is to continue to grow. Five former Public Utility Commissioners (all Republican appointees) issued this report in June with their recommendations highlighting how short the Senate 3 fell in “doing all that needed to be done.”
After the abject failure of our State government to address this critical issue, the SAM Party believes more than ever that we must have an independent commission to study what happened in the February grid failure, including a forensic accounting of the billions of dollars the storm will cost Texans. It is clear that we cannot trust politicians from both parties who have accepted millions of dollars in campaign contributions from the energy industry to watch out for our interests. Please join us by adding your name to our petition below if you have not already done so. Also, if you believe that Texans need another voice in Austin other than the two parties which are more obsessed with fighting with each other than solving the problems of everyday Texans, please consider joining our movement.
