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How power plant failures are contributing to rising Texas electricity prices

Part of your electricity bill goes to maintain power plants and transmission lines. The heat continues to strain both of those, costing ratepayers.

AUSTIN, Texas — The power grid manager covering the majority of Texas issued another conservation appeal on Wednesday.

“A Conservation Appeal is in effect today, September 6, from 6 - 9 p.m. CT. ERCOT is asking Texans to reduce electricity use, if safe to do so, due to continued high temperatures, high demand, low wind, and declining solar power generation,” the Electric Reliability Council of Texas’s (ERCOT) public notice showed.

The KVUE Defenders found how unplanned resource outages, coupled with transmission congestion, contribute to the problem and raise prices.

Simplified, three components make up the power grid: generation, transmission and distribution.

Generation includes but is not limited to power plants, wind farms and solar farms. Transmission lines carry power from the generators to local distributors. Distribution lines carry power to homes and businesses.

ERCOT manages the power grid for the majority of the state.

The KVUE Defenders dug through ERCOT records and found dozens of power generators experienced an unplanned outage this summer.

In mid-August, more than 11,000 megawatts at thermal plants across Texas were out, and more than 7,000 megawatts from wind turbines and solar panels were out. For context, that is enough to cover more than a fifth of our peak demand.

The Defenders went to Austin Energy to ask a power plant operator how this happens.

Annual records show Austin Energy has 23 power plants.

“There's so many factors,” said Erika Bierschbach, former Austin Energy VP of energy market operations and resource planning.

Bierschbach retired this year

“These are machines that have so many different moving parts. The heat creates a difficult situation, especially these 107- [and] 105-degree days,” Bierschbach said.

After a deadly winter storm in February 2021, ERCOT and state leaders changed the way the power grid operates.

Power plants usually take time off during cooler months for maintenance because demand is lower.  To ensure there is enough power should demand spike, those plants now work year-round to stay on standby.

“It's hard to tell, but if you're using your assets more and you're running them more, I mean, it's like anything, right? Whether it's your car or your air conditioning unit, you know you're putting more miles on it,” Bierschbach said.

Thermal plants like natural gas and coal are generally located near cities where a lot of power is consumed. The transmission has a shorter distance.

Wind and solar farms out in West Texas and along the coast help keep the power grid going. ERCOT leaders say those renewables helped Texas meet its record-breaking demand.

The Defenders found even during high-demand and even with unplanned outages, ERCOT will tell some of these farms to stop or reduce their production.

ERCOT President and CEO Pablo Vegas said it is to keep the integrity of the grid.

“The primary reason that ERCOT would ever curtail flow across the transmission line is if there's a concern of overloading it,” Vegas said.

“ERCOT maintains the transmission system so that if a N-1 [loss of a transmission element in the area] occurred that the electrons could redirect without overloading transmission elements,” said Michael Enger, Austin Energy’s director of energy market operations. 

In order to move electricity from fields in West Texas, South Texas and along the coast, power companies would need more transmission lines.

“I would say congestion is a significant concern within ERCOT in many different areas,” said Mona Tierney-Lloyd, head of U.S. state policy for Enel North America.

The Defenders asked Tierney-Lloyd how often they get told to limit electric production.

Most of Enel’s working solar and wind farms are located in West Texas.  The company submitted plans to the Public Utility Commission of Texas for more farms and battery storage.

“It's a fairly frequent occurrence just because there's a lot of generation that's trying to get through a constrained transmission system,” Tierney-Lloyd said.

Both unplanned outages and transmission congestion can impact the price for power.

“We are leveraging our transmission system to its fullest, and we'll continue to do so,” Vegas said.

Vegas told the ERCOT board of directors the state needs a balanced mix of power generation. Plus, he said ERCOT will study how conservation programs could help keep the grid supply higher than demand.

Most of the ERCOT grid is deregulated. The Austin area is regulated by Austin Energy, which has its own power generation and distribution lines. The generation produced gets sold in the open market. Austin Energy buys energy off the market for its ratepayers.

“Conserving power during periods of high prices reduces the wholesale cost we incur to buy our load but does not reduce the revenue paid to our generation, which allows generation revenue to offset more of the load cost incurred,” Enger said.

He said conservation can directly impact an Austin Energy bill line item.

“If Austin Energy is able to generate more revenue from generation than cost incurred by load, it reduces the net cost passed through to the customer through the Power Supply Adjustment [PSA] charge,” Enger said.

Austin Energy’s 2022 report shows 4,400 megawatts of installed capacity. Peak demand for the energy company has not reached that capacity.

“Unofficially it is 3,004 MWs but that is based upon telemetry and may vary +/- 10 MWs with actual settlement data with ERCOT,” Enger said.

Because of the types of power generation, not all 4,400 megawatts of installed capacity will match the actual output.

“We will not realize the full capacity of our supply portfolio at any one time given the intermittency and generation profiles of wind and solar resources throughout our portfolio," Enger said. "Conservation saves the customer money on their retail bill through fewer kWh consumed and conservation helps reduce the wholesale cost of load to Austin Energy, which reduces pressure on PSA rates for the following year."

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