A regulatory filing by Energy Futures Holdings Corp., the parent company of Luminant, a major power generator in the Texas market, provides a small peak behind the curtain of confidentiality that has limited the public’s view of what all went wrong on February 2. A small peak, but a significant story:
In an 8-K filing with the Securities and Exchange Commission, EFH reported that it lost about $30 million on February 2 because of weather-related outages at several of its power plants. The outages kept the company from delivering power it had contracted to sell, so the company was responsible for purchasing power at the real-time market price to cover for its shortfall. Real-time prices spiked to the market’s $3,000 cap during the emergency.
Add that supply-side news to last Friday’s announcement that under-prepared power retailer Abacus Resources Energy has been forced from the market. As one of the participants in yesterday’s Texas senate hearings said, there are already powerful economic incentives at work to help the market avoid a repeat of the Groundhog Day blackouts.
More news reports:
- Austin American-Statesman: Texas electricity system unprepared for cold, senators told
- Fort Worth Star-Telegram: Blackouts in Texas could have been prevented, officials say
- San Antonio Express: ERCOT defends its blackout actions
- Associated Press: Feds investigate Texas power outages
- Dow Jones Newswire: Luminant CEO: Texas Generating Plants Failed On Freezing Temps
- Dow Jones Newswire: FERC To Probe Power, Gas Outages In Texas, Other States
- Dow Jones Newswire: Texas: No Evidence Of Manipulation During Outages
And this commentary by Ken Herman in the Austin American-Statesman: “If they could give us warm, fuzzy feelings, we wouldn’t be here“:
On public display Tuesday in the Texas Senate chamber was a reminder of the main reason humans form governments. It is, scholars tell us, primarily for the pleasure of convening committee hearings at which we can watch well-heeled witnesses squirm….