The former head of the Texas power grid testified in court Wednesday that he was following the direction of Governor Greg Abbott when the grid manager ordered wholesale power prices to stay at the maximum price cap for days on end during last year’s winter storm and blackout, running up billions of dollars in bills for power companies.
Bill Magness, the former CEO of the Electric Reliability Council of Texas, said even as power plants were starting come back online, former Public Utility Commission Chair DeAnn Walker 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.”
Last year the governor's spokesman, Mark Miner, said Abbott was not “involved in any way” in the decision to keep wholesale electricity 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."
"As Texans would expect, Governor Abbott instructed everyone involved that they must do what was needed to keep the power on and to prevent the loss of life,” Miner said in an email Wednesday. “This is the same instruction Governor Abbott gave to the PUC and ERCOT (during a cold snap) earlier this year: Do what needs to be done to keep the power on.”
The decision to keep power prices at the maximum cap 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 co-op 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. The aim was to provide incentives to get power plants back online and encourage large power users such as factories and petrochemical plants to stay offline. Even as power plants were starting to come back online on Feb. 17, ERCOT elected to keep prices at the cap another 32 hours, a decision that the Texas Independent Market Monitor criticized in a report last year as having “exceeded the mandate of the Commission.”
“This decision resulted in $16 billion in additional costs to ERCOT's market,” wrote Carrie Bivens, director of ERCOT’s Independent Market Monitor.
Now Abbott is facing questions about his own responsibility in the handling of last year's blackout. Democratic gubernatorial candidate Beto O'Rourke has made the crisis, which contributed to the deaths of some 200 people, a focal point of his campaign to unseat Abbott in this November’s election, recently touring Texas on a “keeping the lights on” road trip.
O’Rourke released a statement Wednesday about Magness’s testimony, claiming Abbott had, "once again put the profits of his donors over the people of this state."
"Abbott screwed us, and he’ll continue to screw us until we vote him out," O’Rourke said.
Brutal hours, stress
Magness, who was fired last year, has long defended his actions and those of other ERCOT officials as necessary to keep the grid from slipping into a total blackout that could have taken weeks or months from which to recover.
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 continued blackouts were still a risk, explaining that the system was far from secure even as power plants started to come back online on February 17. Some generators were still going offline because of cold or natural gas supply issues, and ERCOT officials feared that large power users might resume operations and consume crucial power reserves if wholesale electricity prices returned to normal market conditions,
“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.”
In a diary he kept around the time of the blackout, which was submitted into evidence by ERCOT’s attorney Tuesday, Magness described the brutal hours and stress he and other ERCOT staff endured during the days- long crisis. After noting that he had arrived back at his hotel near the operations center at 1:30 a.m. on Feb. 17, he described how the right wing radio host Alex Jones had hung a sign on the door of ERCOT’s offices in Austin about a protest against “Globalist Criminals” and how in a radio interview Abbott had, “tore into ERCOT and me personally.”
‘Looking into the unknown”
At one point during his testimony Wednesday, Magness described how problems were at risk of cascading if outages resumed, explaining that water plants relying on backup generation would have soon run out of fuel.
“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.
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