On February 14, 2011, FERC issued an order directing staff to initiate an inquiry into outages and disruptions of service in Texas and the Southwest in early February 2011 (the “Order”). 

During the first week of February 2011, a winter storm led to extremely low temperatures in Texas and knocked a significant number of power generators offline.  The loss of generation required the Electric Reliability Council of Texas (“ERCOT”) to implement the Energy Emergency Alert (“EEA”) plan to reduce load.  On February 2, ERCOT instituted rolling blackouts to protect the transmission system from record demand due to the unusually frigid weather.  At one point, the total amount of capacity in forced outages was more than 8,000 megawatts (“MW”).  Wholesale power prices went up to $3,000/MWh as compared with normal winter prices of $40-50/MWh.  In addition to forced outages and increased prices, New Mexico also experienced natural gas service interruptions.  The outages also disrupted Super Bowl week in the Dallas – Fort Worth area.

In a February 14, 2011 presentation to the Board of Directors of ERCOT, President and Chief Executive Officer H.B. “Trip” Doggett explained that, ERCOT experienced communications challenges due to events unfolding at a rapid pace.  He stated that ERCOT is now reviewing all communication policies related to grid emergencies and has already instituted changes to provide automated notice of these types of events to the State Operations Center and Public Utility Commission of Texas. 

In its Order, FERC initiated a two-part inquiry into the events that occurred in early February to: (1) identify the cause of the disruptions; and (2) identify any appropriate actions for preventing a recurrence of these disruptions.  The Commission stated that it is not initiating an enforcement investigation; however, staff will have subpoena power and authority to compel document and record production.  FERC also will work alongside the North American Electric Reliability Corporation (“NERC”), since NERC is examining the effects of the problems in Texas and the Southwest on the bulk power system.  The Commission also stated it will coordinate with state-led inquiries in Texas. 

On February 15, 2011, the Senate Committee on Natural Resources in Texas (the “Committee”) held a hearing on what went wrong during the February 2nd rolling blackouts.  In response to a request by Senator Kirk Watson (D-Austin) for a list of power plants that failed on February 2nd, ERCOT released a partial list of the 82 power plants that went offline. 

The Committee invited testimony from the Public Utility Commission of Texas, ERCOT, the Railroad Commission of Texas, and several utility companies.  A copy of the Commission’s Order is available at www.ferc.gov and here.