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(Bloomberg) -- Texas lawmakers are grilling power-company executives, the state’s grid operator and others about last week’s energy crisis that left more than four million homes and businesses without heat, light and water during a deep winter freeze.Executives from Calpine Corp., Vistra Corp. and NRG Energy Inc. were among the first to testify Thursday at simultaneous House and Senate hearings, during which lawmakers displayed an at-times murky grasp of how the state’s power market works. Republican senators used much of their allotted time to criticize renewable sources as unreliable and fragile, even as the state’s largest power providers cited issues with gas supplies, grid stability, frozen coal and delayed fuel deliveries.The historic outage caused as much as $129 billion in economic losses, and the impact to individual companies is only starting to emerge. Some electricity providers wracked up huge losses, fueling a possible credit crisis. Oil and gas producers saw their output halted. And dozens of people died. Generators, the grid operator and politicians have clashed over who is to blame, pointing fingers at power plants that didn’t prepare for winter, Texas’s highly deregulated power market and issues with the grid itself.“This is the largest trainwreck in the history of deregulated electricity,” Republican Senator Brandon Creighton said.Key Highlights:Calpine, Vistra and NRG all said natural gas shortages affected their ability to operate. Not only did freezing weather shut in some gas production, the blackouts ordered by Ercot compounded the issue as power was cut from pipeline compressors.The companies also said they had plants forced offline after the flow of electricity on the grid -- called frequency -- plunged when blackouts were first ordered. That contradicts the version of events presented by the grid operator known as Ercot.Vistra and NRG chief executive officers both said that their companies would not pass high energy prices from the event onto their customers.All times Eastern.Ercot Saw Blackout Potential Days Beforehand (3:40 p.m.): Grid operator Ercot anticipated that blackouts were possible four to five days before the grid emergency occurred, Chief Executive Officer Bill Magness told lawmakers. Modeling indicated that the state could be short on power supplies on the mornings of Feb. 15 and Feb. 16, he said. A notice to conserve energy was issued publicly on Feb. 13, according to an Ercot presentation. A blackout warning went out on Feb. 14, hours before the outages began.Calpine Says It Wasn’t Warned of Blackouts (3:15 p.m.):Calpine Chief Executive Officer Thad Hill said Texas’s grid operator did not warn the company ahead of time that a grid emergency was possible.“I felt that when I went to bed Sunday night that we were in good shape,” he said. He also said he wasn’t aware of any plan for shifting from rolling blackouts into controlled blackouts. “Nobody communicated to us directly on that.” As a result, Calpine wasn’t able to warn customers in a timely fashion, he said.Vistra, NRG Say Costs Won’t Pass to Customers (1:29 p.m.):Vistra and NRG executives said that their companies would not pass high energy prices from the event onto their customers. Spiking gas prices during the event offset the revenues made from selling electricity at the $9,000-a-megawatt-hour price cap, they said.“There was a significant amount of wealth transfer from power to gas,” Vistra Chief Executive Officer Curt Morgan said. “We’re the guy sitting in the middle, getting it from both ends.”READ ALSO: Texas Cities Fret as Power Bills Mount in Wake of BlackoutsGas-Supply Issues Fueled Outages (12:27 p.m.):Calpine, Vistra and NRG all said gas-supply shortages affected their ability to operate. Not only did freezing weather shut in some gas production, the blackouts ordered by Ercot compounded the issue as power was cut from pipeline compressors necessary to transport the fuel to power plants.“If natural gas is compromised, the power system is going to be compromised,” said NRG President Mauricio Gutierrez. While NRG had contracted gas supplies, low pressure on pipelines feeding the system affected the company’s ability to run plants at capacity. Vistra’s Morgan said that, despite having 90% of plants available to run, “we just couldn’t get the gas.”Calpine’s Hill said in written testimony that the company lost one gas-fired unit after a gas supplier lost electricity. He later said the company lost 40% of its gas supply on Tuesday, after the blackouts were ordered.Grid Operator, Generators Disagree on Grid Issues (11:12 a.m.):Vistra, Calpine and NRG said they had plants forced offline after the flow of electricity on the grid -- called frequency -- plunged during the early morning of Feb. 15, when blackouts were first ordered. Their comments contradict the version of events presented by the Electric Reliability Council of Texas, known as Ercot, which manages most of the state’s grid.“We have examined this, we haven’t seen it,” Ercot’s Magness said in testimony before the Texas senate. If plants did go offline in tandem with the dip, it would only have been around 10 units, a number dwarfed by the total that was offline due to weather and gas-supply issues, he said.Maintaining frequency at around 60 hertz is critical to keeping the grid stable. Ercot operating protocols say a deviation of 0.2 hertz “for a long period” could cause damage to generators and customer equipment. On the day of the blackouts, frequency dipped to 59.4 hertz for 4 minutes and 23 seconds, according to an Ercot presentation. It fell as low as 59.3, according to Bloomberg data.NRG’s Gutierrez said the dip “threatened the majority of the fleet” but ultimately only caused one plant to go offline. Calpine’s Hill said in written testimony that two of the company’s natural gas-fired power plants tripped offline for the same reason.Vistra was within three minutes of losing Comanche Peak nuclear plant because of low frequency, Morgan said. “We came dangerously close to losing the system,” he said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
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