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As Texas Went Dark, the State Paid Natural-Gas Companies to Go Offline

by Bioreports
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As a winter storm attacked Texas in February, the state’s grid operator made a last-ditch attempt to avert mass blackouts. The move ended up constraining natural-gas supplies needed by power plants, a Wall Street Journal examination shows.

The Electric Reliability Council of Texas activated a program that pays large industrial power users to reduce their consumption during emergencies. But the grid operator, known as Ercot, didn’t know who was being paid to participate in this program and what type of facilities were getting shut off, it has since acknowledged.

The Journal’s analysis of grid records shows that participants included dozens of critical pieces of natural-gas infrastructure. Ercot ordered them to stay off for more than four days, as gas prices surged to extraordinary levels and some power plants stopped producing electricity because they couldn’t get enough fuel to function.

The estimated value of the program for the five days of the blackout was about $2 billion—and participants including oil-and-gas companies earned a portion of that for turning themselves off at Ercot’s behest. Two companies petitioned Ercot for permission for idled facilities to come back sooner, the grid operator said. By the time they were allowed to restart, the crisis was nearly over.

Natural-gas power plants wound up spending billions of dollars procuring fuel or shutting down altogether for lack of supply, exacerbating a dire electricity shortage that left more than four million Texans in the dark, bankrupted several crucial players in the state’s power market and resulted in more than 130 deaths.

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