The Electric Reliability Council of Texas (ERCOT) tried to prevent blackouts during the winter storm by paying large industrial users to cut power consumption, but the program to save electricity actually ended up further eroding natural gas supply because some of those large users they shut down were natural gas infrastructure firms, an analysis by The Wall Street Journal has found.
During the Texas Freeze in the middle of February, ERCOT activated its program to pay big industrial consumers to reduce the electricity they use in an attempt to alleviate the enormous strain on the state's grid due to record winter demand while many wind and natural gas facilities were down.
However, the Texas grid operator didn't know which companies exactly were part of the scheme to cut power consumption. It turns out, the Journal's analysis of grid records shows, that this move further reduced natural gas supply in the state.
Officials at ERCOT said that the grid operator was unaware that the program to save power actually ended up cutting off some of the much-needed natural gas supply at the time by shutting down critical natural gas infrastructure.
Back in February, ERCOT called for rotating outages across the state as extreme winter weather forced wind power generating units offline, while electricity demand set a new winter peak record. During the winter storms, natural gas production in Texas collapsed by 45 percent, primarily due to freeze-offs.
"We do know [a facility] has qualified and performed to the requirement because we test them, but we don't know what it is they do," Kenan Ögelman, ERCOT's vice president of commercial operations, told the Journal.
The grid operator in Texas also said it would need to re-evaluate whether critically important natural gas infrastructure should be allowed to qualify for the payments-for-reduced consumption program in the future.
The biggest winners of the Texas Freeze were companies that produce, distribute, and trade natural gas, according to interviews and quarterly earnings reports reviewed by Reuters.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More