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Evan Smith, CEO of The Texas Tribune, met with the Chair of the Public Utility Commission, Peter Lake, on February 17. Smith posed a series of questions for Lake regarding winter storm Uri, grid reliability, changes being made at PUC and ERCOT, weatherization, alternative energy, and climate change. A link to the interview can be found here.

 

This report is intended to give you an overview and highlight of the discussions on the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Smith – People predicted another winter storm 2 weeks ago, but it turned about to be nothing; Are you happy with the results?

  • Lake – Yes; focused on better communication and transparency with people of Texas
  • Saw benefits of preparation from new PUC rules and work at the legislature

 

Q: Tribune published a story saying the grid was not tested enough; the grid holding up is supposed to be standard

  • The grid over reformed; had the reserves to power 2,000 more homes proving its reliability

 

Q: It was only the 7th worst storm in Texas; was Texas overly concerned and what tells you the grid is resilient?

  • Success is measured by the number of homes with power/light not the strength of the storm
  • Was no major grid issue affecting Texas homes 2 weeks ago; only local fixable issues

 

Q: You operated the grid conservatively the month prior, but the Governor said everything was fixed; why act conservatively then?

  • We operate conservatively every day; in the past, companies were profiting off of pushing the grid close to its max and inflating the market
  • ERCOT operators now start generators earlier when it gets close to max; changing the dynamic so people are in power, not companies

 

Q: California operates their grid that way; thought we hated California, so why operate like California?

  • This is how Texas is operating now; not concerned with other grid reliability, just Texas

 

Q: Reported on February 4 alone, ERCOT spent $25 million on gas and power; is this accurate?

  • Do not know the exact numbers, but more reliability will cost more
  • In a market construct, pushing for companies to compete with one another for lower prices; the prices will drop over time

 

Q: Do you think the extra cost is sustainable?

  • The quantity reserved as backup is a fraction of total power per day; it is sustainable

 

Q: Governor said that you would ensure the lights stay on; are you keeping this promise?

  • Absolutely; the lights will stay on

 

Q: Demand response was criticized during legislature this year; how has it been improved by PUC?

  • Opened meetings for public comment, talked to stakeholders, and became more transparent
  • Consumer demand response has been reviewed for months by PUC; stakeholder input showed that demand response on the consumer level works well
  • It is the market’s job to compete with one another to offer better savings; this is demand response

 

Q: The public is not confident about the grid; Tribune poll showed 13% were confident and 43% had no confidence

  • Recognize this issue and working to increase communication, transparency
  • We are bettering our performance and taking time to prove our dedication

 

Q: PUC and Governor reported the grid held 15% more power this winter compared to last winter storm while ERCOT reports it is only 3% more; what is the difference?

  • ERCOT is a team of engineers; using seasonally adjusted numbers and specific formulas

 

Q: Reports show there was an excess supply of energy this February because of excess wind however, wind power has been claimed unreliable by PUC

  • Wind power helps, but it is not reliable; not available in demand
  • PUC is clear about pros and cons of each generator; wind and solar is cheap, compact, and there is no transportation

 

Q: There were instances where alternative energy was blamed for Winter Storm Uri; What is the reasoning for calling it bad?

  • Neither bad or good; a balance of pros and cons like all generators
  • Much investigation has occurred and the conclusion is that everything that could go wrong during Uri went wrong
  • Biggest issue for solar is it is hard to maintain during winter; peak of morning is dark, and sun sets early turning the energy to 0%

 

Q: Is the RRC doing a good job regulation natural gas? It seems they have not weatherized at all

  • They are in the process of rulemaking and implementing legislation right now; will not speak for them
  • RRC has been great partners helping enact PUC weatherization plan
  • Lots of good collaboration between PUC, RRC, ERCOT, and TCEQ; acting in preparation instead of reacting

 

Q: CEO of ERCOT expressed concern about the decline of natural gas when it freezes; proving to be a weather dependent resource like solar and wind

  • There is a lot of gas and a lot of storage in Texas; if there are dips in production, we know there is backup on demand
  • In the past, generators did not have firm-fuel; saw the benefit of the firm-fuel during the past few weeks

 

Q: What regulations have been put into place to stop another storm like Uri?

  • New winterization plans on gas and production
  • RRC is implementing those changes but happy with the progress

 

Q: People think PUC should regulate gas too; what do you think?

  • Our hands our full but decision is up to the legislature

 

Q: Other than a change in staff, what is largest operational difference that assures safety

  • SB 2 replaced ERCOT board with completely independent executives

 

Q: Isn’t it wrong that it was never done like that before?

  • What is important is that the new members are all independent and all Texans
  • Lots of expertise and new technologists that were not there previously

 

Q: Read a report from old PUC chair; half homes before 2001 were not sufficiently energy efficient or insulated

  • Legislature directed us to ensure reliability which includes energy efficiency
  • Energy efficiency companies always receive bonuses which shows me the bar is not high enough

 

Q: If I have a home heated with electricity instead of gas what is my motive for switching over?

  • There is nothing that will motivate consumers more than saving money

 

Q: Some have argued there is not enough worst-case scenario preparation happening

  • Over predicted the damage of last storm
  • Changed our methods to ensure we are careful enough

 

Q: Read that every GW of transmission could have lowered costs by $1 billion if we were on the national grid: should we be connected to the larger grid?

  • Lots of opinions on the topic; remember Uri caused blackouts on the national grid as well
  • An independent grid can be immediately reformed
  • Do not see Congress and federal partners being able to respond as quickly as we have

 

Q: Connecting to the national grid could mean selling electricity when other states, and we, need it; is this not an economic bonus?

  • We are focused on Texas reliability first
  • The federal report released in November with Texas grid suggestions was too late and PUC fixed a majority of those problems months prior

 

Q: Do you think conversation around climate is affecting Texas; does climate need more legislation?

  • I do not worry about the climate; I keep the lights on regardless of mother nature
  • Texas has a volatile climate; policy discussions are reserved for the legislature