ERCOT: Texas Was 4 Minutes and 37 Seconds Away From a Blackout That Could Have Lasted Months

[Red Oak]

10. Why did the first generating plants go off line? Were they pumping up the price of power?

I want to know why the first power plants went off line. Who owns them? Were they initially taken off line in order to drive up the price of power with the intent to restart them later when the price of power went from $20 a megawatthour to $9000 a megawatthour (the Texas legal cap)? Why were these very first plants taken off line instead of being ramped up to full capacity?

A possible scenario, totally legal in Texas to my knowledge, is that this was a fake power scarcity play that got out of hand. Say you own a few plants. You take one of your fully operational plants off line while demand is rising in order to rapidly drive up the free market price of power, fully planning on a restart later at a higher price to make lots of profit. The price of power goes from $20 MWhr to many times that, then up to the $9000 (arbitrary) cap that Texas has in place. With power at 450 times the normal price it is time to make some money! The problem was the cold was so severe that the plants could not be re-started. The loss of those initial plants may have started a ripple effect of even more plants tripping while demand is still going up, forcing even more generation off line until load was shed with forced blackouts called by ERCOT. At some point, with so many plants off line, there was no way to get power back on for everyone until temperatures and demand moderated over the entire network area, essentially the entire state of Texas. Those plants that continued to run during the crisis made a killing if they were selling power at $9000 a MWhr. A year's worth of revenue in less than a day. Those plants that were not running also made a killing, but in a wholly different context.