The official autopsy of the great Texas winter blackout of February 2021 quickly established a clear timeline of events: Electric utilities cut off power to customers and distributors as well as natural gas producers, which in turn triggered a negative feedback loop that sunk the state deeper and deeper into frigid darkness. It’s now becoming clear that while millions of Texans endured days of power cuts, the state’s gas producers contributed to fuel shortages, allowing pipelines and traders to profit handsomely off them. From a report: Interviews with energy executives and an analysis of public records by Bloomberg News show that natural gas producers in the Permian shale basin began to drastically reduce output days before power companies cut them off. As the flow of gas cratered, everyone scrambled to secure enough supply, sparking one of the wildest price surges in history. Power producers were forced to pay top dollar in the spot market for whatever gas they could find. Soon customers will be saddled with the bill.
And it’s a big one: The total comes to about $11.1 billion for a storm that lasted for just five days, according to estimates by BloombergNEF analysts Jade Patterson and Nakul Nair. The cost of gas for power generation alone was about $8.1 billion, or 75 times normal levels. A further $3 billion was spent by utilities providing gas for cooking, heating and fireplaces. The BNEF estimate is based on spot prices at major hubs assessed by S&P Global Platts rather than private contracts, so is likely an upper limit of the total cost. Millions of Texans are now faced with the prospect of paying higher gas prices for years as utilities seek to spread the cost over a decade or more. Texas lawmakers have set aside $10 billion to help natural gas utilities cover their natural gas costs from the storm through low-interest, state-backed bonds.
A special legislative session convened Thursday but the agenda did not include any measures to fix the power grid. This week, Governor Greg Abbott appeared to double down on his early assessment that wind and solar were prime culprits of the freeze. Even though gas failed in its role as a reliable backup fuel during the freeze, Abbott pushed regulators in a letter to strengthen incentives for fossil fuel and nuclear generators while increasing “reliability costs” for intermittent renewable power sources. What Abbott didn’t mention was the massive windfall key industry players made during the freeze. Energy Transfer posted its highest quarterly net income on record, more than three times its previous best quarter.
of this story at Slashdot.
Source:: Slashdot