Texas struggles to restore power to millions during Arctic blast

Millions of Texans braved freezing temperatures without heat or electricity for a second day on Tuesday as the energy-rich US state struggled to restore power generation systems knocked out of commission by an Arctic blast.

The Electric Reliability Council of Texas, the state’s grid operator, reported only limited success in restoring power as frigid weather forced natural gas producers to curtail output. Equipment froze at power stations and wind turbines remained inoperable.

More than half of the state’s total power-generation capacity — roughly 46 gigawatts — remained offline as of late Tuesday afternoon, Ercot officials said. Of that, about 30GW was from thermal generation including natural gas, coal and nuclear, and 16GW was from wind-generation capacity.

Natural gas supplies have been hit especially hard during the deep freeze. S&P Global Platts estimates that Texas’s natural gas supply has fallen at least 30 per cent since before the storm, and warned the figure could be significantly higher, as wells not designed for the cold were forced to shut.

Ercot officials said a let-up in the freezing weather was key to bringing power supply back to households. “It helps with gas supply. It helps with de-icing wind turbine blades. The sun coming out helps give us a lot more of our solar power,” said Bill Magness, Ercot chief executive.

The Southwest Power Pool, an electricity market stretching from North Dakota to Oklahoma, was also contending with an unstable power supply, though it did not see the same scale of outages as Texas.

More than 3.2m households in energy-rich Texas were left without power late on Tuesday, according to PowerOutage.US, which tracks electricity disruptions across the country. That was down from 4.16m households earlier in the day.

Amid a backlash from angry Texans, Republican governor Greg Abbott called on the state’s legislature to investigate and reform Ercot. “The Electric Reliability Council of Texas has been anything but reliable over the past 48 hours,” Abbott said.

While the Texas power grid has proven largely capable of handling demand peaks during the state’s sweltering summers, the electricity supply system has been crippled by some of the coldest weather the state has experienced in decades.

Wholesale electricity prices have hovered around Ercot’s price cap of $9,000 a megawatt-hour for days because of the supply shortages, far above typical prices of about $25/MWh. That has the potential to put immense strain on energy suppliers forced to buy at the astronomical prices.

I know people are angry and frustrated. So am I

US natural gas prices surged as much as 10 per cent on Tuesday to about $3.15 a million British thermal units, its highest level since October. Prices at one Oklahoma pricing hub, where supplies were extremely tight, soared from about $3 an MBtu to almost $1,000 an MBtu.

The freezing temperatures and sustained power outages have also disrupted the state’s oil industry, the largest in the country.

Producers in Texas’s Permian oilfield, one of the world’s most prolific, face days of disruptions as pipelines and other equipment freeze up and icy road conditions delay repairs.

Analysts point to crude production outages of more than 1m barrels a day, close to 10 per cent of total US output. US oil prices have held steady at about $60 a barrel.

Several refineries around Texas’s Gulf of Mexico coast, a vital hub for the global fuel trade, were also forced to shut down or curtail operations, disrupting more than 3m b/d of crude processing capacity. If those facilities are forced to remain closed, it could push fuel prices higher, said analysts.

The power crunch and freezing temperatures has also forced carmakers to suspend some production. Ford said it idled five of its plants because of the weather, including in Kansas City, where it was warned natural gas supply could be limited. Nissan said it had idled production at all of its US plants because of the weather.

The extended electricity outages have sparked outrage among Texans forced to wait out freezing temperatures without heat or power. They have also set off recriminations between local and state officials.

Houston’s mayor Sylvester Turner, a Democrat, wrote on Twitter: “The city does not control the Texas power grid. We do not oversee Ercot which manages and serves as the traffic cop for the electric grid. That is the governor and the State of Texas.”

“I know people are angry and frustrated,” Turner added. “So am I.”

Additional reporting by Claire Bushey in Chicago

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