The extremely cold weather and high power prices during last February’s winter storm have faded from our consciousness with the passing of almost a year. The impacts of that extraordinary event continue, however.
“A huge increase in demand for electricity during last February’s cold weather, coupled with a loss of power generation, resulted in electric utilities across the state having to pay significantly higher costs for the power they delivered to their consumers,” said Doug Turk, Sam Houston Electric Cooperative CEO. “Some of the loss of power generation was due to cold weather-related failures at power plants, including facilities powered by fossil fuels as well as facilities powered by renewable resources. In other cases, pipeline issues prevented natural gas from getting to gas-fired power generators. And rolling outages required by grid officials added to the difficulties.”
The market operated by the Electric Reliability Council of Texas saw the highest prices by far. The Southwest Power Pool and Midcontinent Independent System Operator also serve portions of Texas, and both also experienced higher costs but much lower than ERCOT.
“Because Sam Houston EC is mostly in MISO, with only a fraction of our system inside ERCOT, our members did not experience the exorbitant increases that some residential consumers in ERCOT received, but power costs for Co-op members were affected,” Turk said.
So why would wholesale power pricing in ERCOT affect Sam Houston EC members, who are almost all in the MISO region?
“Sam Houston EC purchases wholesale power from East Texas Electric Cooperative, a generation and transmission cooperative,” Turk said. “ETEC also serves other distribution cooperatives in East Texas. Some of those other cooperatives in ETEC are part of the ERCOT market, and they were significantly impacted by the high ERCOT prices following the winter storm.”
Because some resources are pooled and shared to operate and maintain the G&T, some of the ERCOT costs fall onto Sam Houston EC, even though the Co-op is almost entirely within MISO, Turk explained. As a result, 75% of the total storm cost impact to Sam Houston EC is due to costs that were shifted from ERCOT to Sam Houston EC via ETEC.”
“The benefit of the G&T structure is that it combines the purchasing power of multiple distribution co-ops to keep wholesale power costs low,” Turk continued. “The G&T model has worked well for many years during normal times, but events surrounding [the winter storm] were anything but normal.”
In February 2021 the Co-op incurred wholesale power costs that were more than four times the normal amount, according to Turk.
In February 2021 the Co-op incurred wholesale power costs that were more than four times the normal amount, according to Turk.
Sam Houston EC was affected less than power companies inside ERCOT, and the Co-op was in a strong financial position prior to the winter storm. Since ETEC is also a cooperative, ETEC borrowed funds to pay its wholesale power bills following the winter storm and will repay those borrowed funds over time. This will allow Sam Houston EC to repay our share of storm costs over 5 years. The costs of the February 2021 winter storm are impacting the average Sam Houston EC residential member’s bill approximately $6.72 per month.
“We pulled out all the stops and used every available option to keep the lights on and protect our Co-op members from unbearably high power costs resulting from [the storm],” Turk said. “We are thankful that the impacts on our Co-op members were much less than in other parts of the state, and we appreciate our members’ overwhelming support.”
The Co-op has assistance programs available. Members can call 1-800-458-0381 if they need help paying their bill. The Co-op encourages anyone who is in a position to help others to join its Helping Hands program, which helps members in need pay their electric bills.
