"II. Executive Summary
The arctic cold front that descended on the Southwest during the first week of February 2011 was unusually severe in terms of temperature, wind, and duration of the event.
In many cities in the Southwest, temperatures remained below freezing for four days, and winds gusted in places to 30 mph or more.
The geographic area hit was also extensive, complicating efforts to obtain power and natural gas from neighboring regions.
The storm, however, was not without precedent.
There were prior severe cold weather events in the Southwest in 1983, 1989, 2003, 2006, 2008, and 2010.
The worst of these was in 1989, the prior event most comparable to 2011.
That year marked the first time ERCOT resorted to system-wide rolling blackouts to prevent more widespread customer outages.
In all of those prior years, the natural gas delivery system experienced production declines; however, curtailments to natural gas customers in the region were essentially limited to the years 1989 and 2003.
Going into the February 2011 storm, neither ERCOT nor the other electric entities that initiated rolling blackouts during the event expected to have a problem meeting customer demand.
... (but) rolling blackouts affected the largest number of customers (3.2 million), there were 3100 MW of responsive reserves available on the first day of the event, compared to a minimum requirement of 2300 MW.
But over the course of that day and the next, a total of 193 ERCOT generating units failed or were derated, representing a cumulative loss of 29,729 MW.
Combining forced outages with scheduled outages, approximately one-third of the total ERCOT fleet was unavailable at the lowest point of the event.
These extensive generator failures overwhelmed ERCOT’s reserves, which eventually dropped below the level of safe operation.
Had ERCOT not acted promptly to shed load, it would very likely have suffered widespread, uncontrolled blackouts throughout the entire ERCOT Interconnection.
... Spot prices in ERCOT hit the $3,000 per MWh cap on February 2, the worst day of the event.
... One other utility in the Southwest, PNM, experienced blackouts, but these were localized and the result of transmission outages that were mostly unrelated to the weather.
... the massive amount of generator failures that were experienced raises the question whether it would have been helpful to increase reserve levels going into the event.
This action would have brought more units online earlier, might have prevented some of the freezing problems the generators experienced, and could have exposed operational problems in time to implement corrections before the units were needed to meet customer demand.
The February event underscores the need to have sufficient black start units available, particularly in the face of an anticipated severe weather event.
In ERCOT’s case, for instance, nearly half of its black start units were either on scheduled outage at the time of the event or failed during the event itself, jeopardizing the utility’s ability to promptly restore the system had an uncontrolled, ERCOT-wide blackout occurred.
The majority of the problems experienced by the many generators that tripped, suffered derates, or failed to start during the event were attributable, either directly or indirectly, to the cold weather itself.
For the Southwest as a whole, 67 percent of the generator failures (by MWh) were due directly to weather-related causes, including frozen sensing lines, frozen equipment, frozen water lines, frozen valves, blade icing, low temperature cutoff limits, and the like.
At least another 12 percent were indirectly attributable to the weather (occasioned by natural gas curtailments to gas-fired generators and difficulties in fuel switching).
Low temperatures returned to the region on February 10.
In fact, ERCOT set a new winter peak that day.
But no load shedding proved necessary, largely because the temperatures were not quite as cold or sustained as those of the previous week, the winds were less severe, and many of the repairs and protective measures taken by the generators on February 2 remained in place.
Problems on the natural gas side largely resulted from production declines in the five basins serving the Southwest.
For the period February 1 through February 5, an estimated 14.8 Bcf of production was lost.
These declines propagated downstream through the rest of the gas delivery chain, ultimately resulting in natural gas curtailments to more than 50,000 customers in New Mexico, Arizona, and Texas.
The production losses stemmed principally from three things: freeze-offs, icy roads, and rolling electric blackouts or customer curtailments.
Freeze-offs occurred when the small amount of water produced alongside the natural gas crystallized or froze, completely blocking off the gas flow and shutting down the well.
Freeze-offs routinely occur in very cold weather, and affected at least some of these basins in all of the six recent cold weather events in the Southwest with the possible exception of 1983, for which adequate records are not available.
During the February event, icy roads prevented maintenance personnel and equipment from reaching the wells and hauling off produced water which, if left in holding tanks at the wellhead, causes the wells to shut down automatically.
The ERCOT blackouts or customer curtailments affected primarily the Permian and Fort Worth Basins and caused or contributed to 29 percent (Permian) and 27 percent (Fort Worth) of the production outages, principally as a result of shutting down electric pumping units or compressors on gathering lines.
... When LDCs suffer declines in gas pressure on their systems, they must reduce the amount of gas being consumed to prevent pressures from falling so low that their entire systems might fail.
As a result of the high gas demand and theFERC/NERC Staff Report on the 2011 Southwest Cold Weather Event falling pressures on their systems, four LDCs in New Mexico, Arizona and Texas were forced to curtail retail service or were unable to supply gas to all customers.
Generators and natural gas producers suffered severe losses of capacity despite having received accurate forecasts of the storm.
Entities in both categories report having winterization procedures in place.
However, the poor performance of many of these generating units and wells suggests that these procedures were either inadequate or were not adequately followed.
The experiences of 1989 are instructive, particularly on the electric side. In that year, as in 2011, cold weather caused many generators to trip, derate, or fail to start.
The PUCT investigated the occurrence and issued a number of recommendations aimed at improving winterization on the part of the generators.
These recommendations were not mandatory, and over the course of time implementation lapsed.
Many of the generators that experienced outages in 1989 failed again in 2011.
... While extreme cold weather events are obviously not as common in the Southwest as elsewhere, they do occur every few years.
And when they do, the cost in terms of dollars and human hardship is considerable.
The question of what to do about it is not an easy one to answer, as all preventative measures entail some cost.
... This report makes a number of recommendations that the task force believes are both reasonable economically and which would substantially reduce the risk of blackouts and natural gas curtailments during the next extreme cold weather event that hits the Southwest.
... Gas shortages were not a significant cause of the electric generator outages experienced during the February 2011 event, nor were rolling blackouts a primary cause of the production declines at the wellhead.
Both, however, contributed to the problem, and in the case of natural gas shortfalls in the Permian and Fort Worth Basins, approximately a quarter of the decline was attributed to rolling blackouts or customer curtailments affecting producers.
The report explores ... the question of whether gas production and processing facilities should be deemed “human needs” customers and thus exempted or given special consideration for purposes of electric load shedding.
However, any resolution of the many issues arising from electric and natural gas inter-dependency must be informed by an examination of more than one cold weather event in one part of the country.
For that reason, the report does not offer specific recommendations in this area, but urges regulatory and industry bodies to explore solutions to the many inter-dependency problems which are likely to remain of concern in the future."