Due Diligence

Only a scant few days  after sub-freezing temperatures had crippled or idled electric delivery for nearly a week across most of the Lone Star state in mid-February, warming temperatures quickly led to handwringing between state officials and energy leaders assembled at the Texas Capitol to sort out the most recent and serious shortcomings to date for the Electric Reliability Council of Texas (ERCOT) and the Public Utility Commission of Texas (PUCT).

It was not the first time the word reliability had become the antithesis of ERCOT’s performance as the state’s largest grid operator, nor the first instance when PUCT diligence in oversight of the agency has been questioned. But the event did set a new benchmark for failure that will likely leave a deep scar across the Texas electric industry for some time.

Immediately following the latest subsequent failures in responsiveness to severe weather events, ERCOT and the PUCT shared ridicule for grossly underestimating their assurances that the grid would be there when it was needed most for 90 percent of the state’s electric consumers, and for ensuring pricing signals built into the largely deregulated electric market were equitable when the grid nearly collapsed because of nearly unprecedented freezing temperatures.

Two of the more pressing legislative concerns raised during special committee hearings in the Texas House of Representatives and Senate chambers, centered on testimony from industry leaders and public agency representatives regarding how crisis alerts and statewide mandates for rotating outages had been carried out and communicated among providers and agencies to millions of electric stakeholders.

On Feb. 26, United CEO Cameron Smallwood had the opportunity to share United’s position throughout the event and to voice cooperative members’ angst before the Texas House of Representatives Committee on State Affairs and Energy Resources and Texas Senate Committee on Business and Commerce.

On behalf of the cooperative and cooperative members, he asserted in his testimony that United had not only prepared members in advance for the likelihood of severe winter weather  and a possibility for ERCOT calls for rotating outages, but the cooperative had also prepared emergency response protocols to sufficiently conduct mandated rotating outages—which it effectively did without pause throughout the crisis’ duration.

Smallwood informed the committees that United is not a generation and transmission owner. United is a distribution cooperative that delivers electricity procured by Brazos Electric Power Cooperative and there was significant concern about how much exposure Brazos and other power providers had to the high-priced wholesale power and how that would affect Texas consumers. As lawmakers heard from other electricity providers over the two-day hearings about how many of their customers suffered complete,  multi-day outages, Smallwood was able to explain that United successfully executed its mandated rotating outages in 30-45-minute intervals.

Smallwood also alluded to the fact one of the biggest concerns that was shared “very strongly with us, and obviously with the media,” were the well-documented instances where wholesale (electric) prices hit the ceiling and left market participants exposed—giving the appearance that price gouging was occurring at $9 per kWh when (United) charges less than nine cents per kWh. Smallwood informed the Senate Committee that members have expressed views that “the pricing was not fair and shouldn’t be passed on to the members.”

While legislative criticism was pointed at many Texas utilities who could not assert clear communications were provided during the event, United was singled out and commended for leveraging a multi-pronged communications plan of social media, news media, website, email and texting.

United is a “bright spot in a very troubling and difficult couple of weeks we’ve had,” said Rep. Shelby Slawson (R-District 59). “I’m one of your members. We’ve heard a lot about the importance of communication with the public. I want to openly commend you and United Co-op for the way you handled that as a member [of the cooperative],” she added.
United’s culture of communication is “something a lot of us could all learn from and is so important,” said Sen. Angela Paxton (R-District 8). “Teaching school, I had the opportunity to work with students on leadership…A lot of people think leadership is about having a title, but I always asked them to think of leadership as setting an example worth following and I think you’ve definitely set an example that’s worth following that we can all learn from,” she added.

Communications is “part of our DNA,” said Smallwood. “Our understanding is that customers from other utilities were watching our social media and information because they were lacking information [from their providers],” he said.

In this instance, United used every medium available to communicate awareness for the approaching winter front and the status of grid conditions as the event began to impact system operations.

Member and public communications included, but were not limited to,  social media, mirrored press releases posted on United’s website across all platforms, member texts, three separate member email alerts and updates on Feb. 14, Feb. 17 and March 1, as well as advance phone calls made to all of United key accounts (large, critical loads).