ERCOT outages not caused by manipulation

A report from Potomac Economics finds no evidence of market manipulation or power abuse leading to the widespread power plant outages that occurred in February 2011 across the Electric Reliability Council of Texas (ERCOT).

The Public Utility Commission of Texas directed Potomac Economics as independent Market Monitor to investigate rolling blackouts that hit the state’s electric grid during extreme winter weather on Feb. 2 and 3. The regulators told the firm to consider whether market manipulation played a role in disrupting natural gas and electricity supplies. Around 7,000 MW, or 50 power generating units, went offline during the winter storms in February.

The report said that based on a review of the cause of each generating unit outage, capacity de-ration as well and financial positions of market participants, there was no evidence showing market abuse. It also found that the ERCOT real-time and day-ahead wholesale markets operated efficiently and the outcomes were consistent with the wholesale market’s “energy only” design. The report said the current competitive market design “provided beneficial incentives for generators to restore lost power plants as quickly as possible and for large consumers to voluntarily reduce their demand during the emergency.”

The Federal Energy Regulatory Commission and Texas regulators continue to look into the cause of the rolling blackouts.

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