MIDLOTHIAN, Texas — With 67 days until the official start of winter, the threat of another widespread electric failure in Texas remains a possibility, one CEO said, as long as natural gas producers in the state are not required to weatherize their equipment.
“I will tell you I’m still worried,” said Curt Morgan, CEO of Vistra Corp. “If we have another event like [February’s Winter Storm] Uri this winter, we are not out of the woods. There’s no doubt about it.”
The Irving-based company is the largest electric producer in Texas.
On Friday, it gave rare access inside one of its power plants to show the weatherization efforts that have quietly been underway for months.
Vistra’s power plant in Midlothian, a combined cycle [natural] gas turbine facility, can produce about 1,600 megawatts of electricity at full capacity, which is enough to power 800,000 homes. Natural gas fuels this facility.
For months, Vistra has upgraded its weatherization here and at the other 19 facilities it operates in Texas.
Though state and federal regulators have not yet announced minimum standards for weatherization, Vistra said its facilities would be able to withstand temperatures of -5 degrees.
Across the system, Vistra is reinsulating pipes, adding heaters to them and even trucked in 2,000,000 gallons of diesel that can power back-up generators for up to a week in case they have to be turned on.
“So, no one told us to go out and do this. We knew it needed to get done,” Morgan explained.
Vistra said it is spending $50 million on weatherization this year and an additional $30 million next year. The investments for reliability are small considering February’s winter storm cost the company an estimated $2 billion.
The Midlothian plant did not go down during the February freeze. It just had to scale back to 30% capacity because it couldn’t get enough natural gas.
Eight months later, that’s still the concern.
Electric plants are preparing for winter but natural gas producers in Texas are not required to do the same.
Problem is, about half of all electric generation facilities in Texas run on natural gas.
“Natural gas is fundamental to electricity. Electricity is fundamental to everyday life,” Morgan said. “I’m hoping that the [Texas] Railroad Commission [which regulates natural gas producers] will take this even more serious and actually push their constituents to weatherize sooner and register [as critical infrastructure] for this winter. Even though the process in Senate Bill 3 gives them through 2022 to do most of the work, I hope they accelerate that, and they take it serious what the legislature has told them recently that it’s unacceptable not to be prepared for this winter.”
Earlier this year, state lawmakers passed a bill that requires mapping the electric and natural gas systems in Texas to identify critical infrastructure. That has to be complete by the end of next year.
“I’m a little bit surprised that we haven’t made more progress from February to now and in particular on the natural gas side,” Morgan said.
Now, adding to the potential problems is the supply of natural gas over the coming months. This winter, natural gas prices are forecast to be the highest they’ve been since 2008. The United States is producing more natural gas, but it is also exporting more. That means there’s less to stockpile.
“I think we should all take every precaution to get ready for this winter. We’re concerned. Our elected officials are concerned. Our regulators are concerned,” said Jim Burke, Vistra President and CFO. “We can weatherize the electric side but if we don’t weatherize the gas side, we’re not going to have the output we need to serve Texas.”
It’s uncertain how many other Texas electric generators, like Vistra Corp., are getting ahead of potential winter weather but unless natural gas producers are required to do the same, Texas remains at risk.