State regulators accused Lubbock Power and Light (LP&L) of failing to properly winterize and accurately report its winter preparations for 2022/23.
The Texas Public Utility Commission (PUC) proposes a $400,000 fine, which does not have final approval. The two sides are negotiating, LP&L said.
“We take it very seriously,” said Matt Rose, LP&L’s chief public affairs officer, adding it was not aware of the new regulation.
The original fine was going to be $1.4 million, Rose said. But he hopes LP&L can persuade the PUC to reduce it further.
“We’ve gone ahead and budgeted the $400,000 amount. That is [in] our budget today and that money is set aside. … It won’t have a rate impact on our customers. … That money has already been allocated,” Rose said.
LP&L’s violations came less than two years after winter storm Uri killed 246 Texans in February 2021. The state’s official death toll included:
- 1 in Lubbock County
- 2 in Hockley County
- 1 in Hale County
- 1 in Terry County
How did this happen?
Texas passed new laws after the deadly winter storm to tighten regulations on utilities. Those reforms came online just about the same time LP&L started switching over from the Southwest Power Pool to ERCOT (the Electric Reliability Council of Texas).
LP&L migrated a portion of customers from Southwest Power Pool to ERCOT on Memorial Day of 2021. The rest were moved in December 2023, before Lubbock residents were given a choice of picking their power provider.
The change in regulations happened between the two.
Timeline
- May 2021: LP&L begins transition to ERCOT.
- October 2022: ERCOT adds transformer oil checks to inspection requirements.
- November 2022: LP&L files its winter declaration.
- January 2023: ERCOT inspection reveals the lack of oil checks.
- December 2023: LP&L finishes the transition to ERCOT
“In October of 2022, ERCOT, they added an additional aspect to the inspection, which is transformer oil quality,” Rose said.
“So, in November, when we went to the PUC website and filled out our attestation as it related to our equipment, we did not include information on the oil quality samples. We were not aware that there was a new regulation,” Rose said.
“Enforcement mechanisms are important. We take them very seriously, and obviously the state takes them very seriously. We always want to make sure that all the electric utilities are in compliance, and that our equipment is safe,” Rose said.
At the time of the storm, time.com reported, “More than 4.3 million homes and businesses were without power across Texas.”
Lubbock, like so many cities, was forced to have rolling blackouts to conserve power during Uri. Blackouts are not a violation, but they led to new regulations which later led to LP&L’s fine.
Since then
LP&L has been 100 percent in compliance with every inspection since this one, Rose said.
“It’s important, really important, to note that none of our equipment has suffered a winter weather emergency.”
matt rose
LP&L was in “full compliance” with winterization requirements during a June inspection, according to the proposed agreement.
“It’s important, really important, to note that none of our equipment has suffered a winter weather emergency,” Rose said.
The rolling blackouts in Lubbock during Uri were because of a lack of power supply, not local equipment failures.
“There will be outages if you have a large winter storm, specifically a large winter storm that has ice as a component of it. … There’s just no way around that because electric equipment exists outdoors,” Rose said.
“We’ve invested over $500 million in our electrical grid here in Lubbock over the last six years. … We are very much equipped to handle a heavy winter storm,” Rose said.
Next month, LP&L plans a rate reduction for the second time in two years.
Uri’s deadly impact
Of the 246 people in the state’s official death toll from Uri, 161 of them died from exposure to the cold either by hypothermia or frostbite.
Twenty-five died from exacerbation of a pre-existing illness, 22 died from automobile accidents, 19 from carbon monoxide exposure, 10 from fire (or smoke inhalation), and nine from falling. These numbers include both known and “possible” causes of death.
The Department of State Health Services report on Uri said, “The loss of electricity and resulting loss of regular heating sources during the winter storm also led many to use alternate sources of heat.”
That led in some cases to carbon monoxide poisoning or combustible materials inside homes catching fire.
Violations explained
The proposed agreement said, “On November 30, 2022, LP&L submitted its declarations of weather preparedness to ERCOT … ” required under one of the new laws.
But LP&L didn’t mention checking the oil inside the transformers of 17 transmission facilities.
Oil is used to keep the equipment from overheating and failing. If the oil collects moisture, the equipment can fail. That’s why regulators require utility companies to keep an eye on it.
“The violations are serious in nature,” the proposed agreement said.
“… Submitting false or misleading or incomplete information is a serious risk to reliability of the ERCOT system …”
Proposed settlement document
LP&L has 20 transmission facilities and is a “transmission and distribution service provider,” which means this impacts ERCOT, not just Lubbock.
LP&L plays a role in moving wind power from areas near Lubbock to the rest of ERCOT.
“LP&L’s failure to verify oil quality constitutes a significant risk to ERCOT system reliability,” the proposed settlement said.
ERCOT personnel inspected LP&L in January 2023 and gave LP&L until May 31, 2023, “to correct its deficiencies.”
LP&L asked for another extension – until September – but was denied.
When LP&L resubmitted the information, it was still not complete for nine of the 20 facilities.
“… ERCOT inspectors must have sufficient and complete information to make appropriate and accurate recommendations for … corrective actions. … Finally, submitting false or misleading or incomplete information is a serious risk to reliability of the ERCOT system since ERCOT depends upon factual, accurate information to effectively, safely and reliably operate the grid,” the proposed agreement said.
The PUC has authority to impose $1 million per day in penalties.
These penalties are meant “to prevent prolonged rotating outages” seen during Winter Storm Uri.
