Bill Magness, the former CEO of the Electric Reliability Council of Texas (ERCOT), testified in court on Wednesday that he was following commands from Governor Greg Abbott when he kept power prices at a maximum during the February 2021 winter storm.
The maximum prices of $9,000 per megawatt, more than 150 times the regular prices, resulted in power companies racking up billions of dollars in bills from ERCOT.
Magness was testifying as part of the Brazos Electric Cooperative bankruptcy case. The company filed for bankruptcy after incurring a bill from ERCOT of $1.9 billion during the winter storm.
Magness said that when power plants were back online, former Public Utility Commission of Texas (PUC) Chairman DeAnn Walker came to him and said Governor Abbott wanted ERCOT to do whatever was necessary to prevent more rolling blackouts, which had left millions of Texans without power during the storm.
“She told me the governor had conveyed to her that if we emerged from rotating outages, it was imperative they not resume,” Bill Magness testified. “We needed to do what we needed to do to make it happen.”
Magness and Walker both resigned in the aftermath of the storm.
The PUC made the original order to raise prices to the maximum cap on February 15. The intended purpose was to get power plants back online and dissuade large energy users, like factories and petrochemical plants, from coming back online. ERCOT kept prices at the cap until February 19.
The Texas Independent Market Monitor released a report in March 2021 that said the decision to keep prices at the maximum for that long “exceeded the mandate of the Commission.”
“This decision resulted in $16 billion in additional costs to ERCOT’s market,” wrote Carrie Bivens, director of the Independent Market Monitor.
Bill Magness said Abbott’s demand to prevent rolling blackouts at all costs was a risk because power plants had come back online even though the grid was still not secure. Magness said he was concerned that if ERCOT returned to regular prices that large users would come back online and use up crucial energy reserves, thus risking more blackouts.
The Houston Chronicle first reported on the testimony. Last year, Abbott’s spokesman, Mark Miner, told the Chronicle that the governor was not “involved in any way” in the decision ERCOT made to keep prices at the maximum price point.
Miner spoke through email with the Chronicle on Wednesday and said the former ERCOT CEO was spewing “disinformation” with his testimony.
“As Texans would expect, Governor Abbott instructed everyone involved that they must do what was needed to keep the power on and to prevent the loss of life. This is the same instruction Governor Abbott gave to the PUC and ERCOT earlier this year: do what needs to be done to keep the power on,” Miner said in the email.
Abbott is currently running for reelection. Polls have shown that he is likely to win the March 1 Republican primary and face Democrat Beto O’Rourke in November’s general election.
O’Rourke immediately seized the opportunity to use Magness’ testimony against Abbott.
“Abbott screwed us, and he’ll continue to screw us until we vote him out,” O’Rourke said in a news release from his campaign. “He once again put the profits of his donors over the people of this state, which resulted in hundreds of Texans losing their lives and millions more losing their heat, electricity, and running water for days.”
O’Rourke embarked on a thematic trek around the state last month that his campaign named the “Keeping the Lights on Tour.” During the tour, he contended that due to the maximum prices ERCOT charged power companies during the storm, they, in turn, are passing down the costs to consumers. O’Rourke has repeatedly called the increase Texans have seen in their utility bills the “Abbott tax.”
Magness’ testimony also caught the attention of State Senator Charles Schwertner (R-Georgetown), the chairman of the Senate’s Business and Commerce (B&C) Committee. Schwertner said Magness’ comments are the opposite of what he said in previous testimony in front of the B&C Committee following last year’s winter storm.
“Today’s trial testimony by former ERCOT CEO Magness appears to contradict his testimony before the B&C committee last session,” Schwertner said on Twitter.
“If true, this action misled the people of Texas and has put at peril the integrity of the Legislature,” Schwertner continued. “I plan to look into this issue further.”
