Rolling blackouts and the millions that were made

On February 22, 2011 Ross Baldick, whose information can be found here,  wrote an opinion piece in the Austin American Statesman  concerning the February 2nd rolling electrical blackouts and the role that ERCOT, the Electric Reliability Council of Texas, played.  Baldick is a professor in the electrical and computer engineering department at the University of Texas and ERCOT supports his research.  Baldick is an educator by profession and his credibility is genuine. The opinion piece he wrote is intended to educate the average citizen as to what ERCOT actually does and whether they prepared responsibly to avoid the kind of massive failure that occurred. What he does not do is answer the question about why so many plants failed and does note mention the “coincidence”  that the day of the cold snap wholesale power prices were 100, or more,  times what they were the day before according the ERCOT website.  Someone made many millions that day.  As a concerned electrical customer I would like to know exactly who profited the most from this market manipulation epic failure. 

During the rolling blackouts electricity prices peaked at the cap of  $3,000 per megawatt hour. The week before the cap had been set at $50. Some consumer advocacy groups estimate that the utility companies made anywhere from $46 million to $149 million that cold morning. 

“Historically, it is a very rare event for more than two generators to fail in a single day” writes Baldick but more than 50 generators failed that day.  There is a senate hearing and a federal investigation as to what caused these rolling blackouts.      I knew to prepare for the cold by wrapping my pipes and opening the cabinet doors under sinks so that nothing would freeze and cause damage.  Anyone who turned on the news knew that a big freeze was coming.  It is hard for me to fathom that power plants did not prepare adequately for the extreme weather; this is not the first time it has gotten cold in Texas.  

Since this article was written a Texas Senate hearing has started and there is a separate federal investigation as to why so many power plants failed.  ERCOT is the one that has structured the energy market and set the record prices.  Let's hope that all that money that was made is not spent in hushing up who made the most.

Many third world countries live with rolling blackouts on a daily basis.  Is this where Texas is headed?