Zombie Gas and Coal Plants May Rise From Their Graves Across Texas This Winter

Here Lies Decker Power Plant

Photo: Decker Power Plant... zombified (original photo by Al Braden).

By Cyrus Reed and Becky Bullard

Once again, there is concern over the potential that extreme weather could stress our main electric grid, so last week the Electric Reliability Council of Texas (ERCOT) made an astonishing request to bring shuttered, polluting gas and coal plants back from the dead to try and avert a possible energy emergency this winter. As we have said repeatedly, the Texas Legislature, the Public Utility Commission of Texas (PUCT), and ERCOT have largely ignored the most cost-effective solution to fix the grid – energy efficiency – leading to repeated “emergencies” and expensive solutions. 

ERCOT wants to go outside its normal operating procedures and has issued a “request for proposals” (RFP) from energy producers to provide up to 3,000 MW of extra capacity due to a worry that demand might exceed energy supplies on a cold December, January, or February morning. (For reference, on a hot summer day or particularly cold winter day, it takes about 1 megawatt to power 200 homes. On a more typical day, 1 megawatt can power from 750 to 1,000 homes.) And of course, ultimately all consumers would pay for this decision, which potentially could cost hundreds of millions of dollars – or even more. 

In the RFP, ERCOT listed out a number of “mothballed” and decommissioned coal and gas plants that could potentially be brought back online for the winter. In addition to those plants, ERCOT did suggest that at least part of the supposed need could be met with contracts for demand response – literally shutting down energy use – most likely from large energy consumers like data centers or steel mills. This RFP from ERCOT stunned energy industry insiders for several reasons:

  1. Plants get closed down for a reason. Coal and gas plants that have already retired and have not operated in several years do not have existing, up-to-date operating and environmental permits. And those permitting processes are not quick or cheap. For example, the J.T. Deely Power Plant in San Antonio, nicknamed “Dirty Deely,” was shut down partly because it would have cost $600 million to put in pollution controls to make it clean enough to run, according to the San Antonio Express-News. Plus, the contracts for old plants to supply gas or coal likely no longer exist. 
  2. The timeline is nearly impossible. This RFP was issued out of the blue by ERCOT on October 2, with a deadline of November 6 for the proposals to be returned. Selected plants would be announced the day after Thanksgiving and then be expected to come online by December 1. Even if a power plant has not been entirely decommissioned, it is just not in shape to begin operations a few weeks from now. Even for demand response customers who would agree to cut their energy use at ERCOT’s request, the RFP was clear it had to be new customers that weren’t already participating in such programs and had not used demand response last winter. 
  3. This is not the way the Texas energy market is set up. It’s not normal for ERCOT to contract for extra power. It’s supposed to be the market that reacts to conditions to provide juice in response to demand. But more extreme winter weather than we’ve had in the past is causing challenges in the Texas energy market, as reported in this Texas Standard piece. 

Perhaps ERCOT got spooked after it suddenly had to issue a Stage 2 Energy Emergency Alert (EEA) on September 6 (skipping entirely over Stage 1), when energy demand suddenly came close to surpassing available supply and triggering rolling blackouts. This was the first time ERCOT had to issue an Energy Emergency Alert since the grid failed during Winter Storm Uri in 2021. We still have not gotten the full report on what caused the sudden emergency situation on September 6, though much of the problem arose because of congestion on some lines in South Texas, preventing evening wind-generated power from reaching loads in Central Texas. Despite that close call and 11 official “Appeals for Conservation” from ERCOT, the grid held over the summer.

But winter conditions are very different from summer. For one, some plants may be in maintenance or choose not to operate due to lower energy prices. Secondly, even as the state expands our use of solar power, days are shorter and the sun is less intense. Finally, older buildings and homes that rely on electric resistance heat – as opposed to modern, efficient heat pumps – cause sudden spikes in demand when there is a cold snap. 

ERCOT shared that when its probability models show a greater than 10% chance it will have to issue an Energy Emergency Alert, it considers that an “elevated risk.” The basis for ERCOT’s surprise decision to contract for emergency capacity was a probability analysis that found that although in normal conditions there would be no issues this winter with meeting demand, the 2023/24 winter models are showing a 19.9% risk of an Energy Emergency Alert if we have more severe winter weather similar to 2022’s Winter Storm Elliott – almost double the threshold for an “elevated risk.” It’s important to note that an Energy Emergency Alert does not mean rolling blackouts or load shed, but simply that supply and demand are getting dangerously close. Still, the analysis did find some risk that load sheds could occur (more than 1 percent). 

With ERCOT calculating a greater demand in extreme weather conditions than last winter and only a few new “dispatchable” (aka immediately available) resources to meet that growth, ERCOT decided the risk was unacceptable – hence the decision to summon zombie coal and gas plants from the grave. (It is worth noting that they don’t seem to be worried if we have an average/normal year. Normal winter weather means only a 5% probability we could go into an Energy Emergency Alert, when ERCOT has tools to bring back-up generation and existing demand response – aka shifting energy use and energy conservation – programs to bear.)

So what happens next?

The Public Utility Commission of Texas (PUCT), which regulates the state’s electric utilities, will meet on Thursday, October 12, and commissioners – and perhaps other stakeholders – are sure to bring up the issue. You can be sure that the Texas Sierra Club will be there, and we will also watch the special meeting on October 20. Hopefully, the PUCT will let ERCOT know that contracting 3,000 MW of extra juice without permission and outside of the existing structure is not good public policy. The Sierra Club is planning to file comments in opposition to the proposal since it could lead to resources like Dirty Deely in San Antonio and the Decker gas steam unit in Austin back from the dead, leading to pollution in local frontline communities. 

What’s an alternative? 

As we have repeatedly stated, the cheapest and quickest way to get extra capacity and finally fix the grid is to concentrate on reducing both peak and overall energy demand through energy efficiency and demand response. As an example, Texas transmission and distribution utilities currently only spend about $125 million a year to help Texans reduce their energy use. Recently, the American Council for an Energy Efficient Economy (ACEEE) identified 10 programs that could reduce summer peaks by some 15,000 MW and winter peaks by some 25,300 MW through targeted investments over the next six years. We have been advocating for several years that the PUCT open up rulemaking on these programs, but so far they have not. Until the PUCT, ERCOT, and the Texas Legislature take the demand side more seriously, we will continue to be in an emergency situation. 

Stay tuned for updates on the zombie gas and coal plants, and don't forget to vote early or on November 7! There is another attempt being made to double down on polluting power plants in the form of Proposition 7. Read more about it here and make a plan to vote! (Early voting starts October 23 and ends on November 3. Your last day to vote is Election Day on Nov. 7.)

As winter approaches, we’ll also be sharing actions you can take to prepare for extreme cold and potential grid problems.