Bloomberg News

Texas Power Grid Faces Record Heat After Blackouts

April 18, 2006

Texas, the largest U.S. power- consuming state, may be vulnerable to more electricity failures amid record heat and generator shutdowns after yesterday having its first rolling blackouts since 1989.

``We're not out of the woods yet,'' Paul Wattles, a spokesman for the Electric Reliability Council of Texas, said today in a telephone interview. ``We've got another scorcher of a day today.''

The council, known as ERCOT, ordered rolling blackouts in 15-minute intervals yesterday after hot weather boosted power demand and the unexpected shutdowns of four generators in central Texas caused a sudden drop in supplies. Temperatures today will soar to 100 degrees Fahrenheit (38 Celsius) in Dallas and to 92 degrees in Houston, the National Weather Service said.

Wattles said power supplies today should be adequate to meet demand. ERCOT, the Texas grid operator, expects demand today of about 53,000 megawatts, he said, and supplies should rise to about 58,000 megawatts.

ERCOT is asking residential power users to conserve energy by raising thermostats 1 degree and not running washing machines or dishwashers during peak demand periods, from 4 p.m. to 6 p.m.

Blackouts rolled across the state yesterday from 4:13 p.m. until 6:10 p.m., Wattles said. ERCOT runs a grid that serves about 8 million households from Laredo on the Mexican border to the Louisiana border in the east.

Power Cuts

Houston's CenterPoint Energy Inc. (CNP:US) cut power to between 68,000 and 78,000 customers during each 15-minute interval, company spokeswoman Leticia Lowe said.

CenterPoint doesn't generate power in its home state. The company distributes electricity to about 1.9 million Houston- area customers of power retailers, Lowe said.

Conservation efforts may be critical in avoiding additional blackouts today, said John Hardesty, a spokesman for Dallas- based TXU Corp., the largest Texas power producer.

``We just don't know what's going to happen today,'' Hardesty said. A front of cooler weather that is forecast to reach Dallas tomorrow may begin affecting the edge of the state today, easing stress on the power grid, he said.

Today's high temperature in Dallas will tie the record for this date and will be 26 degrees above normal, government forecasters said. Demand for power to cool homes will soar to more than double normal levels in parts of the South, according to forecaster Weather Derivatives Inc. of Belton, Missouri.

Summer in April

ERCOT mandates that generators have capacity to provide as much as 12.5 percent more power than typically needed during peak demand periods. Some generators undergo maintenance in March and April in preparation for the hottest-weather months.

``We're ready for temperatures like this in mid-August, but we're not ready for them in late April,'' ERCOT's Wattles said. ``A good number of plants are down for schedule maintenance this time of year.''

About 20 percent of ERCOT's generating capacity is idled for maintenance and other scheduled reasons, Wattles said.

The excessive heat yesterday forced ERCOT to enter phase 1 of its emergency plan by telling generators to prepare extra power if needed. ERCOT then went to phase 2, cutting about 1,150 megawatts to so-called interruptible industrial users, Wattles said. Such users typically pay less for their power with the understanding that they will be the first cut in an emergency.

Generators Shut Down

The loss of power from four generators in central Texas forced ERCOT to skip phase 3 -- calling on residential customers to conserve -- and move immediately to rolling blackouts, Wattles said. About 200,000 customers at a time lost power for 15 minutes, cutting demand by another 1,000 megawatts, he said.

Wattles, citing ERCOT policy, declined to identify the generators that were shut down unexpectedly.

Dannon Co.'s yogurt and dairy drink factory in Fort Worth was shut down for four and a half hours yesterday, company spokesman Michael Neuwirth said. He declined to give an estimated cost of the damage and wouldn't comment on terms of the plant's power-service contract.

``We were not notified in advance,'' Neuwirth said of the shutdown from 5 p.m. to 9:30 p.m. local time. ``We did incur some losses of products.''

At Dallas-based Texas Instruments Inc. (TXN:US), the world's biggest maker of mobile-phone chips, a backup power system kept operations from being affected by the blackouts, company spokeswoman Sharon Hampton said.

To contact the reporter on this story: Jim Kennett in Houston at

To contact the editor responsible for this story: Robert Dieterich at

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