The Woodlands Edition | February 2022

NEW LEGISLATION Two bills were passed in the Texas Legislature in 2021.

Entergy is part of the Midconti- nent Independent System Operator network, meaning it is part of the national energy grid, as opposed to the deregulated ERCOT grid. Because of this, Entergy follows federal guidelines for weatherization. The North American Electric Reliability Corporation, a regulatory author- ity tasked with reducing reliability risks across most of the continent, is requiring its winter readiness rec- ommendations be implemented by April 23, Payne said. During the Dec. 8 board meeting in The Woodlands, Taylor and Jace Car- lock, manager of distribution reliabil- ity for Entergy, said insulation efforts at power plants had been the primary focus for winterization, but Entergy also replaced 35,000 feet of under- ground cables, 200 transformers and six switch cabinets across The Wood- lands as part of a general reliability update for the area. Most of the work was done in the Panther Creek Village, Carlock said, and plans for 2022 in The Woodlands area include an additional 50,000 feet of cable replacement, 200 trans- formers and 34 switch cabinets. Entergy officials said as of Feb. 9 they were unable to estimate the total cost of the improvements made to its system. Assessing the grids Following Uri, ERCOT developed a plan in July to improve reliability called its Roadmap to Improving Grid Reliability. As of a Jan. 7 update, it high- lighted 60 projects it has been working on since the 2021 winter storm, which include communications, site assess- ments and board reorganization. Nine were on track for completion, one was marked as having “limited progress” and the others were listed as complete. Two of the on-track projects involve working with the Public Utility

Commission of Texas to implement Senate Bill 2, which reorganized ERCOT, and SB 3, which put guidelines in place to strengthen weather pre- paredness. The two bills were passed by Texas Legislature in 2021 and signed into law. In addition, according to a Jan. 12 news release from ERCOT, 324 on-site inspections had been completed for weatherization as of that time. Of the 324 inspections, 299 generation units and 22 transmission facilities passed the guidelines from the Public Utility Commission of Texas with three gen- eration units still having deficiencies. The release from ERCOT stated the Texas Legislature increased the maxi- mumpenalties for ERCOT energy com- panies violating weatherization rules to $1 million per day per violation. However, Hirs said there are still concerns regarding the grid. For example, a January report prepared by Hirs and the University of Houston noted that the bills still give the Pub- lic Utility Commission of Texas “wide discretion” to implement the law. “The underlying model behind the ERCOT market has not been changed,” Hirs said. “The mandates to weatherize are essentially unfunded mandates. We will not know how successful the operators are until the system gets tested by another freeze.” Hirs said around 20% of the energy plants reporting to the PUCT were not going to weatherize either because they would not or could not. “They are all self-reporting,” Hirs said. “ERCOT has inspected 323 plants and found that 321 of them met what- ever threshold ERCOT had in mind to be weatherized. That leaves more than 400 that have not been inspected.” Hirs added that according to his knowledge, ERCOT did not have black start units, which are used to get an energy grid going after a mas- sive blackout.

ERCOT’s roadmap states it has endorsed PUCT to begin work on a black start improvement plan, but ERCOT could not be reached for com- ment as of Feb. 9 to verify the status

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SENATE BILL 2

Reforms made to ERCOT board

or respond to Hirs’ claims. Increasing energy demands

SENATE BILL 3

Gavin Dillingham, vice president of research for the Houston Advanced Research Center, said he believes the guidelines Entergy follows resulted in fewer people in its coverage area experiencing outages during Uri. “Demand continues to grow with electrification of different sectors,” Dillingham said. Dillingham said for the Houston region in particular, major factors leading to a greater demand on the energy grid are the rising population in the area and both warmer and colder weather. “COVID[-19] slowed things down a little bit,” Dillingham said. “Con- sumption went down a bit, but it is coming right back up again.” Information from a peak demand energy forecast from ERCOT indi- cates energy demands will rise. The forecasted peak for February is 59,429 megawatts, and by 2024 the same month is anticipated to peak at 63,254 megawatts. The anticipatedpeaks for energy are largely seen in the summer months of June through September, when peak energy needs are forecast between 72,356 and 71,902 megawatts, respec- tively, this year. By 2024, the highest peak for energy needs is forecasted to be at 80,190 megawatts, according to ERCOT. Dillingham said there is now a greater focus for demand manage- ment systems and increasing energy efficiency systems. According to Dillingham, a push for alternative energy sources, including wind and solar, is also likely to emerge

Require weatherization of power generation facilities Inspections will be conducted by ERCOT and the Texas Railroad Commission Failure to weatherize can result in up to $1 million fine

SOURCE: OFFICE OF GOV. GREG ABBOTT/COMMUNITY IMPACT NEWSPAPER

WEATHERIZING A HOME Mike Dishberger with the Greater Houston Builders Association said homeowners can take steps to prevent damage to their homes if the power goes out due to cold weather.

Wrap insulation around outside pipes and hose bibs

Drain water sprinkler systems

Wrap insulation around pipes in non-living areas Wait until temperature is below 22 degrees to drip faucets

SOURCE: GREATER HOUSTON BUILDERS ASSOCIATION/ COMMUNITY IMPACT NEWSPAPER

within the next decade for the region. “Demand is increasing with pop- ulation growth, increasing tem- peratures and interests in electric vehicles,” Dillingham said.

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THE WOODLANDS EDITION • FEBRUARY 2022