UPDATE 3-Texas grid barely avoids outages as cold hits utilities

Mon Jan 6, 2014 7:48pm EST

Jan 6 (Reuters) - The Texas power grid narrowly averted rolling outages early Monday as frigid temperatures gripped the state, forcing the grid operator to take emergency steps to meet rising power demand for heating, a spokesman said.

Shortly before 7 a.m. CT (0100 GMT), the Electric Reliability Council of Texas (ERCOT) began implementing stages of its emergency plan to protect the grid as power reserves dropped dangerously low.

The emergency condition lasted less than three hours, but was reminiscent of February 2011 when ERCOT was forced to implement rolling outages for several hours after dozens of power plants were knocked offline or were unable to start due to frigid weather and strong winds across the state.

Monday's emergency is sure to complicate the debate about the need for more generation in Texas, which has divided the Public Utility Commission and raised concern among state lawmakers.

Electric supplies became tight after more than 3,700 megawatts of generation was forced to shut overnight Sunday and early Monday, Dan Woodfin, ERCOT's director of system operations, told reporters on a call. The forced outages came on top of nearly 10,000 MW of generation that was already shut for the season or for planned maintenance, he said.

Woodfin said about 1,800 MW of the 3,700 MW of the forced outages were weather-related, including two large power plants in north central Texas that he declined to name.

"It was only a couple of plants, but they were both large," Woodfin said.

Dallas-based Luminant, the largest generator in the state, reduced output at one of its two north Texas nuclear reactors at the Comanche Peak site early on Monday to repair a heater drain pump, according to nuclear regulators.

A company spokesman declined to say how much Comanche Peak 1's output was cut, citing competitive reasons. However, he said the problem was not believed to be weather-related.

"Had we lost another unit, it would have put us into EEA3," Woodfin said, referring to the point at which the grid operator interrupts power to customers for short periods to maintain grid stability.

Instead, Woodfin said ERCOT was able to avoid rolling outages by calling on about 1,600 MW of demand response, programs under which some customers are paid to curb power use.

The grid agency also imported the maximum of about 800 MW of power from outside the state on direct-current transmission links and another 180 MW from Mexico to keep the lights on, Woodfin said.

ERCOT's program requiring power plants to be better protected against cold weather, implemented after the 2011 outages, also helped, Woodfin said.

ERCOT asked residents to keep taking steps to conserve electricity until warmer temperatures arrive.

"Cold weather will continue through tomorrow morning, and we will continue to monitor conditions closely," Woodfin said. "Consumers are encouraged to use electricity wisely, and a conservation alert remains in effect throughout the ERCOT region."

Real-time power prices jumped to $5,000 per megawatt-hour at 6:30 a.m and remained at or near the $5,000 price cap for the next hour before dropping below $1,000, according to the ERCOT website.

In Texas, one megawatt can power about 500 homes during mild weather conditions and about 200 homes during high-demand periods.

Power demand reached 55,486 MW in the hour ending at 8 a.m. Monday, the grid agency said, below the winter record set on Feb. 10, 2011, of 57,265 MW.

Tuesday morning's power demand is forecast to reach 56,818 MW, according to the grid website.

Rotating outages are controlled, interruptions of electrical service usually lasting up to 45 minutes that are initiated by each utility when supplies of reserve power are exhausted. Without this safety valve, ERCOT said generators would overload and begin shutting down to avoid damage, risking a domino effect of a region-wide blackout.

The biggest power companies in ERCOT include units of privately held Energy Future Holdings, CenterPoint Energy Inc , American Electric Power Co Inc, PNM Resources Inc, NRG Energy Inc, Calpine Corp, Exelon Corp and Panda Power.

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