Competitive Texas power market hindered winter storm prep - Shell

FILE PHOTO: A neighborhood experiences a power outage after winter weather caused electricity blackouts in San Marcos
Laura Sanicola
·1 min read

By Laura Sanicola

(Reuters) - Arguments that Texas should have "winterized" its electricity generators in anticipation of rare, inclement weather ignore the competitive nature of the Lone Star State's power system, a Royal Dutch Shell Plc executive said on Friday at an energy conference.

A February winter-storm surge in demand saddled the companies that sell, transmit and generate electricity in the state with about $47 billion in costs, whilst cutting power, heat and water to 4.3 million and causing dozens of deaths.

After a similar weather event in 2011, the Federal Energy Regulatory Commission recommended generators winterize facilities, but the U.S. energy regulator's recommendations were not adopted.

"It's not that easy, it's not the requirement and it's a very competitive power market," Shell's Integrated Gas & New Energies Director Maarten Wetselaar said at IHS Markit's CERAWeek conference.

There is less incentive to winterize equipment if competitors do not do so, he said.

"It was a once-in-a-generation event and clearly Texas infrastructure had not been prepared for it," Wetselaar said.

His comments echoed those made by FERC Chair Richard Glick on Thursday that generators will not voluntarily weatherize their equipment if its competitors do not follow suit.

"It will put them at a disadvantage,” Glick said at the conference.

(Reporting by Laura Sanicola; Editing by Marguerita Choy)