Winter storm that led to power outages in Texas had reverberating impacts for FEUS

Farmington Daily Times

Snow blankets a soccer field at the north end of the San Juan College campus in Farmington on Feb. 16, 2021.

AZTEC — A winter storm that left millions without power in Texas had reverberating effects that were felt even at Farmington Electric Utility System.

FEUS Director Hank Adair presented a slide that he called “One Week In Texas and its Effect on FEUS” to the Farmington Public Utility Commission on March 10. This image showed how the storm in Texas impacted FEUS.

As Texas utilities initiated rolling blackouts in an effort to stabilize the grid, the price of electricity from the market skyrocketed. During that week, it spent $827,374 on purchased power, which is $659,294 more than it would normally typically spend for that power.

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On Feb. 12, power from the market was selling at $67.58 per megawatt hour. By Feb. 16, that increased to $323.40 per megawatt hour.

But Farmington was fortunate compared to other utilities. The city owns its own generation assets including the Bluffview Power Plant, as well as a share in San Juan Generating Station and power from Navajo Dam.

Adair said all of these assets were up and running with minimal outages during the week when the storm occurred.

Natural gas originally purchased for the Bluffview Power Plant, pictured on Tuesday, Jan. 16, 2017 on West Murray Drive in Farmington, was sold back to the market at a profit last month to offset skyrocketing electricity costs and help Farmington's utility system basically break even during a storm that affected energy market costs.

When the price of natural gas went up during the storm, Farmington was able to sell some of its natural gas for the Bluffview back to the market. This allowed Farmington Electric Utility System to essentially break even during that week.

On Feb. 12, gas was selling for $10.64 per million British thermal units. That price reached its peak on Feb. 17, when gas sold for $163.69.

Other utilities in the state were not as fortunate. The New Mexico Public Regulation Commission has opened a docket to look at the financial impact the storm had on regulated utilities including New Mexico Gas Company and Public Service Company of New Mexico. The increase in the cost of providing electricity and natural gas could signal rate increases in the future for customers.

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Adair said the lesson learned from the storm is that utilities need to have a good resource mix.

Farmington will start work on its integrated resource plan in the upcoming months. One of the questions that this plan will address is if the city should purchase power, build new generation or buy new generation assets.

The meeting recording can be viewed at fmtn.org/AgendaCenter.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.

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