Michael Giberson

A regulatory filing by Energy Futures Holdings Corp., the parent company of Luminant, a major power generator in the Texas market, provides a small peak behind the curtain of confidentiality that has limited the public’s view of what all went wrong on February 2. A small peak, but a significant story:

In an 8-K filing with the Securities and Exchange Commission, EFH reported that it lost about $30 million on February 2 because of weather-related outages at several of its power plants. The outages kept the company from delivering power it had contracted to sell, so the company was responsible for purchasing power at the real-time market price to cover for its shortfall. Real-time prices spiked to the market’s $3,000 cap during the emergency.

Add that supply-side news to last Friday’s announcement that under-prepared power retailer Abacus Resources Energy has been forced from the market. As one of the participants in yesterday’s Texas senate hearings said, there are already powerful economic incentives at work to help the market avoid a repeat of the Groundhog Day blackouts.