Mr Morgan, thank you for the time.
We appreciate you joining us here.
Thank you Jason. Great to be here. The
Legislature is closing in on its final week.
Do you think state lawmakers have
adequately addressed this problem
to prevent it from happening again?
Well, not yet, but they're getting
close and I do get I commend them
because I've been in some of the
hearings and I've watched most of them.
They've done a really good job and
dug in like they never thought
they'd ever have to on energy issues,
and they have, I think,
2 very good bills that are
that are really close.
They're inching toward the finish line
that I think will address the big issues.
Well, let's talk about those big issues
because the Senate passed a bill early on.
It seemed to be a pretty strong bill.
The house is working down to the
last minute like so many you know,
legislative sessions have
been in the past as well.
What are the must pass items that
have to be included to prevent
this from happening again?
Yeah, I think there's two of them.
One is registration of
critical infrastructure.
The other is weatherization
of critical infrastructure.
And that requires you to map the
integrated gas and power systems.
To identify that the critical infrastructure
to make those two systems work together,
they they they should
work as a virtuous cycle.
And once you identify those it's designating.
Those is critical,
and once you designate it,
those is critical.
You can then earmark them and say,
OK, you need to weather eyes.
You know this critical infrastructure
and you need to register that
critical infrastructure with the
transmission and distribution utilities.
I'll be here.
Obviously electricity is all critical.
We all saw that how critical that was,
but gas I presume it's what
you're talking about as well too,
since gas supplies more than half of the
electric generation plants in this state,
those are the ones that must be
registered with the power distributors.
Yeah, I mean,
it's it's all the way from the wellhead.
To the processing plants.
To the compressors that compress
the gas into the pipelines,
and then the pipelines themselves.
That's the critical infrastructure
on the gas side. I mean,
there's probably some wells that are,
you know, that don't produce
a lot that aren't as critical,
but that that system is a continuous system.
And I think you know this,
but you know we generate power
that goes back to the wellhead,
goes to the processing plant,
goes to compressor and the pipeline.
They give us gas so we can make power.
So those two things have to work.
Together and you know part of our
problem with Yuri is they did not.
How confident are you Mr.
Morgan that something will actually
get done before signee die before
the legislature ends on May 31st?
I'm very confident I am very
confident and I'm usually not
very confident on these matters.
But I I've heard it enough times
from the leadership in Austin that
we need these two bills and I think
right now it's all coming down to as
it normally does to final wording.
This the short strokes, but I think.
That they are compelled to do
something on weatherization and
to do something on registration.
We saw you as the first witness
to testify in a house committee.
You have since written op eds for
the Dallas Morning News for the
Houston Chronicle, why are you
specifically coming out so strongly?
You know, taking a position on this?
Well, look, I think we we did something that
I thought I would never see in Mycareer.
We took a product electricity that
we all wake up with and we take it
for granted which I am fine with.
That means we're doing our job and
we create a situation where people
are now worrying about whether they
get electricity or not and that
should have never happened and I
am committed to tell the truth to
layout the facts of what happened.
And to push measures to make
sure it never happens again.
And of course we lost money,
but to be honest with you, Jason,
that's a small piece of this.
The big piece of it is that we owe
it to the people to the Texans
that this never happens again,
and I feel terrible that it did,
and I want to be a part of the solution.
We heard that sentiment in
your in your testimony.
Also in the questions and answers
from the House State Affairs
Committee as well, you mentioned.
The financial loss for Vistra,
specifically $1.6 billion,
I believe, is what I remember on
the other side of the equation,
you talk about the cycle.
Earlier, the gas companies.
They made billions as well,
all for what happened in that
week of February the 14th on the
outside not being apart of either
industry or other company here.
This seems like one of the
greatest transfers of wealth ever.
And if I'm a gas company,
I try to protect that to make sure
that I can't make money in the future.
Is that happening
right now? I think it is.
I think it is the gas companies
profit from their own dysfunction.
And you know, I think you know there
there's big money behind keeping these
things from happening that need to happen,
but I think it's too big this time.
Jason, when you have 4 to 5,000,000 people
without power and you have people die,
you have to step beyond that.
And I believe that at the end of the
day most companies gas and electric
will see the light and they'll
jump on board with this and so.
But. But yeah, I mean,
there's a huge incentive and it's a
perverse incentive for the gas guys.
And I hate to see that.
They passed all their costs
on to their customers.
We did not.
Not one of our residential customers
saw a price increase even though
we saw prices at $9000 a MW hour.
That was our promise to our customers,
but that didn't happen on the gas site.
Mr Morgan, we heard the Governor,
Abbott, and Lieutenant Governor Dan
Patrick both declare this as a priority,
an emergency item, energy reform early
on in February when all this happened.
But since then, it seems like this
is coming down to the wire that
there's been a lot of pushback.
This is obviously how the
legislative sausage is made.
I'm curious, so looking back
at the legislative session,
would you have done anything differently?
No, I really think they've done a nice job.
I have to tell you that they have
been very serious about this.
They and I'm, you know,
I, I won't say everybody,
but I'd say the the overwhelming majority of
legislators have tried to get to the truth.
I've tried to understand what
happened and are seriously trying
to come up with solution and look.
I've I've been in many sessions before.
This is the way the game plays it,
you know, comes down to the last minute.
You know. I've also been able to meet
with some of the other leadership and.
They are serious about this.
They want to get something done and I
think they're learning the one thing Jason.
I'll say this is a complicated business and
it's not just electricity they found out.
It's also natural gas,
and it's all complicated,
and it's all nested together.
That takes time to unwind and
to find out what the truth is.
That's it, you know,
that's a big effort,
and most of these guys are not well
schooled in this this business,
so I think they've been deliberate about it.
They put the time in and they are now ready.
I think to put forward and finish
legislation that will fix this so that
we can all look at our constituents
and say we fix this because if we walk
away at this session and cannot say that,
then we've failed.
You
sound pretty confident though,
considering there is still
another week to go in the session.
I just think it's too big.
It's too big, it's it's.
It's about the people in Texas.
It's also about the economy.
In Texas we have the number one
economy in in in the country.
You know, Governor Abbott's done a
heckuva job bringing in companies,
but when I go to a meeting,
a chamber meeting,
and I hear Texas Instruments
say we're thinking twice about
putting in a semi conductor plant.
Because of electricity,
we can't miss on this one.
We have to have electricity.
It is fundamental to everyday life
for businesses and people alike.
And when it's that big a deal,
it's my view that elected officials will
come together and do the right thing.
Have you heard that from Texas Instruments?
I did hear that. I didn't hear them
say that they were not going to do it,
but they said it made them think. That's
pretty frightening considering
the growth rate this state has
had for the past 20 or 30 years.
A couple of questions here for you on this.
Considering the confidence I'm hearing
from you, I think back to 2011.
I covered the rolling blackouts,
brownouts, back in 2011.
I covered. Obviously what happened
in February of this year?
Are these changes going to be
enough though to prevent this from
happening again, and you know,
next winter or 10 years from now?
I think they will be.
I would caveat it just to say
this Jason back in 2011 and back
when we when we restructured.
I was here when we
restructured the entire market.
The grid was predominantly supplied
on a generation front by power
generating plants that were
dispatchable meaning that they had
fuel either onsite or instantaneous
through a pipeline or a nuclear
plant and we now have a grid that is.
That has generation that's about 30%,
which is intermittent renewables,
and part of the story here is, well is.
We brought on these renewables.
We built the CREZ transmission project.
They priced very low in the market.
They shoved out coal and natural gas
plants and what's happened is is we
now are dependent for reliability
purposes on intermittent resources.
So I do think the last thing I'd say
that we need to do is we need to address,
you know, getting dispatchable resources,
more reserves of dispatchable resources,
predominantly gas,
which is why it's so important to get
the gas system right because we need
those kind of. Plants as we grow.
You know,
in renewables and we are going
to grow in renewables.
Here's
the last question I have for you as well.
There was a lot of focus on reforming
our cot, changing the way our
card is made up, a lot of focus
on the Public Utility Commission,
both of which oversee electricity.
In this state.
There hasn't been the same focus
on the railroad Commission.
Are lawmakers missing the boat on that?
That's a complicated issue with the
Railroad Commission because of its
relationship in the Constitution of Texas,
I would only say this that I'm still looking
for what entity in the state of Texas?
That has oversight and regulates
the gas of price on the Intrust
8 Gaslight pipeline system.
There isn't anybody an we have a a market
monitor and we have an enforcement arm
in the PUC that looks at every single
transaction in the electric side.
And there's just not symmetry there,
so I do believe that we need a
different type of regulation on the gas
business inside the state of Texas.
I think it should be looked at,
and it ought to be similar to what the
Federal Energy Regulatory Commission,
the rules that they have in place for
the Interstate gas pipeline system.
So yeah, I,
I don't think there's symmetry there,
and I think that's part of the issue.
Mr Morgan, we appreciate your time.
Thank you.