The chief federal bankruptcy judge in Houston publicly questioned the truthfulness of the former chair of the Public Utility Commission who testified Thursday under oath about her role in the Winter Storm Uri power-grid fiasco that forced widespread blackouts and drove power rates to $9,000 per megawatt hour.
“Everything you said makes zero sense. It also makes me really question your veracity,” Judge David Jones told DeAnn Walker, a onetime adviser to Gov. Greg Abbott, at the end of her testimony. Walker resigned from the PUC under pressure only weeks after last February’s failure of the state’s electric grid during a winter storm that brought record low temperatures to Texas.
“I will tell you I am disappointed at your conduct,” the judge continued. “I am disappointed at your lack of candor this morning. I am disappointed at your lack of reliability as a witness. You are excused as a witness.”
Walker testified on the third day of the bankruptcy trial of Brazos Electric Cooperative Inc. about the PUC’s decision to order ERCOT to dramatically raise electricity rates to encourage more power production and to reduce commercial electric usage.
Brazos, the state’s oldest and largest electric cooperative, filed for protection under Chapter 11 of the bankruptcy code last March, citing the $1.9 billion bill it received from the Electric Reliability Council of Texas, the nonprofit entity that operates the Texas power grid, for power delivered during the cold blast known as Winter Storm Uri.
Brazos is asking Jones to significantly reduce that $1.9 billion charge.
ERCOT set the emergency rate for electricity at $9,000 per megawatt hour – more than 100 times the normal rate – to encourage power producers to generate as much as possible during the debilitating storm.
On Wednesday, Bill Magness, the former CEO of ERCOT, testified that the decision to set the price of power at that maximum allowed under law was made by the PUC. He said Walker told him Abbott wanted to ensure that power blackouts end as quickly as possible and not resume.
Walker, called as a witness in the bankruptcy trial by ERCOT, repeatedly claimed under oath not to remember details of the PUC’s deliberations and actions during the storm.
The commission originally ordered the $9,000 cap price per megawatt hour on Feb. 16 last year, as power plants began freezing up. Brazos contends that the sky-high rate was kept for more than 30 hours after the worst of the crisis had passed, needlessly costing the cooperative hundreds of millions of dollars.
Walker testified that she did not consult with the other two members of the PUC about extending its pricing order, instead making the decision on her own. She said she saw no need to call a renewed meeting of the commission before continuing the order.
Walker offered no explanation when Jones asked her how she knew keeping the $9,000 rate was appropriate under the PUC’s order without consulting her fellow commissioners.
She appeared to push the judge’s patience to its limits when she said Magness, the ERCOT CEO, made the “ultimate” decision to maintain the emergency price. ERCOT has contended in court documents that it was merely following orders from the PUC and had no discretion to do otherwise.
“Why would he be making a decision?” Jones asked Walker. “He had to be following an order.”
That was when the judge told her, “Everything you said makes zero sense. It also makes me really question your veracity.”
Among others, Brazos is represented by Lou Strubeck Jr. and Nick Hendrix of O’Melveny & Myers in Dallas; Jason L. Boland, Paul Trahan, Michael M. Parker and Steve A. Peirce from the Houston, Austin and San Antonio offices of Norton Rose Fulbright; and Lino Mendiola and Michael Boldt of Eversheds Sutherland in Austin.
ERCOT is represented by Jamil N. Alibhai, Kevin M. Lippman, Deborah Perry and Ross H. Parker of Munsch Hardt Kopf & Harr in Dallas.