• Philip Ammerman

The Great Texas Electricity Debacle


You would think that somewhere, sometime there would be a limit to the criminal buffoonery that has become normal in the United States. But no.


On the weekend of February 14th, a winter storm poured ice and snow over Texas, leading to surging demand for electricity to heat homes and offices. The storm is considered an outlier: Texas rarely suffers from extreme cold weather of this kind.


However, Texas does suffer from increasing episodes of other extreme weather, including severe storms and hurricanes, drought, flooding, tornadoes, wildfires and others. Rising sea levels are widely expected, and Texas is considered to be at risk due to the impact of global warming.


According to the Texas Tribune, the electricity regulator ERCOT,


…announced Sunday night that it had set a winter record for power demand, reaching 69,150 megawatts between 6 and 7 p.m. ERCOT said Monday morning that 30,000 megawatts of power generation had been forced off the system.


By the beginning of last week, over 4 million households in Texas were without power.


What happened next?


Governor Greg Abbott went on Sean Hannity (Fox News) and tried to shift blame onto renewable energy.


https://twitter.com/ndrew_lawrence/status/1361866553998909442?s=20


This is despite the fact that contributions of wind and solar to the Texas grid are about 21%, according to the Texas Comptroller, and that these were licensed by the state to begin with. If Governor Abbott is so worried about intermittence, why didn’t he act on it? The state government is responsible for licensing energy generation in Texas.


Moreover, the problem has little to do with renewable energy and everything to do with the natural gas supply chain in winter conditions. According to the Texas Tribune:


Officials for the Electric Reliability Council of Texas, which manages most of Texas’ grid, said the primary cause of the outages Tuesday appeared to be the state’s natural gas providers. Many are not designed to withstand such low temperatures on equipment or during production.


By some estimates, nearly half of the state’s natural gas production has screeched to a halt due to the extremely low temperatures, while freezing components at natural gas-fired power plants have forced some operators to shut down.


More than half of ERCOT’s winter generating capacity, largely powered by natural gas, was offline due to the storm, an estimated 45 gigawatts, according to Dan Woodfin, a senior director at ERCOT.


It’s estimated that about 80% of the grid’s capacity, or 67 gigawatts, could be generated by natural gas, coal and some nuclear power. Only 7% of ERCOT’s forecasted winter capacity, or 6 gigawatts, was expected to come from various wind power sources across the state.


So, parts of Texas have been without power for 3-4 days in the midst of an arctic storm. Many parts of the state are now dealing with frozen water pipes.


By the end of the week, consumers started receiving electricity bills. Yesterday, the New York Times reported that Scott Willoughby, a 63-year old Army veteran and pensioner living in Dallas, was charged $ 16,752 for electricity.


Governor Abbott is now saying:


“We have a responsibility to protect Texans from spikes in their energy bills that are a result of the severe winter weather and power outages," said Governor Abbott. "Today’s meeting was productive, and I applaud Republican and Democrat members of the Legislature for putting aside partisan politics to work together on this challenge. We are moving quickly to alleviate this problem and will continue to work collaboratively throughout this week on solutions to help Texas families and ensure they do not get stuck with skyrocketing energy bills.”


So, let’s look at this retrospectively:



The purported solution offered by Abbott isn’t to regulate the energy sector effectively (including taking responsibility for grid maintenance and reserve capacity, or offering stable prices to customers): it’s the call for unity to address a symptom of poor regulation: sky-high, variable electricity charges.


And this call to unity, of course, takes place after years of Republican control over the Governor’s office and the state legislature. And after all the events of this past election, where most elected Republicans objected to Joe Biden’s win.


The electricity generation matrix and distribution grid today works in pretty much the same way all over the world. And all over the world, elected officials, government regulators and investors struggle with basic issues such as:


  • How do we transition from polluting hydrocarbon generation to cleaner renewable energy?

  • How do we deal with issues like intermittence of renewable energy, spare generation and storage capacity in the grid, and spikes in demand?

  • How do we ensure that the grid balances energy demand, enables fair access by generators to consumers, and ensures consumer protection through fair prices?

  • How can we promote energy efficiency, lowering per-household demand for electricity, and therefore contributing to energy security?

  • Given the high costs of energy failure (and the high costs of climate change), how do we ensure an adequate balance between public and private ownership and regulation of the entire sector?

  • How should we avoid regulatory capture by ensuring energy interests influencing elected politicians with campaign contributions?


There are perhaps no perfect solutions, but there are workable ones, as many US States and many other countries demonstrate.


But we don’t see these questions being asked by Governor Abbott. What we see is the fake outrage of a system politician doing everything possible to safeguard his political contributions while deflecting past errors.


We see that technocratic questions more properly solved by engineers and consumer advocates have become distorted with non-starter issues such as Texas sovereignty and the “bad” Federal government.


In the meantime, some poor retiree gets an electricity bill for $ 16,752.


You couldn’t make this stuff up if you tried.


As Americans, we regularly talk about corruption in Russia or China or Nigeria. It’s high time we start talking about corruption at home.



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