The series of fierce winter storms that froze most of the nation the week of February 15th hit unprepared Texas extremely hard showing a major weakness in its electrical grid. The storms hit many states, and some others had electrical shortages, but only Texas found itself with a near catastrophic grid collapse. How did this weather interruption cause so much problem for Texans and Texas industries?
The extent of the problem: At the peak of the disaster, about 4.5 million Texas households were without power as temperatures plummeted well below freezing. Entire urban skylines such as in Dallas went dark. Individuals were forced to extreme measures in their own homes to stay warm such as wrapping up in winter outdoor clothes or starting fires inside their houses without having a viable fireplace. At least 37 people died. In addition to electrical outages, the grid’s failure impacted many regional water systems causing unsafe drinking water. Families were beset with boil water notices when there was no power or gas to do so. Further, the winter storm led to a run on grocery stores emptying them out. These same stores had resupply problems owing to the weather conditions that created a “food supply chain problem like we’ve never seen before, even with Covid-19,” said Sid Miller, Texas Agriculture Commissioner.
What went wrong?: The Texas power grid is managed by the Electric Reliability Council of Texas (ERCOT). Apparently not anticipating a serious winter storm, they underestimated demand and did not have a ready backup plan to rely on in case of emergency. Failing to predict a serious storm such as this one could be forgiven, but it’s hard to say that about not having an effective emergency plan to fall back on. Texas had a similar cold weather condition in 2011 which also caused blackouts. Federal regulators then warned ERCOT that the Texas grid was vulnerable. Owing to their exemption from Federal Regulation, the ERCOT management made their own decisions about what to do in the way of upgrading and protecting the state from further weather-related power outages. The Texas grid’s problems were made more apparent last summer when brownouts were necessary to balance the grid. This demonstrated the grid’s shortage of capacity and lack of an emergency source to tap other than the regional open power market.
Stand-alone grid design: This unique design of the state’s electrical market is also largely to blame. Texas is the only state in the continental U.S. that has a stand-alone power grid, known as the Texas Interconnection. It precludes the importation of available excess power from either of the other two power grids which combine the power companies of all other continental states. The “stand alone” position taken by ERCOT and Texas goes back to the 1930’s when the local power grids were not all interconnected. Texas has been exempted from interstate commerce regulation since joining the union in 1845. In 1935, Congress passed the Federal Power Act to give authority to the Federal Government to regulate interstate power transmission. With this, many Texas power companies decided to exercise their right of exemption and not participate in transmitting power to any other state. The demand for electric power during World War II in Texas, especially along the Gulf Coast, led to Texas power companies consolidating their grids to meet the rising demand. Sometime later in 1970, ERCOT was founded as a non-profit organization subject to oversight by the Utility Commission of Texas, and the Texas Legislature.
No capacity market: Texas does not have a “capacity market” that’s designed to ensure that extra power would be available for a sudden surge in demand. Capacity markets work in other states, but the tradeoff becomes higher monthly bills. Discussions about establishing one should begin to take place in Austin soon.
Who gets penalized?: In other areas, monetary penalties apply when reliability of service is impaired even by inclement weather. In Texas, there is no penalty for the power systems failing other than public complaints, lawsuits, and politicians pointing fingers at someone else. When local power companies in Texas had to resort to the regional open power market for extra power, the market driven prices skyrocketed. Following the rules of the game, the power companies passed the costs down to the users giving some households a one-month power bill of as much as $9,000. Several retail power providers could face bankruptcies as they tried to manage surging wholesale power prices. Owing to perceived negligence on the part of the ERCOT, lawsuits are popping up where children or whole families have died trying to stay warm without heat.
Conclusions: Global warming not withstanding, it’s very hard to predict weather patterns over the longer term. A fallback plan, such as a capacity market, might take years to prepare for. If Texas believes in their stand-alone policy of not participating in either of the other two U.S. continental power grids, then the legislature and ERCOT had better decide on developing a grid-wide capacity market in all four corners of the state. Mother Nature should never be taken for granted.
Sources: The Economist, February 20, 2021.
NBC News, Texas Set the Stage For the Energy Crisis More Than 80 Years Ago, Deon J. Hampton, February 19, 2021.
CNN, Texas is still reeling from devastating storms and for some, recovery could take months, Christina Maxouris, February 22, 2021.
Wikipedia.
so tragic! it’s hard to understand the thinking of the “powers that be” in texas. hopefully, they will join the rest of us now.
The Texas politicians should not be forgiven for being unprepared for what happened.