Texas grid failure fueled by rigid politics

The February 2021 Texas energy crisis affected millions of people for up to four days. Its worst effects was where the Electric Reliability Council of Texas manages an electric grid which operates independently from the much larger eastern and western U.S. electric grids.

The crisis caused hundreds of deaths from the cold. Some individual homeowners’ monthly electric bills increased to thousands of dollars. The total economic cost was nearly $200 billion. It could have been worse. The cumulative failures of the system came within five minutes of shutting the ERCOT grid down entirely. ERCOT CEO Bill Magness said then it would have taken weeks for the grid to recover.

To avoid situations like this one, not just in Texas, but in all locations, regulators and industry must work together to make sound economic investments in a stable, reliable, low-cost grid.

Utility investments in supply-side systems, such as new power plants, transmission interconnections for new plants and resilience systems must be approved by utility regulatory bodies. Demand-side concepts, like time-of-use rates and incentives for voluntary load shedding, must also be approved. Regulators need to understand the grid’s existing and likely future problems, and the technological and economic viability of possible solutions. For changes to be lasting and successful, the public must support well-informed regulators’ choices.

It is questionable as to whether Texas’ regulators and public have learned enough or done enough to prevent a similar future crisis.

ERCOT does not participate in interstate commerce to avoid federal regulation so is separate from the larger U.S. grids. Former Texas governor Rick Perry said, on the second day of the crisis, before people froze to death, “Texans would be without electricity for longer than three days to keep the federal government out of their business.”

However, not all of Texas is on the ERCOT grid. Being part of a larger grid contributes to resilience. The part of Texas on the western grid didn’t have a crisis. The part of Texas on the eastern grid recovered by the second day. Was Perry right? Does the Texan public clearly understand what happened? Either way, no serious discussion has taken place on interconnecting ERCOT with either larger grid.

During early hours of the crisis, some of Texas’ politicians and media blamed wind power. Some continued to do so even after the much more significant failures of natural gas systems had been recognized by the energy industry.

Intentional misrepresentations about the causes of problems are not unique to the Texas energy industry. However, given that utilities require political support for regulatory reform and new investment, blatant lying by influential politicians and institutions is particularly pernicious in this case. Failure to acknowledge, and discuss honestly, the facts about what actually happened makes it difficult to build public support for new regulations, or for expensive investments in resilience.

Improving Texas’ grid resilience, other than by doubling down on the gas system by requiring better preparation for cold weather, does not appear to have been seriously discussed. No proposals passed for more than a year. It is possible that the gas industry has had too much influence on the new regulations, and it is questionable as to how effective the new regulations will be.