"This is not the breakdown of the system, this is a system that is broken down by design. It's designed not to incentivize weatherization of these facilities, and not to be prepared for a cold weather event such as we had this past week. On top of that a lot of people will get the highest electricity bill they've ever had when this is done." Former San Antonio TX mayor, Julian Castro on ALL In last night.
As headlines scream about the catastrophe unfolding in Texas with over 2 million still without power, some salient facts may have been missed. For example, that the state has one of the most deregulated energy markets in the nation. This in turn has spawned a system simply not designed to survive days of freezing temperatures.
At the center of the events we find the single Texas grid operator (ERCOT): the Electric Reliability Council of Texas . It encompasses one control area, hundreds of infrastructure owners and lots of coordination to make it work.
Aside: There are, in the contiguous United States, three major interconnected systems — one covering everything east of the Rocky Mountains (the Eastern Interconnection), one for everything west of the Rocky Mountains (the Western Interconnection), and one for Texas- governed by ERCOT. The power system that serves 95 percent of the state is intentionally isolated from the rest of the country. This has been deliberate given a severely deregulated energy system is incongruent with regulated ones. In this case Texas features a competitive wholesale power market but which offers scant incentives for investment in backup power.
Ultimately, this outage, like many of the biggest blackouts before it, reflects the challenge of unanticipated events and consequences. But it also reflects a "wholesale" market system that- in order to keep costs generally cheap- plays the margins and has deregulated to an astounding extent. Among the benefits, the state could set goals, foster investment and expand transmission without input from other state or federal agencies. But the downsides of the cheap energy model include NO incentive to winterize the infrastructure - whether insulating windmill turbines, or natural gas pipelines, etc.
Thus, the gamble taken was only advantageous until a "black swan" event occurred - such as the expanding polar vortex this past week. The Texas system then had "bet the house" that saving investment money - by not winterizing generators, not insulating them, might work - and lost that bet. On paper, in theory at least, it might have looked solid given Texas generally does not have winter storms like this one. But when it did arrive, all bets were lost on any residual resilience in the ERCOT system. As the frigid temperatures set in Texas ERCOT discovered natural gas pressure was not adequate to get this energy to its destinations, and outages ensued People found their power gone, heat gone, and even water off since it depends on electricity. Many became so desperate they had to chop up backyard fences for wood to burn in fireplaces.
At the same time one beheld Texas Governor Greg Abbott appearing on FOX news and blathering about a failure in the ERCOT system's wind and solar components as being the culprits. As he put it: "As you saw our wind and solar got shut down and they were collectively more than ten percent of our power grid. This thrust Texas into a situation in which outages occurred."
Except that's horse manure. Indeed, earlier, in a setting (local news) different from the FOX Liars Axis, Abbott had come clean and told the truth, e.g. "The companies that generate the power, their operations have frozen up and trip wired, and become non-operational. This is why there is a lack of power, a lack of natural gas arriving at power generation centers across the state. That's because the ability to both manufacture and transport the natural gas has been frozen also. It's been frozen in the pipeline, frozen in the rig, frozen in the transmission line."
So which account do you believe? The one given to the local news outlet or to the Liars Axis on FOX? The latter being the one where Tucker Carlson has also been spinning lies about the windmills being responsible because "when green energy came to Texas it became totally reliant on windmills. It got cold and the windmills broke. That's what happens in the green new deal. You're without power. Millions are still without power."
As Chris Hayes sarcastically put it in response on ALL In last night:
"Yes, unbeknownst to most people, Texas became some sort of hippie commune, relying on windmills, and rainbows and flower power. Totally reliant! He actually said that. Did Alexandria Ocasio Cortex ten years ago, at the tender age of 21, parachute into the state of Texas and put up windmills under the cover of night? Were she and Al Gore just driving through the Permian Basin secretly unplugging all the rigs? How stupid does Tucker think his audience is exactly?"
This is the crazy blame game the Right's nuts and liars are playing while Texans are freezing their butts off- or nearly so- in their own homes.
The main immediate problem was frigid temperatures that stalled natural gas production, which is responsible for the majority of Texas’ power supply. Wind makes up just a fraction — 7 percent or so, by some estimates — of the state’s overall mix of power generation. But just like Minnesota, Texas could have insulated its wind turbines as opposed to letting them be exposed to the elements, just like it could have winterized its natural gas pipelines. But it chose not to in order to keep costs down, and thus bet the house nothing terrible would happen. It lost.
The way the state’s wholesale power market works, utilities have very few incentives for investment in backup power or protecting energy infrastructure. The state does not say to a generator, “Please build us some extra backup power plants, and we will charge that cost to our customers.” Why the hell would they if the main point of a deregulated energy market is to keep costs as low as possible? So you don't spend good money on investments that are costly and might never be needed anyway. But... if they do come, well, you reap the bloody whirlwind - as Texas has done.
Perversely, at the same time, the market allows a power generator to charge excessively high prices when available supply falls short — which, for an investor, could be a long shot. As a result, ERCOT’s backup power, called the spinning reserve, is lower than most other areas in the United States. But when that reserve has to be tapped - like in this week's frigid spell- Katy bar the door, because consumers will have to pay through their asses. (The way Texas wholesale market works, backup plants charged an eye-popping $9,000/mwh rate this week - while the price was $30/mwh just six days ago).
That is why some people in Houston - such as shown on ALL In last night- were getting bills for $1,622 and up. Incredibly, former TX governor Rick Perry proclaimed that Texans would rather go three days without heat than let the feds tell them what to do. Well, we'll soon see about that, eh?
How did this happen? While ERCOT had anticipated rolling blackouts and warned customers to reduce power use and expect brief outages, the demand for power far exceeded the available supply, leaving millions stuck in the dark and the cold. The spinning reserve had to be tapped, and customers dinged with super high bills.
Texas simply doesn't have a large enough backup system for when power demand shoots way up, or when regular generators go offline, as they did this week. It is a problem that plagues ERCOT every year as the hottest part of the summer approaches. This is the fault of Texas' deregulated, cheapo, wholesale market structure. Even after a winter storm in 2011 caused widespread power outages a report recommended that Texas winterize its generators, including doing what MN does for its wind turbines: using heating packs and insulated pipes. Texas declined to address the recommendations. Too costly! The rest, shall we say, is history.
Want things to improve? Either ditch the wholesale market structure in favor of one incorporating backup plans and power sharing (with other grids) or abandon the independent grid idea and join the eastern or western connection. (Like El Paso has)
See Also:
The Texas grid got crushed because its operators didn’t see the need to prepare for cold weather
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