The Texas Public Utility Commission, fully reconstituted with new appointees by Governor Greg Abbott since last February, is still working on creating a model for revamping its regulations that govern the state’s electricity market, but no final rule has yet been proposed. The PUC’s new chairman, Peter Lake, recently told the Dallas Morning News that he plans to introduce a “strawman” soon that will serve as a starting point for negotiations over revised rules. That’s great, but comes far too late to protect consumers through this coming winter.
Whether new regulations will ultimately impose any real requirements for winterization of existing facilities and demand or incentivize the building of much-needed new thermal generating capacity on the state’s grid is something no one is able to currently guarantee. This is the reality Texans face today as the coming winter approaches. It is a reality that reflects the state legislature’s latest lost opportunity to correct chronic issues impacting the grid that have been well-known for many years.
The process that Texas policymakers have engaged in since last February’s winter storm event is basically a carbon copy of the process that took place in the wake of the state’s previous Big Freeze event that hit the state in February of 2011. In fact, it has all played out exactly as I speculated and feared it might in a piece I published here on February 15, as millions of Texans, including me and my wife, were still suffering through the depths of the blackouts.
Here is what I said then, in part:
The last time anything like this happened in Texas was a decade ago, on February 2, 2011, when ERCOT, the manager of the state’s power grid, was forced to implement rolling blackouts during a similar freak round of cold weather. The proximate cause of that situation was ultimately identified to have been instigated when several giant coal-fired power plants froze up in the midst of near-zero degree temperatures. The grid would have survived those outages had the state’s natural gas and wind capacity been able to remain up and running, but the majority of the wind turbines in West Texas also froze up, as did several major natural gas pipeline systems.
Sound familiar? Here’s another excerpt from that piece:
After a round of hearings and investigations, state regulators recommended retrofits and equipment upgrades that were supposedly designed to prevent a replay of those blackouts. Yet, as millions of Texans sit in their cold homes today, the replay has arrived with force.
The wake of the blackout situation of 2011 saw proponents of the various energy sources all taking shots at one another. Wind advocates pointed at natural gas; natural gas advocates pointed at wind; and everyone took shots at the coal plants. I was as guilty of that as anyone at the time, and all of that rhetorical hot air only served to confuse the situation and place counterproductive incentives on policymakers, whose resulting “solutions” implemented at the time obviously haven’t really solved anything.
That’s what happened in 2011, and an eerily-similar process involving finger-pointing, unkept promises and inadequate, slow-developing solutions has played itself out in Austin over the last 9 months.
The biggest problem – a problem that has been well-known to all involved for at least a decade now – that no one in Austin has addressed as we head into the coming winter is the issue of inadequate dispatchable reserve thermal capacity on the system. A few days after I wrote that Feb. 15 story, Governor Abbott, in a speech televised across the state, admonished the PUC and ERCOT officials for their failure to act to address these known issues and promised to call as many special sessions as needed to force the legislature to enact needed legislation to address all of them.
Despite the fact that nothing passed by the legislature during its regular session directly addressed this need for new capacity, the Governor failed to keep that promise. There was no good reason for the legislature to fail in this obligation to act, and in fact the version of SB 3 passed overwhelmingly by the state Senate contained language that would have targeted the problem.
As Lt. Governor Dan Patrick noted in an op/ed published in June, that language was stripped out of the final version of the bill that was passed by the House:
We must build more gas plants so that our dispatchable resources have the capacity to cover our electric needs now and going forward. One option is to incentivize investors to build more plants by leveling the playing field between renewables and dispatchable thermal energy. Renewables receive massive federal subsidies as well as some state incentives…Senate Bill 3 included a provision for the PUC to put renewables and thermal energy on a level playing field, but stronger language was stripped from the bill before final passage that would have assured a level playing field. That language should be restored.
In that same op/ed, Lt. Gov. Patrick urged Gov. Abbott to include this issue in the call for one of his special sessions. But the Governor, under pressure from interests who prefer to preserve the status quo in which ratepayers end up bailing out power providers and gas suppliers who failed them in a statewide emergency, chose not to do so.
Thus, the people of Texas head into the winter of 2021/2022 knowing that their power grid still features many of the same major, chronic inadequacies as the grid that failed them 9 months ago, when more than 200 Texans died freezing in the dark. Policymakers in Austin are hoping to get lucky this coming winter, knowing that past history indicates the state is only hit by these severe winter storms about once every 10 years or so. The odds are in their favor, no doubt.
As I’ve noted in the past, hope is not a plan, and with elections for every statewide office in Texas coming up in 2022, betting on it carries a very high political risk, not to mention a needless risk to human life. It didn’t have to be this way; it shouldn’t be this way.