Don’t blame Texas energy players for blackout, blame the electricity grid’s irresponsible game
By Chris Tomlinson 2/17/21
While we may not know the details for months, the fault lies ultimately with the Electric Reliability Council of Texas, which operates the grid that supplies power to most Texans. And with the Texas Legislature, which has failed to regulate a wholesale electricity market that prioritizes profit over resilience.
Electricity generators compete to meet the state’s power needs with the cheapest sources, whether coal, nuclear, wind, natural gas, or solar. ERCOT forecasts the expected demand weeks in advance, companies bid to provide the cheapest power, and ERCOT contracts for what it needs the day before.
No prediction is perfect, though, so ERCOT builds in a reserve. The price paid to generators is based on the actual consumption, though, which means Texans do not pay for power they do not use. Other states pay generators to standby if needed, but not ERCOT.
The typical price for ERCOT electricity is about $25 for a megawatt hour. But ERCOT can pay as much as $9,000 to get power providers to generate enough electricity to meet the state’s needs.