Opinion: Knee-jerk responses to the power outages won’t solve Texas’ reliability problem
Consumer protections, local utility upgrades and natural gas availability should be key considerations for lawmakers and regulators.
As Texas digs itself out of the five-layer electricity mess triggered by last month’s freezing weather, we must consider long-term ways to fix our electric grid.
While there are some immediate ways that we can begin to strengthen reliability, we are seeing knee-jerk responses that aren’t likely to be helpful and could waste the opportunity to make real improvements to our system.
The debacle started when heavy ice caused tree branches to short into local utility distribution lines, triggering local outages. Then came bitterly cold weather that drove up electricity demand to record levels while also causing a record number of insufficiently winterized power plants to trip off-line.
With a shortage of supply, the Texas grid operator, the Electric Reliability Council of Texas, had no choice but to force local utilities to cut power to their customers. Making the situation worse, the power affected water systems.
Extreme cold events rarely occur in our region, but Texans remember a similar disruption in 2011. Many are asking why the lessons from past failures were not codified into effective, mandatory winterization practices instead of only recommended actions. Colder regions elsewhere in the world ensure that their natural gas, coal, nuclear, wind and solar farms are resilient to stretches of extreme cold.
Consumer protection, education and better retail rate transparency should be a focus of the Public Utility Commission. Retail electric provider Griddy has been dropped from the ERCOT wholesale market after the retailer faced the prospect of sending painfully high bills to customers who chose its variable rate plan. Unlike most electricity retailers, Griddy linked its retail price per kilowatt hour to the sometimes wildly volatile real-time wholesale energy price. The majority of time, this plan offered very low retail prices. However, when wholesale prices rose to the market cap of $9,000 per megawatt hour and stayed there for days, Griddy customers weren’t protected.
Further, the PUC and ERCOT should examine its pricing mechanism designed to incentivize more power generation. By adjusting the market to hit the $9,000/MWH cap at a time when many power plants couldn’t operate because of the freeze, regulators ended up boosting prices without boosting the supply of power. If bankruptcy filings are any indication, Texas could face a financial tsunami.
David Tuttle is a research associate in the Energy Institute at the University of Texas at Austin. He wrote this column for The Dallas Morning News.