EXPLAINER: Texas faces energy crisis during Winter Storm Uri

Winter Storm Uri affected the United States, northern Mexico and parts of Canada. In Texas, the Electric Reliability Council of Texas (ERCOT) implemented rolling blackouts to conserve energy. Some of these blackouts lasted days and caused a devastating impact.

Texas power grid

The United States has five power grids, two big ones and three smaller ones. Between 48 states, there are three power grids used: Eastern Interconnection, Western Interconnection, and Texas Interconnection.

The Texas Interconnection is a privatized power grid managed by ERCOT that covers about 75% of its land area.

The Texas Tribune’s 2011 Texplainer piece noted the history of the grid and its privatization. The main conclusion is that it is private to avoid federal regulation. The Texplainer notes that Texas used to have different generating plants that merged during World War I. Furthermore, when President Franklin D. Roosevelt tasked the Federal Power Commission with monitoring federal power sales in 1935, Texas utilities could bypass this as long as they did not cross state lines.

The ERCOT website states that it is a nonprofit corporation overseen by the Public Utility Commission of Texas and the Texas Legislature. Founded in 1970, the company provides about 90% of the electricity used by Texas electricity consumers.

What went wrong

“It’s really a convolution of a lot of events that created the problem,” said Charles McConnell, Director of the Center for Carbon Management in Energy at University of Houston Main campus. “Long story short, the supplies of energy were inadequate to meet the demand and when that happens in a grid and you begin to lose the ability to meet the demands, you have to begin to curtail demand. Because supply and demand has to be matched on an electrical grid, when it’s not and the demand exceeds the supply, that requires the grid operators to begin to curtail load. In this case, it happened for several days and because many other energy sources lost electricity, they were also unable to perform which made the problem even worse.”

During the storm, the demand for electricity reached a peak. ERCOT’s tweet mentioned it broke the previous record, set in Jan. 2018.

This peak demand caused the rolling blackouts. The state was four minutes and 37 seconds away from a complete blackout in the entire state.

McConnell explained that a system-wide grid outage would cause the entire state to go dark and the units to shut down and ultimately freeze because of the temperature. Thus, it would take much longer to get everything to run again, creating a catastrophic event.

Additionally, natural gas is a big source of power in Texas and natural gas power plants are not made to withstand the low temperatures that occurred during the winter storm. Because of this, natural gas production stopped, causing a failure in the power grid.

This kind of weather has led to issues before in Texas. In 2011, there was a similar event where severe weather conditions led to electric and gas outages, leading conversations about winterization.

“February 14 was just a confluence of the polar vortex needing a grid where there was no winterization, no investment in assuring that the grid could respond to cold weather,” said Ed Hirs, a University of Houston energy fellow. “No incentives in place and no penalties for not performing.”

Hirs also added that the crisis began with the design of the Texas electricity market. Rather than having regulated utility providers, Texas has deregulated utility providers. This means that energy prices stay low because different companies buy the energy they anticipate will be the demand.

McConnell mentioned that the design of the Texas electricity market model rewards electricity generators for producing and providing the lowest cost of electricity. Therefore when it comes to preparing, the electricity generators are not incentivized to anticipate disasters such as the winter storm.

Electricity bills

Once the winter storm was over, many saw an increase in electricity bills. These unexpectedly high bills came at a time after days where many did not have electricity.

Moving forward

As a result of the winter storm, ERCOT removed their CEO, Bill Magness. Moreover, there were several ERCOT resignations after many people mentioned that some board members do not live in Texas.

Gov. Greg Abbott has called on the Texas Legislature to mandate the winterization of power plants to prevent this from happening again. Abbott and members of the legislature also met to discuss the spike in electricity bills. 

Additionally, there is now a class-action lawsuit against the electricity provider Griddy for price gouging.

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