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.
#ERCOT set a new winter peak demand record this evening, reaching 69,150 MW between 6 and 7 p.m. This is more than 3,200 MW higher than the previous winter peak set back in January 2018. Thanks to everyone who has been conserving today. We appreciate it! #conserve #saveenergy pic.twitter.com/eq56LLxcAS
— ERCOT (@ERCOT_ISO) February 15, 2021
Last week was bad, but learning today how much worse it could have been.
Per @ERCOT_ISO, it was 4 minutes 37 seconds away from a total collapse of TX power grid aka a statewide blackout.
Had it happened, ERCOT says it's likely TX would have been in the dark for weeks #khou11
— Marcelino Benito (@MarcelinoKHOU) February 24, 2021
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.
My electricity bill has arrived…$500 seriously? Why should we pay for electricity when we didn't even have any during the Texas Snowstorm…this is simply unfair! @Ron_Nirenberg @BetoORourke @GregAbbott_TX @ERCOT_ISO @cpsenergy @Judge_wolff
— Olivia (@livvymgodo) March 10, 2021
Updated Griddy bill! 1300 sq ft. Heat set at 60, no laundry, no running dishwasher, no stove/oven cooking, only used air fryer , lights off during the day candles at night most of the time , Tv on some. Some how they say I used 1772 khw. $5,000 @wfaa @FOX4 pic.twitter.com/r1eidadyur
— kat and tony (@katandtonyT) February 20, 2021
I kept getting questions about my electric bill from family and friends outside the state – would we have insane electric bills after the Blackout? I expected our electric bill to go up maybe $25. I was laughably wrong. https://t.co/2q7LTVkHRq
— Simon Mahan (@SimonMahan) March 9, 2021
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.
Just an FYI, five members of the ERCOT board of directors live out of state. the chair lives in Michigan and the vice chair is an economics prof in Cologne Germany. Experts, but not people affected by the failure.
— rgratcliffe (@rgratcliffe) February 16, 2021
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.
A woman is suing a Texas electricity provider after receiving a $9,500 bill.
The class action lawsuit alleges Griddy "engaged in deceptive acts" by price gouging during Texas's historic storm, which left 4+ million without power. Some customers received bills as high as $17,000. pic.twitter.com/Jltf8FSArI
— AJ+ (@ajplus) February 27, 2021