Texas Power Outage: A Lack of Foresight And Poor Oversight
A photo of Dallas, Texas in the midst of severe power outages in February 2021. Credit: The Associated Press.
By Kesavan M. Srivilliputhur ‘23
Imagine Houston, fondly called the Energy Capital of the World, without power even for a fleeting moment. Something far worse happened in February 2021 when an unprecedented winter storm nearly crippled Texas’ electric grid, leaving my family and friends, and millions of fellow Texans including Houstonians, without power or potable water for several days. Rolling blackouts enveloped 75% of Texas because natural gas, coal, wind, and even nuclear power sources failed. During the peak of the 2021 crisis, nearly half of the generation capacity of Texas – about 45,000 megawatts (MW) – went offline. This loss of power capacity included 15,000 MW of wind and 30,000 MW of gas and coal, and coincided with surging demand for electricity to heat and power homes and businesses in the subfreezing weather. Even now, thousands of Texans are experiencing power outages following a series of powerful storms. Many of Texas’ leaders, including governor Greg Abbott, were quick to blame frozen wind turbines and solar panels, and renewable energy sources generally as being unreliable in the times of our greatest need.
However, the data unequivocally shows that it was the failure of natural gas power generation that bears primary responsibility. Companies neglected to adequately winterize power generators, and protect natural gas extraction and transmission equipment to enable their operation in extreme cold. Serious technological deficiencies led to rapid cascading of the outage through the state, resulting in loss of heating, causing water pipes to burst or lose pressure, forcing many nursing homes and hospitals to evacuate critically ill patients, and killing several dozen people. Because natural gas power plants don’t store large reserves of feedstock on site, this also meant that gas supply to some power plants were disrupted, causing their shutdown. These causes of failures were not unknown a priori. In fact, Texas policymakers and the energy industry blatantly ignored earlier experiences from winter storms of 1989 and 2011, and left energy infrastructure exposed and unprepared for the challenges of 2021. Despite numerous recommendations, the companies never voluntarily winterized their equipment or increased reserve levels because of the costs involved. Why would they, when the system skewed in their favor by ensuring the prices rose the most exactly when the demand for power was the greatest? There was no incentive to spend money on winterizing the equipment when they could make much more doing nothing.
Texas’s power outages also spring from systemic weaknesses in its long-standing policies of electricity independence. The United States has three main electric power transmission systems – the Eastern and Western grids, and the Texas grid run by the non-profit Electric Reliability Council of Texas (ERCOT) serving most of the state. Practically and operationally, Texas is largely isolated from the other two national grids. This helped ERCOT remain outside of federal oversight as highlighted in its mission document: “Federal Energy Regulatory Commission (FERC) does not have plenary jurisdiction over ERCOT because electric energy generated in the ERCOT Region is not transmitted in ‘interstate commerce,’ as defined by the [Federal Power Act], except for certain interconnections ordered by FERC that do not give rise to broader FERC jurisdiction.” This independence also created a regulatory framework that was weak in ensuring reliability of the grid, especially during adverse weather, and made it impossible for the state to import electricity from other states in times of acute needs. A political will to oversee and regulate the providers that are a rich source of campaign cash continues to be in short supply.
A third factor also conspired to exacerbate the power availability during extreme weather, when the demand was skyrocketing and supplies were short. ERCOT, unlike many regional transmission organizations, was kneecapped because it does not operate a market for conventional energy or trade in reserve power supplies. Such power reserve markets would pay generators to stand by to make up for energy shortfalls during emergencies. Instead, Texas bet on an aggressive daily energy market to supply just the amount of power it needed, refusing to pay for excess generation needed to tide over adverse weather days.
The cold wave of February 2021, much like a canary in the coal mine, vividly illustrates how severe weather stressed its power infrastructure to failure during times of peak demand. These lessons can help us harden our electric infrastructure against unpredictable extreme heat and polar vortex events. The timing for such a transformation is ripe now as it aligns well with President Biden’s ambitious “Build Back Better” plan for our infrastructure. However, just rebuilding the infrastructure or investing in new and secure technologies does not go far enough. We must also critically reexamine rules and policies that govern how power systems are operated, interconnected, regulated, weatherized, and secured to ensure their reliability. This cannot succeed without the Federal Government ending Texas’ isolation from the national electric grid and integrating it into the more rigorous federal policy framework for critical infrastructure security and resilience under the National Infrastructure Protection Plan (NIPP).
The NIPP currently provides only high-level guidance, not coercive demands, and encourages voluntary partnerships between companies and the U.S. Department of Energy to mitigate and manage risks in the critical energy sector. The 2013 NIPP premises that such partnerships will evolve because commercial interests need public goodwill to thrive and explicitly states, “Government can succeed in encouraging industry to go beyond what is in their commercial interest and invest in the national interest through active engagement in partnership efforts.” The Texas outage vividly demonstrates that voluntary partnerships, especially those in the context of infrastructural changes needed to confront climate change, will not be effective.
Electricity is a critical service and has evolved into a human right. The energy sector, therefore, now falls in the category of “Too big to fail” as many other infrastructures’ survival depends on it. Thus, our economic prosperity and security cannot be left to the mercy of voluntary compliance from energy sector companies or be regulated by weak entities like ERCOT that lack legislative mandate to enforce prudent behavior. President Biden’s push to rebuild infrastructure must also include serious conversations to rewrite the rules of engagement by providing economic incentives that reward companies investing smartly to enhance efficiency, reliability, and resilience, and also penalize those that don’t. There is a strong need for such federal intervention because, over the past 3 decades, the strong oil and gas lobby in Texas has failed to initiate meaningful improvements to our power sector by remedying its well-known deficiencies and failures. For far too long, in the name of energy independence, Texas has allowed foxes to guard the proverbial chicken pen. The current conversation on rebuilding the national infrastructure provides the most opportune time to break bad old ways and integrate Texas into the national power grid. It may be now or never.