A set of recent reports related to February’s “big freeze” in Texas point up the pressing need for policymakers to act decisively to mandate key fixes in the state’s power grid. The reports also provide support for innovative proposals for emergency power generating capacity, like the one suggested by Warren Buffett’s Berkshire Hathaway in March.
The first report, issued last week by the Houston Chronicle, finds that the actual number of Texas deaths directly attributable to the weather event and resulting power blackouts that impacted millions is almost double the official state tally. The Chronicle finds that almost 200 Texans died as a result of the freezing weather, ranking February’s freeze among the worst natural Texas natural disasters since the Great Galveston Hurricane killed 8,000 in 1900.
A second new report, from the Electric Reliability Council of Texas (ERCOT), the manager of the Texas electricity grid, finds that 54% of the power outages that led to massive blackouts during the arctic freeze were the result of “weather-related issues” at power plants. Contrary to the ongoing narrative being pushed by Texas power generators and many in the news media, the report further finds that just 12% of the outages were caused by a lack of fuel, such as natural gas.
“The fuel limitation number is less than what legislative testimony and press coverage led me to expect,” said Pat Wood, the former chairman of the Texas Public Utility Commission. “It looks to me the largest category is a (power) plant weatherization issue. That’s got to be addressed.”
It is key to note that the large percentage attributed to “weather-related” issues includes power-generating stations of all fuel types, including natural gas, coal, wind, solar and nuclear. From the ERCOT report: “Generator outages or derates explicitly attributed to cold weather conditions in the RFI responses. This includes but is not limited to frozen equipment— including frozen sensing lines, frozen water lines, and frozen valves—ice accumulation on wind turbine blades, ice/snow cover on solar panels, exceedances of low temperature limits for wind turbines, and flooded equipment due to ice/snow melt.”
As I’ve pointed out previously, it’s also key to note that a great deal of the issues surrounding the flow of natural gas is attributable to ERCOT’s own rolling blackouts, which cut off power to some pipeline compressor stations during the depths of the freeze. The simple fact of the matter is that natural gas pipelines and their compressors must have electric power service in order to supply natural gas to power plants to generate more electricity. Sort of a “chicken and egg” kind of deal – you can’t have one without the other.
Or maybe you can. Although it doesn’t currently happen in Texas, it is possible to store adequate quantities of natural gas at the sites of these big combined-cycle natural gas power plants. That’s an interesting aspect of the legislative proposal put forth by Berkshire Hathaway
To do this at existing natural gas plants would require the state’s power generators to invest billions in retrofitting, similar to the requirements of weatherizing their plants to withstand the freezing weather. But the power generators in Texas have avoided doing that since a similar freeze/blackout event in 2011, after which they were advised by both state and federal regulators to weatherize their facilities, but not required to do so.
The power generators responded to the Berkshire Hathaway proposal by accusing Berkshire of interfering in the Texas market with a plan that would send the wrong “signals” to the grid’s open-market system. The problem with that argument is that the open-market system has miserably failed to send the price signals necessary to encourage the building of new baseload generating capacity for well over a decade now. Texas added just 2,000 megawatts of new baseload generating capacity to an 80,000 megawatt market between 2010 and 2020, a time during which the state’s population grew by almost 20%. This is not a sustainable situation.
New polling data from the Baselice & Associates firm indicates strong public support for a plan like Berkshire Hathaway’s. The survey shows 68% of likely voters polled favor a plan to build additional reserve capacity in Texas, with 76% willing to pay slightly higher electricity bills to fund a plan that would make them less vulnerable during severe weather events. Berkshire estimates that a plan that would allow it to recoup a 9.3% rate of return on its initial investment would add roughly $3 per month to the average Texas utility bill.
It is amid all of this new and competing information that the Texas legislature is currently attempting to reach an agreement on a set of fixes to the state’s obviously flawed power grid. The Senate has passed one version of a bill that would implement strong requirements for power plant weatherization and ERCOT reforms. But the House is working on a set of half a dozen bills that do not contain similarly strong provisions.
As leaders in the two chambers work on ways to reconcile the two approaches into a compromise agreement they are receiving a constant barrage of messaging from lobbyists representing power generators, power providers, the natural gas industry and the wind and solar industries, all of whom are pressuring them to protect their own diverse sets of priorities.
It is unsurprising that power generators are pressuring the legislature to do nothing one more time to fix the grid. After all, various independent analyses indicate they profited to the tune of billions during the emergency, as ERCOT implemented emergency blackout pricing rates of as high as $9,000 per megawatt hour during the depths of the freeze. The current grid system works just fine for these companies – just not for the rest of Texans.
As a 20-year former veteran of the Texas energy lobby, I know there are a thousand ways to kill bills on major issues like those currently being considered, but only one way to get them passed. The one way to do that is through the sheer political will of the Speaker of the House, the Lieutenant Governor (who basically serves as the state’s Senate Majority Leader) and the Governor all working together to force it to happen.
The state’s biennial legislative session lasts just 140 days. As of this writing, 86 of those days have already been used up, with just 54 remaining to get something done to protect Texas citizens from the deadly consequences of losing electricity during the next major arctic freeze that will inevitably hit the state in the future. The time for real leadership is growing short.