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The first full week of assessment of Texas’ massive electricity failure has yielded two accomplishments: It spread the blame and deepened the sense of how big a disaster it was.
All-day House and Senate hearings Thursday and Friday have illustrated again the problems with the state’s power grid operator, the Electric Reliability Council of Texas. It took the most heat from lawmakers, but testimony demonstrated problems with every source of energy, the state’s regulatory agencies and the Legislature itself.
“Some of the blame belongs right here in this building on every floor,” said Rep. Charlie Geren, R-Fort Worth. “There’s blame out there for everybody.
The road map for preventing another such disaster is taking shape, too. Dozens of policy proposals will come, but the Legislature has three months to get the biggest priorities right. Here’s what should come first:
WINTERIZE NATURAL GAS INFRASTRUCTURE
Much of the lost power generation could have been prevented if more natural gas wells and plants hadn’t frozen up. As many have noted, the industry’s infrastructure is built for Texas summers, not an epic winter storm that blasted the entire state. Gov. Greg Abbott has declared winterization an emergency priority.
What he hasn’t said is how much it’ll cost. And it could be a lot. Experts told the Texas Tribune that building new facilities to withstand winter doesn’t add a significant cost, but retrofitting equipment designed for summer does.
“If you’re a prudent operator, you ought to weatherize,” Christi Craddick, chairwoman of the Texas Railroad Commission (which regulates oil and gas) told House committees Friday.
The Republican argued that providers’ ability to keep gas flowing and make money should be motivation enough. But so far, that’s obviously not been the case.
Abbott is asking the Legislature to do one of two things it’s always reluctant to do: Put expensive new requirements on the energy industry or approve billions in state dollars.
With the disaster fresh in mind, there’s plenty of momentum. But Abbott may have to help muscle through a specific plan. In the end, taxpayers will bear the cost, whether through state funding, higher prices or fees on electric bills or both.
Other power providers must take steps, too. Abbott has finally moved off his silly early-days comments that failure of wind and solar sources was mostly to blame. But it was certainly a factor, and treating wind turbine blades to keep them going is necessary.
FIX REGULATION OF ENERGY INDUSTRY
With more than a week to prepare for his grilling, ERCOT president and chief executive Bill Magness apparently couldn’t think of a single misstep he would change if he could.
“The operators on our team did everything they could have,” he told senators.
The moment crystalized the need for change in ERCOT’s leadership. The agency’s communication stumbles contributed to Texans’ feelings of helplessness in the storm. A failure to take accountability on top of that is inexcusable.
State oversight of ERCOT has been inadequate. DeAnn Walker, chairwoman of the Public Utilities Commission, apparently couldn’t even accurately describe her panel’s power over ERCOT. She admitted that her agency never filed reports on winterization progress, as the Legislature authorized in 2011. She did acknowledge that the PUC didn’t do enough to sound the alarm of a possible crisis with historically bad weather shaping up.
Legislators and governors have missed such warnings after every major winter storm for decades, too. The pattern has been sober-sounding reflection, a pledge to act, passage of half-measures, and zero follow-up. That can’t happen again.
ADDRESS VARIABLE PRICES FOR CONSUMERS
The saga of Griddy, the power provider that gives consumers access to wholesale prices, has gotten attention because of five-figure bills and a lawsuit. Those extreme circumstances highlight a problem that affects many more Texans, though: lack of understanding about variable rates.
Customers who for years paid a third of what most plans charge should have wondered about the downside. But average Texans shouldn’t have to be experts on energy markets. Variable-rate plans are dangerous, and even customers who sign up for a fixed rate may be susceptible to a quiet shift to a riskier plan when their contract expires.
The Legislature should consider barring such plans, or at least limiting them. At a minimum, they should order the PUC and providers to give customers a plain-English explanation of how a variable plan works and the risks involved. Good luck finding that on the state’s shopping site, Power to Choose.
STUDY DEREGULATION’S EFFECTS
Blaming deregulation is a simplistic, knee-jerk reaction to a complicated issue. And even if it made sense to unravel it, the Legislature shouldn’t do it in a rush.
Lawmakers should insist on a thorough examination of how it’s worked and whether the system might need to change. One important question is how to create incentives so power companies better maintain emergency capacity?
A Wall Street Journal analysis found that customers had paid $28 billion more than they would have from traditional utilities since deregulation began. A power company executive told the House committees that the report over-simplifies the market, especially changes in wholesale rates. But it’s time to drill down on how the system affects consumers.
Difficult choices and trade-offs lie ahead. The Legislature and voters must decide how much risk is worth bearing and how much we’re willing to spend to avoid another crisis.
It’s necessary to continue Texas’ economic strength. Much more importantly, though, is ensuring that Texas children aren’t at risk of dying of hypothermia in their own homes. As the debate on how to accomplish that rages, that imperative must be seared into our leaders’ minds.