'We’ve just barely managed to keep the lights on this week': Rice University Professor on the Texas heat wave

Daniel Cohan, Rice University Civil and Environmental Engineering Associate Professor, joined Yahoo Finance Live to disucss the impact of the heat wave on Texas' power grid.

Video Transcript

ADAM SHAPIRO: But there are a lot of people that are sweating it out right now, not only out West. But as far as Nebraska, the record heat wave is driving temperatures to over 100 degrees. Let's talk about what's happening though, specifically in Texas, as we bring in Daniel Cohan, Rice University Associate Professor, civil and environmental engineering.

And Daniel, the heat wave, we know, is a problem. But in Texas, with your unique electric grid, we understand that ERCOT avoided a potential blackout situation in some areas because it's under stress. And then also, a lot of people in Texas may not realize it, but they're proud of payment programs that allow the utility to go in over the internet and raise their thermostats. I read a story about one family that woke up sweating because the utility had set that thermostat to 80 degrees. What's going on in Texas?

DANIEL COHAN: Yeah. So we've just barely managed to keep the lights on this week. It's been some very close days. ERCOT has been asking people to conserve power each afternoon from 3:00 to 7:00 PM. This day, today we're getting a little bit of a break with not quite as hot temperatures and the winds picking up a tiny bit, but still slow winds.

So we're seeing hot weather for June but certainly not nearly as hot as it could get in July and August. So still not close to as high as demand might get later on this summer. But it's really been--

The biggest problem is that there have been power plant outages three times the rate of what ERCOT anticipated. So still, much like we had in February, that the, quote, unquote, "firm and reliable sources," the gas, coal, and nuclear have not been performing as well as expected just at a time when the winds are very slow and demand is high.

SEANA SMITH: And Professor, we know that the state lawmakers just passed legislation last month, I believe, to address some of the issues that we saw creep up back in February during the winter storm. What more needs to be done though? Because I've read time and time again that, yes, it's a step in the right direction, but it's simply not enough.

DANIEL COHAN: Right. They didn't go nearly far enough to address the challenges here. Really, it was focused on weatherization of the gas and electricity supply, which is absolutely necessary. They did some steps on that, not enough. But they did virtually nothing to make demand more efficient or make it more flexible. And they did nothing to improve transmission, where we're dealing with bottlenecks and congestion in transmission within the state. And we still have this really foolish decision of not connecting our grid to other grids, which makes Texas have challenges and often have much higher prices than there are to our neighboring states, where we just can't buy and sell power across those state lines.

ADAM SHAPIRO: There was a great deal of fanfare within the last year about companies leaving places like California, the Northeast, going to Texas for all kinds of reasons. But if I'm a company looking at moving to Texas but I can't rely on the electricity-- and this is where you come in. You're, I mean, civil engineering, environmental engineering. What does Texas say to Tesla, for instance, if you can't rely on energy?

DANIEL COHAN: Right. Well, Tesla has chosen Texas in Austin. Canoo, I hear reported, just chose Oklahoma over Texas, in part because they decided they could not rely on the Texas electricity grid. The Texas grid has been a real roller coaster. And so if you're looking at what the prices are much of the year, they're, most of the year, very low sometimes, near zero when it's very windy in West Texas and mild temperatures.

So if you're a company that's able to handle being able to be flexible about when you use power and not need to operate 24/7, then it works out fine. You can avoid those times when we have risks of blackouts or when prices shoot up 50 or 100 times their normal levels. But if you're a company that needs to be able to operate reliably around the clock, we've been seeing problems in February, we've seen real strains this week, which doesn't bode well for what might happen in July and August.

So it's starting to be, what had been a competitive advantage for Texas is starting to be a liability in terms of hurting our ability to attract industry to the state.

SEANA SMITH: Professor, has it been like this in Texas in prior years, or is this by far the worst that it's been?

DANIEL COHAN: I mean, what we saw in February is really unprecedented. The amount of blackouts that we suffered was about 500 times as much in terms of people out of power and the hours out. It was about 500 times what California suffered last year with its record wildfires.

So the situation we had in February, with roughly 200 people probably died of hypothermia, carbon monoxide poisonings, essentially because of those blackouts was unprecedented. And this doesn't bode well now that, sure, it's warm but nowhere near as hot as it could get in July or August and showing that the grid isn't prepared and that a lot of our thermal power plants haven't been maintained adequately to be providing power reliably when we need it the most.

ADAM SHAPIRO: I realize this is a speculative question. But in your best assumption-- I mean, you are a civil and environmental engineering professor. Will you face blackouts in Texas in the next couple of weeks or later this summer?

DANIEL COHAN: I think there's a lot of risk of that in August, for sure if it keeps trending as a hotter and drier than usual summer. The forecasts are that demand could get up to about 80 gigawatts in an extreme situation. This week the grid barely was able to provide 70 gigawatts. So hopefully, it'll be windy. Hopefully, some of those power plants that failed us this week will come back online.

I think people shouldn't worry or people still experiencing PTSD if they went three days without power in February. I don't foresee anything that's going to be long-term outages. But I think there is a substantial risk that we're going to have one hour, two hours of rolling blackouts through some neighborhoods if we continue to see the problems.

If you had these sorts of problems we had this week, with the weather potentially 5 or 10 degrees hotter, as it's likely to be in August, that would really cause some problems.

ADAM SHAPIRO: We should remember our grandparents and their parents all lived without air conditioning so many years ago. And it wasn't that long ago, actually. Daniel, thank you so much for joining us. Daniel Cohan is Rice University Associate Professor of civil and environmental engineering.

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