Opinion: Houston energy expert weighs in on if the state's power grid is ready for winter
The Winter Storm Uri, which struck Texas in February of 2021, was an unprecedented event in both severity and duration. At its most extreme, temperatures were as much as 40 to 50 degrees below their historic averages. The storm resulted in the largest controlled blackout in U.S. history, forcing the shedding of more than 23 gigawatts of load, the loss of power to 4.5 million homes and businesses for periods of one to four days, and the tragic loss of hundreds of lives.
A crisis of this magnitude has resulted in an intense re-examination of the Texas power grid. Not surprisingly, it has also resulted in record levels of finger-pointing and an ongoing search to identify the parties responsible. Among the casualties were all three Public Utility Commissioners that regulate the industry and a virtual purge of ERCOT, the organization that operates and manages the grid.
The Texas 87th Legislature filed an inordinate number of bills to address the electric system's failings, and Governor Abbott’s office has been vocal and actively working to ensure that there will never again be a repeat of the events of February 2021. The principal focus of the now reconstituted and expanded Public Utility Commission of Texas (PUCT) has been defining and implementing changes to system rules and operations in order to extract a greater degree of reliability from existing assets and incentivize the construction of significantly more MW of dispatchable generation. Many of the changes implemented by the PUCT will provide the market with a greater cushion against shocks to the system, moving the market away from a crisis management mode and towards a more proactive footing. We can expect even more change once current policies are assessed and more aggressive proposals are analyzed to determine whether they offer more benefit than harm to the market.
Amid all the debate, discussion, and wringing of hands, only one report has come close to identifying the smoking gun at the center of the crisis: the need for weatherization. The notion that weatherizing of generating assets is the key to future reliability has been discussed ad nauseum, but the report issued by the Federal Energy Regulatory Commission on November 16, 2021, attributes an equal share of the blame to the natural gas producing, processing, and transportation sector and its inability to perform reliably under the harsh conditions of Uri.
In the areas affected worst by the storm, gas production in Texas, Oklahoma, and Louisiana fell by more than 50 percent at its lowest point when compared to average production in the prior month. The Railroad Commission, not the Public Utility Commission, regulates natural gas transmission, and it was slow off the mark given the focus on generation. The Railroad Commission has now begun to implement weatherization requirements, with new initiatives slated to be in full effect for the winter of 2023.
It is imprudent to use “never” as a time scale, but I would place the probability at “remote” that Texas will see a recurrence of the events of February 2021 in 2022. In the unlikely event we did, the impacts would likely pale in comparison to those experienced last February. This is due both to the heightened state of preparedness with which the industry will approach the coming winter and the impact of changes put into effect by the PUCT as of January 1, 2022.
Governor Abbott has gone on record guaranteeing that the lights will stay on this winter, and I am inclined to agree. With the reinforcement of our fuel systems being mandated by the Railroad Commission, 2023 to 2025 should receive the same guarantee. Beyond that, as the demand for electricity in Texas continues to grow, we will need to rely on the initiatives under consideration by the PUCT to attract investment and innovation in new, dispatchable generation and flexible demand solutions to ensure long-term stability in the ERCOT market.
Don Whaley is president at OhmConnect Texas and has worked for over 40 years in the natural gas, electricity, and renewables industries, with specific experience in deregulated markets across the U.S. and Canada. He founded Direct Energy Texas and served as its president during the early years of deregulation.