ERCOT & The Big Freeze

This past week, Texas faced one of its’ most difficult storms that left us devoid of basic human necessities and wondering how it had come to this point. Almost overnight, it seemed like we had been returned to primal times without access to food, water, shelter, and especially heat. The management of the crisis left millions of Texans struggling and questioning how our energy sector is being managed.

A couple of decades ago, with the help of the then Governor George Bush and efforts from former Enron CEO Ken Lay, the Texas market for electricity was deregulated with the hopes of promoting better competition, but in actuality, lead to Texans almost losing power for potentially weeks after this past storm. The deregulation of the grid was pushed heavily by the providers of utilities and their largest contributors who wanted to be free from the larger government interference. By lowering the bills for more prominent companies, the utility companies were able to access more contracts and ultimately profit themselves which created a win-win situation.

But who paid on the backend? We did. The deregulated market was supposed to allow for reliable energy to be provided at a lower cost as there would be more players in the game to give greater options for consumers to pick from and create the best bundle for themselves (similar to picking a telephone provider). Unfortunately, residential customers since the early 2000’s were said to have paid upwards of $28 billion over how much they would have previously paid based on data reports from the federal Energy Information Administration.

This previous week showed just how unprepared we were for the changing climate and possible instances of extreme weather. The Texas Public Utility Commission concluded that power companies failed to pinpoint and identify their “critical failure points” which could cause equipment malfunction in colder weather. 7 years ago, the Texas Public Utility Commission pushed for alterations that would help identify these weaknesses and provide more protection against their possibility. The energy companies fought back and ultimately won the battle and were only slightly more regulated.

The Electric Reliability Council of Texas (ERCOT) manages the Texas power grid and reported that the grid at its worst point was around four and half minutes away from crashing completely for multiple weeks which would have dealt an even greater blow to Texas inhabitants. Power plants across the state were failing and the freezing of our pipelines, when combined with greater electricity usage due to the weather, meant the grid was close to overloading. Much closer than any of us were aware of. As a result, there were widespread blackouts that left millions to face subfreezing temperatures without the tools to do so. There were about 40 deaths in Texas and around 80 total when combining the surrounding southern areas which lead to 5 ERCOT board members resigning from their positions. The board’s inability to plan for the cold combined with the fact that many of them don’t even reside in Texas caused the 5 departures out of 16 total members.

The events that transpired in the past week showed the flaws in both Texas infrastructure and also in the way the deregulation was handled. By focusing on the benefits provided to larger companies, many people were put in dangerous situations where the cold posed an imminent threat. In the future, it’s important that we check these institutions and their intentions as the people should be the main focus over all others.

-Azaan Moledina