Most people know the lowest bidder does not always provide the most reliable product.
Making sure a vendor can actually deliver the product also seems like common sense.
ERCOT, the Texas electric grid manager, though, does neither of those things because Republican politicians who have controlled state regulations for two decades have failed to heed 13 years of dire warnings.
Instead, they believed free-market advocates who argued financial incentives would encourage responsible planning.
The Texas Blackouts prove them wrong. Now our political leaders are giving us misleading scapegoating, political gamesmanship and another front in the culture wars.
People died because of this pitiful behavior, and our leaders need to turn down the volume and roll up their sleeves.
The solutions are easy and obvious. The present situation was first anticipated in a report in the Texas House Select Committee on Electric Generation Capacity and Environmental Effects Report published Jan. 12, 2009.
“We live during a time of great uncertainty about the future of the electric grid,” the committee, led by former House Speaker Dennis Bonnen, concluded. “The debate over electric generation should be primarily pragmatic, not idealistic.”
Texas has the only American electricity grid with no rules for resiliency. Instead, the GOP majority argued that a system that pays higher prices when demand goes up would incentivize generators to make sure their systems work during extreme weather.
Another polar vortex almost exactly 10 years ago triggered blackouts. Natural gas lines froze, coal piles froze like piles of ice. Wind turbine blades glazed over because operators had skimped on the cold-weather package.
The Legislature appointed another investigative committee in 2012 but ignored the advice to set resiliency standards. Instead, lawmakers concluded Texas electricity customers should pay generators even higher prices. The state Public Utility Commission raised the maximum payment per megawatt hour from $4,500 to $9,000 in a market that normally pays $25.
Mayor Sylvester Turner, who served on that House Committee, registered his doubts.
“I expressed my concerns to the PUC prior to its vote and asked the commissioners to state the impact on the costs to consumers,” Turner wrote.
The Texas Blackout proved that even $9,000 an hour was not enough to convince companies to weatherize properly. The generation companies that stayed online made a fortune last week, but 185 powerplants went offline and let two dozen people die.
Spending more on resiliency would hurt companies in the long run in the current market. The Electric Reliability Council of Texas buys the cheapest electricity first and then buys more expensive power until the state’s needs are met. Generators do not get paid to be resilient, only to produce cheaply.
All other grids are regulated by the Federal Energy Regulatory Commission, which requires weatherized pipelines and equipment. All other grids pay companies to build and maintain weatherized backup generators.
Texas lawmakers have debated following those best practices since they put ERCOT in charge of the wholesale electricity market in 1999. But the Texas GOP despises regulations, and generators prefer to pay out high profits to shareholders than invest in sturdier equipment.
To understand why ERCOT did not raise the alarm, look at who sits on the 13-member board. Nine currently work or have worked in the energy industry. One works for the City of Dallas and one represents industrial customers. Residential consumers have a single advocate appointed by a governor who is an unabashed advocate of the energy industry. One seat is empty.
Now that the system has catastrophically, Gov. Greg Abbott is demanding the heads of the people who did nothing more than follow the rules the Legislature imposed. He is going on national television, denouncing renewable energy even though it outperformed during the crisis.
Houston-area Rep. Dan Crenshaw is taking to Twitter to boost his friends in the fossil fuel industry and spread misinformation. The GOP is turning hatred for clean energy into another culture war cry and partisan talisman, even though it is the cheapest source of new, reliable generation.
Consumers need to watch closely as Texas authorities begin debating reforms. Lobbyists see an opportunity to gain subsidies for their industries.
The reforms we need, though, are simple. First, connect to the rest of the country to the national grid and accept federal regulation so we can import electricity when we run out.
Texas should also require generators to prove they are prepared for the weather events climate change will bring before they can offer their power to the wholesale market. That would reduce the risk of failure and force generators to weatherize.
Power prices will rise, ever so slightly, but it will reduce the risk of another Texas Blackout.
Tomlinson writes commentary about business, economics and politics.
twitter.com/cltomlinson
chris.tomlinson@chron.com
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Tomlinson: Texas electric grid is an easy fix, if lawmakers will admit their error - Houston Chronicle
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