Texas, the go-it-alone state, is rattled by the failure to keep the lights on

In 1989, punishing cold weather that caused power failures across the state led to a federal study that spelled out how to avoid such a disaster in the future by winterizing equipment the way more northern power companies do.

In 2011, after Arctic weather caused a series of rolling blackouts, the Federal Energy Regulatory Commission (FERC) produced another report that warned Texas power companies and regulators again that they had to winterize their equipment. “The single largest problem during the cold weather event was the freezing of instrumentation and equipment,” it said.

That report, like the earlier one, was largely ignored.

“I am extremely frustrated that 10 years later our electric grid remains so ill-equipped for these weather events,” said the state comptroller, Glenn Hegar (R), who as a state legislator sponsored a bill a decade ago to prod the electric companies into preparing for winter. The bill passed but had little effect.

“We must address why, after 10 years have passed, are we in a worse position today than in 2011.”

The regulatory recriminations are coming after cold and snow that blew in over the weekend led to a much sharper spike in demand than the state’s electricity dispatching agency had anticipated, and at the same time the cold caused the equipment needed to run power generators to freeze up. One power plant after another went offline, and utilities had to “shed load,” or cut off customers, to keep the whole system from crashing.

More than 4 million households in Texas were without electricity on Tuesday. By Thursday afternoon, that number had dropped to about 420,000.

Damage and shock remained.

“Just horrible to see,” tweeted Dallas Mayor Eric Johnson, referring to a shelter for victims of domestic violence that had been half-wrecked by a burst pipe. Six years ago, as a Democratic state legislator, he sponsored a bill requiring state agencies, including the state’s Public Utility Commission, merely to report on their winterization efforts. It suffered a resounding defeat.

Political leaders in Texas prize what they see as the state’s self-reliance, its go-it-alone ethos, and its cheap power — all of which they regard as related. As the country and the world stand on the verge of a revolution in distribution of electricity, driven by artificial intelligence and the coming surge of electric vehicles, Texas is proud of having its own energy grid, with only minor connections to the rest of the country.

And they argue that the state’s aggressive deregulation of the grid — which some link to this week’s failures — has brought inexpensive electricity to the state’s residents and businesses.

Rick Perry, former Texas governor and former secretary of energy, a post that had him directing federal regulation for the rest of the United States, was quoted on House Minority Leader Kevin McCarthy’s website Wednesday as saying that a few days without power was better than submitting to Washington’s oversight.

“Texans would be without electricity for longer than three days to keep the federal government out of their business,” Perry said. “Try not to let whatever the crisis of the day is take your eye off of having a resilient grid that keeps America safe personally, economically, and strategically.”

But Perry’s viewpoint faced angry resistance among political opponents on Thursday.

“The power and water outages in Texas have created a situation that’s worse than even the early days of the pandemic,” tweeted Rep. Joaquin Castro, a Democrat from San Antonio.

“Grocery store, fast food and gasoline lines are longer than ever. … Many vulnerable people can’t eat because they can’t get electricity or water to cook and can’t get on the roads because of the dangerous conditions.”

The Electric Reliability Council of Texas (ERCOT) has been getting most of the criticism. It is the agency that oversees the distribution of electricity around the state, and critics say that it has done a poor job at keeping the public informed.

The revelation that a third of its board members live in other states — where the electricity has been flowing — has sparked outrage because ERCOT is viewed by many residents as a public body.

However others familiar with the practice said it helps ensure a diversity of opinion on the board.

“Any good chairman of a corporate board will find outsiders, will seek outsiders to join their boards that don’t see things in quite the same way as people within the company. There’s been a conscious effort over the decades to bring outsiders onto the board,” said Tom “Smitty” Smith, formerly director of the nonprofit group Public Citizen in Texas.

Gov. Greg Abbott (R) said ERCOT must be overhauled. He and his allies argued that the power problems were caused by frozen wind turbines, underscoring, they said, the need to rely on fossil fuel.

That contention has been widely derided by energy experts and Democratic officeholders, and even gently rebuked by ERCOT chairman Bill Magness. Most of the power loss is linked to generating plants that burn natural gas but have had to go offline because of frozen equipment or a lack of fuel.

Abbott’s allies also argue that in a state that is rarely visited by severe winter weather, it doesn’t make sense to spend a lot of money on preparations to beat the cold. Yet an analysis commissioned in 2013 by ERCOT came up with a startling conclusion when it wrestled with the question of what is called the value of lost load.

In other words, besides the misery and the deaths, how much money is lost to the state’s economy when the lights go off?

The answer, back then, was about $6,000 an hour for each megawatt that could have been delivered but wasn’t. That figure, and that report, attracted little attention. On Monday and Tuesday of this week, the state power companies were conservatively falling short by about 20,000 megawatts. That would be $120 million an hour, or $2.8 billion a day.

But Gregg Dixon, an expert in energy management and the CEO of a Massachusetts energy company called Voltus, argues that the evolving economy in Texas makes even that an understatement today.

“When the dust settles, these central U.S. power outages will likely prove to be the most costly power outages in human history, measured in dozens of lives lost and hundreds of billions of dollars,” he said in a note.

Not paying to winterize may have proved to be a costly mistake, he suggested.

The power failures that have hobbled Texas have prompted warnings that they are a harbinger of national disasters to come and dramatically illustrate the need to upgrade all of America’s electrical systems.

“One thing is certain,” tweeted Jennifer Granholm, President Biden’s choice to be secretary of energy. “America’s electricity grid is simply not able to handle extreme weather events. Whether it’s wildfires in California or snowstorms in Texas, we need to upgrade our grid infrastructure ASAP.”

More severe heat waves, intense flooding and other parts of the changing climate are expected to test the mettle of electricity generation across the country. Some climate scientists even say rapid changes in the Arctic may lead to more harsh winter storms like this one, leading some to ask whether power plants in places like Texas need to better prepare for ice and snow.

“That’s exactly the right question and there’s no single answer to that,” said Jesse Jenkins, an assistant professor and energy systems engineer at Princeton University.

Yet Texas stands alone in important ways.

“Texas has wanted to be more self-reliant,” said Karen Harbert, chief executive of the American Gas Association. “That provided them one benefit and now we’re seeing one big disadvantage. It has been able to keep energy prices very low compared to other highly regulated or integrated markets across the country. But it has not been able to reach into other markets and import energy when it has needed it.”

And that means that Dallas, for instance, which is closer to Wichita, Kansas and almost every place in Oklahoma than it is to Corpus Christi, has to look to that Gulf Coast city for extra power.

When bitterly cold weather barreled down the middle of America this weekend, there were scattered power outages in all the affected states. But only in Texas were millions plunged into a prolonged unheated, unlit stretch. Oklahoma had some rolling blackouts; by Wednesday, fewer than 2,500 households there were without power.

The roots of the state’s exceptionally poor performance go back to the 1930s, when Texas struck a deal with President Franklin D. Roosevelt to stay free of the jurisdiction of newly created federal regulatory bodies. But the causes of the system’s performance are also entwined with aggressive deregulation of the electricity sector, which began in 1999 with a bill signed by then-Gov. George W. Bush.

Today, five utilities link power to Texas households. They convey electricity from any of 70 providers, chosen by the customer. Those providers have a list of companies that generate electricity to choose from — on the state register, the list of those firms tops 500.

What all this competition has done, analysts say, is drive down prices. Before the cold snap, the wholesale cost of electricity was averaging about half that of the rest of the country, or less. That pleases consumers but it forces the generating companies to cut costs as much as they possibly can.

Other states factor a capacity-building component into their electric rates, to help prepare for future contingencies — but not Texas. Paying to winterize the equipment needed to keep power plants running has been one of the casualties.

So, unlike power plants in New England, Texas’s gas-fired generators have a harder time switching to other fuels when gas supply is tight. And unlike the wind turbines dotting Canada, those in the West Texas flats don’t have the equipment to readily thaw the ice that formed on crucial parts.

Even one of the state’s four nuclear reactors, often thought of as among the most reliable forms of energy generation, remained shut off Wednesday. Officials at the nuclear station, near the Gulf Coast midway between Houston and Corpus Christi, believe frozen instrumentation is to blame for the reactor tripping offline.

Some argue that deregulation is not itself the problem.

It’s the unusual weather and the inability to draw on power from the rest of the country in an emergency, said Ben Hood, a co-founder of an energy intelligence company called WattBuy.

“Despite what some have said, the main drivers of this still unfolding crisis are infrastructure that isn’t winterized, natural gas production forced offline by the weather and the state’s isolated electricity grid,” he said. “Deregulation is not the problem. Renewable energy is not the problem. And the Green New Deal, which is just a policy proposal at this point, is certainly not the problem. Understanding the real root causes is the only way to prevent this from happening again in the future.”

That’s an argument that has been heard before, because Texas has shown repeatedly that it is not immune to winter and state officials have shown just as often that they’re not keen to take action.

On Dec. 23, 1989, the temperature fell to 7 degrees in Houston and 6 in Austin.

Demand began to rise sharply, and as reserve power supplies were used up, ERCOT told utilities to “shed load,” or cut off customers, to keep the system from crashing.

But, as the follow-up report from FERC pointed out, “At the same time that demand was increasing, weather-related equipment malfunctions were causing generating units to trip off the line.”

All this was a harbinger of what was to come.

The Austin American-Statesman found a single, forgotten copy of that report on a Public Utilities Commission shelf in 2011.

The paper went looking for it in 2011 because of the cold snap that hit Texas in February of that year. ERCOT later acknowledged that 152 of the system’s 550 generating units went off line between Feb. 1 and Feb. 4.

The state legislature held angry hearings, and later that spring Hegar introduced his bill to require the Public Service Commission to prepare a weatherization and preparedness report each year, an obligation that was later neglected.

“What I don’t want,” Hegar said at the time, “is another storm and another report someone puts on the shelf for 21 years and nobody looks at.”

The answer to prevention is smart technology, for one thing, said Le Xie, an engineering professor at Texas A&M University. Batteries, hydrogen storage, data analytics. Electric cars, he said, will lead to “massively distributed demand,” and the power companies will have to figure out how to meet it.

General Motors recently announced that it will make only electric vehicles starting in 2035. Providing the power for Texas’s 20 million-plus cars and trucks, spread out over the entire state, will be a monumental challenge — especially in cold weather.

A colleague of Xie’s, Chanan Singh, said this week’s weather catastrophe should give some impetus to the idea that the state has to get serious about planning for a very different future.

Arelis R. Hernández in San Antonio contributed to this report.