Bob Sheak, Feb 24, 2021
Introduction
In this post, the topic is the winter storm that has afflicted Texas and led to widespread power outages and suffering. I consider evidence from various sources to document that the Republican control of the state government, the deregulated and “independent” electrical power system Republicans have created, and the power outages that led to disruption of water supplies, the widespread damage to residences and businesses, and the consequent displacement of residents, shortages of food and water, and even deaths, all result largely from Republican policies. The part played by climate change is ignored.
Despite the evidence, the Republican governor, legislators, and relevant officials opportunistically and hypocritically have made attempts to deflect blame of themselves to others – or to each other. In the meantime, their claims and pride of being allegedly “independent” of federal government influence is belied by their reliance on federal assistance to help deal with the crisis and the fact that, overall, Texas is one of the states that receives more from the federal government than the state sends to Washington.
#1 – What happened?
It is also worth noting that Texas is a “red” state in which the governor and state lawmakers have kowtowed to Trump, supported his big lie that the election was rigged and stolen from him, often abided by Trump’s claims that the Covid-19 pandemic was not that serious and climate change is a hoax and other such Trumpian/Republican blather. If there is hope out of this mess, it lies with Democratic Party lawmakers, committed and transparent public agencies, activists, community organizers, social movements, scientists, investigative journalists who want radical change in the state’s power system, who take into account and respond to rising climate change, and who want to advance a progressive agenda that addresses the needs and interests of majority of Texans.
According to Renuka Rayasam’s report for Politico, “More than 4 million people in Texas still had no power a full day [Monday, Feb. 15] after historic snowfall and single-digit temperatures created a surge of demand for electricity to warm up homes unaccustomed to such extreme lows, buckling the state’s power grid and causing widespread blackouts.” “It was,” she writes, “this energy grid that failed so catastrophically as people cranked up their heat while energy sources literally froze. The rest of the country experienced power outages too, but none as long-lasting or severe as in Texas—none that have turned into a humanitarian crisis. According to the operator of the Texas grid, the situation was so dire that the state avoided a months-long blackout by just a minute or two.” Then, Rayasam writes, “For six days, people living in the energy capital of the world have been without electricity in freezing cold temperatures. About 200,000 Texans are still without power [as of Feb. 19], but millions are now without water, too—with lowest-income households hit (https://www.politico.com/news/magazine/2021/02/19/how-a-winter-storm-tested-texas-go-it-alone-attitude-470202).
Sofia Sokolove and her colleagues at The Washington Post report on Feb. 19: “Millions of people across a storm-scarred South were bracing for one last night of extreme cold Friday [Feb. 19] following a devastating week in which dozens of people died, homes and businesses sustained billions of dollars in damage and basic services such as power and water catastrophically failed” (https://www.washingtonpost.com/national/texas-winter-storm-recovery). By this time [Feb. 20], the power had been restarted for many Texans, and power had returned for all but about 60,000 Texans as the storm moved east (https://www.nytimes.com/2021/02/20/us/texas-storm-electric-bills.html).
Still, residents were faced with the remaining destruction. Sokolove, et. al., report: “Across the region, homeowners who had fled frigid, energy-starved houses or apartments were returning after the lights finally switched back on. But once there, they discovered burst pipes, flooded floors, collapsed ceilings — and no water to drink.” Thus, “In Texas, the epicenter of the disaster, more than 14 million people in 160 counties were still experiencing water-service disruptions, with impacts also being felt in Mississippi, Louisiana, Tennessee and beyond.”
Sokolove, et. al., refer to examples of the problem. “Houston, the nation’s fourth-largest city, was under a boil-water advisory. In Austin, Texas’s capital, much of the city was without running water, and officials could not say Friday when it might return. Bottled water had been stripped from the shelves of minimarts and gas stations, and lines were wrapped around some supermarkets, which were imposing purchase limits as residents scrambled for food.
“In a sign of just how fundamental the needs are in Texas, the Federal Emergency Management Agency has sent blankets, bottled water and meals, in addition to 60 generators, to help the state power ‘critical infrastructure’ like hospitals. FEMA will also provide the state with diesel fuel ‘to ensure the continued availability of backup power,’ Jen Psaki, the White House press secretary, said at a briefing on Wednesday” [Feb. 17] (https://www.nytimes.com/2021/02/17/us/texas-winter-storm.html).
Drew Harwell, Brittney Martin, Marisa Iati and Kim Bellware report for The Washington Post that “[m]ore than 50 recent deaths have been linked to the bitterly cold weather and its aftermath, including from hypothermia, house fires and carbon-monoxide poisoning from people using cars or ovens to stay warm”
https://www.washingtonpost.com/2020/02/20/winter-storms-texas-weather-updates). They continue:
“In the Houston suburb of Sugar Land, Loan Le, 75, and her three grandchildren — ages 5, 8 and 11 — died in a house fire early Tuesday after using a fireplace to stay warm overnight while without power, city spokesman Douglas Adolph said.
“Even as temperatures warmed, the threat of ruptured pipes and dry water supplies threatened further strain. In Killeen, a fire at a fully occupied Hilton Garden Inn raged out of control after the hotel’s sprinkler system failed, officials said. No deaths were reported, and the cause of the blaze is still unknown.
“For many, the storm’s challenges are just beginning. Tabitha Charlton, 44, was playing Uno and trying to stay warm with her 7-year-old twins Tuesday when a pipe burst and covered her girls’ bedroom with soggy gray insulation.”
Harwell and his colleagues add :
- A Texas man rescued 500 people from icy roads Monday. ‘As fast as I was clearing cars out, people were pulling in and getting stuck,’ Ryan Sivley said.
- Hazardous winter conditions delayed the distribution of 6 million doses of coronavirus vaccines this week, the Biden administration said.
- Texas is clawing its way out of crisis mode as temperatures rise and the ice begins to thaw. Photographers captured the slick streets, grocery-store lines and water distribution events that partly defined the alarming week.
Amy Goodman and Denis Moynihan report on how Cities and towns across Texas are issuing boil notices as water treatment plants go offline (https://www.democracynow.org/2021/02/18/along_star_state_global_heating_plunges). “But,” they write, “many families can’t boil water without electricity. Stories are surfacing of people breaking apart furniture to burn for heat. “‘We are a failed state right now,” Professor Robert Bullard, known as the father of environmental justice. He said: “The impact of this storm is more than just power outages and inconveniences for those communities that historically have been impacted by energy insecurity and energy poverty.” And: “People are suffering right now and hurting with no power, no money, no water, no form of transportation to get to the grocery store to get water where there is no bottled water or food…the idea of Texas not being part of the union has really been a textbook example of how not to do it.”
Moreover, Goodman and Moynihan add:
“This is happening in the midst of the COVID-19 pandemic. People are flocking to crowded, indoor warming centers, risking possible exposure to the coronavirus in search of heat. Meanwhile, the already stressed vaccine distribution networks have been shut down, and vaccination centers shuttered. It is unclear how many doses of the refrigeration-dependent vaccines will have to be tossed out because of Texas’ failed independent power grid.
“Texas is also the nation’s biggest jailer, where prisoners are being especially hard hit. Lack of heat, running water, and food shortages are worsening already desperate conditions.
“Texas’ elected leaders, from Gov. Greg Abbot, U.S. Senators Ted Cruz and John Cornyn, to Attorney General Ken Paxton, all Republicans, are also all committed climate change deniers. As the thaw comes slowly to Texas, and the heat, lights and water turn back on, Texans will have to decide, to join the global community fighting human-caused climate disruption, or to insist on going it alone, come hell or high water.”
#2 – Problems in how the Republican Party organized the Texas grid
Ed Hirs, an energy economics lecturer at the University of Houston, considers why Texas has such a severe grid failure
(https://www.washingtonpost.com/opinions/2021/02/18/texans-grid-outage-deregulation). Here’s his overview.
“Texas’s predicament stems from a decision that state lawmakers made about 20 years ago to abandon the traditional model of fully regulated electricity utilities. Still used across many areas of the nation, these electric companies — described as vertically integrated utilities — do not compete for customers and are allowed to earn a rate of return on investment. They can raise rates only with the permission of state regulators.
“The deregulation of the California electricity grid in the 1990s generated profit opportunities by commoditizing electricity and creating trading regimes presented to voters as a way to lower electricity bills. The charge to ‘deregulate’ the larger Texas grid was led by the innovative energy trading firm Enron. Gov. George W. Bush (R), his successor Rick Perry (R) and the state legislature bought into the free market narrative. The state split apart the utilities. Only the transmission companies and local distribution companies remained fully regulated by the Public Utility Commission of Texas — there’s no real need for a dozen power lines to one’s home.
“The operation of the electrical grid was consigned to the Electric Reliability Council of Texas. It is a nonprofit consortium that operates the grid for about 85 percent of Texas. Understand, ERCOT has no ability to invest in generation or infrastructure. It acts only as the air traffic controller for electrons on the network. ERCOT is accountable to no one, but it reaps hundreds of millions in fees. Because it is contained within Texas, ERCOT is not subject to federal oversight.
“ERCOT created a system whereby generators, companies that own power plants, compete by bidding to provide electricity for the ‘day ahead’ and in real time during the day. It is called an ‘electricity only’ market. Think of it this way: If the players on the Washington Nationals were paid in the same fashion, only those players on the field for the game that day would earn a [prescribed] paycheck. Everyone else on the roster would be unpaid. Players would offer bids to play for the next day, each undercutting the other.
“Like the Nats in my example, the generators, to sell any of their power, often bid their power so low they don’t make a profit. Some generators, strapped for cash, began to defer maintenance. Others played an even smarter game by closing power plants or not building new capacity to serve the growing population of Texas. As demand inexorably increased, they could look forward to charging more for their electricity because there was less of it. Really, not much different than what Enron did in the California electricity market in 2000-2001. Except that market manipulation was illegal in California, but not in Texas, thanks to ERCOT. It was destined to come crashing down, and the polar vortex of 2021 was the assault that finally broke the Texas grid.
“The blame game has some pointing to frozen wind turbines as the cause of the blackouts. But the real problem in Texas is that generators have no financial incentive to invest in their own assets and keep them ready for winter, because the less stable they are, the more money they charge for their power.” https://www.washingtonpost.com/opinions/2021/02/18/texans-grid-outage-deregulation
#3 – Systemic changes are needed
Following from this misguided-laden history, Hirs draws a reasonable conclusion, namely: “Resolving Texas’s energy debacle requires major structural changes. An expedient solution is to create a capacity market similar to those in other states wherein generators would be compensated to keep their equipment ready. A second option is to return to a vertically integrated market that is focused on reliability such that power is available every day and the utilities earn a guaranteed return on investment for building out capacity that may only be required a few days a year when demand peaks.” The first option runs against the neoliberal ideology that prevails in the higher circles of Texas and that emphasizes maximum freedom for utility and fossil-fuel corporations. The second option conflicts with the Texas state goal of having and wanting a highly deregulated energy system that promotes competition in the electricity sector.
Robinson Meyer contends that the collapse of the Texas electrical grid occurred because the system lacks a plan and depends on unregulated market forces to provide supply of power in response to demand. He writes: “the Texas government assumed that high prices alone could guarantee grid reliability and incentivize power plants to prepare for the worst. This didn’t happen” (https://www.theatlantic.com/technology/archive/2021/02/21/what-went-wrong-texas/618104
Thus, contrary to the prevailing market-based ideology of the government, the Texas electrical power system needs more government regulation, not less. That is, if widespread outages, underinvestment in grid integrity, chaotic pricing for consumers, and devastating and costly ripple effects through the state are to be avoided. Additionally, Texas should take steps to connect the state grid to one of the larger electrical grids outside the state. This would enhance the state’s ability to address unexpected surges in demand.
And, in the best of all worlds, though unlikely in Texas’s right-wing political situation, Texas officials would acknowledge the reality of “climate change” and spend a lot more on increasing the state’s wind and solar resources than it has, while phasing out its dependence on natural gas and coal. No such changes are likely as long as Republicans dominate the Texas state government.
The New York Times editorial board echoes this view and draws two lessons from the Texas fiasco (https://www.nytimes.com/2021/02/19/opinion/texas-power-energy.html).
First, they agree that Texas decisionmakers must take into account and plan for climate change. The board refers to a recent article by Princeton energy expert Jesse Jenkins who “observes in a recent Times Op-Ed, we know that climate change increases the frequency of extreme heat waves, droughts, wildfires, heavy rains and coastal flooding. We also know the damage these events can cause. To this list we should now add deep freezes.”
And with that knowledge, Texas must, second, build “resilience into the power system,” one that reduces greenhouse emissions. The board cites as an example President Biden’s “lofty goal,” which is “to achieve net zero greenhouse gas emissions by midcentury and to eliminate fossil fuel emissions from the power sector by 2035. In the simplest terms, this will mean electrifying everything in sight: a huge increase in battery-powered cars and in charging stations to serve them; a big jump in the number of homes and buildings heated by electric heat pumps instead of oil and gas; and, crucially, a grid that delivers all this electricity from clean energy sources like wind and solar.”
Now, given the present configuration of forces in Texas, there is little chance that the Republican governor or legislature will take climate change at all seriously, let alone act in ways that reflect the kind of energy plan that Biden has proposed. However, if Biden is able to advance his plan in the U.S. Congress, it has the chance of becoming national policy. And, if that should happen, then there would be possible funding incentives for Texas to move more toward renewable energy and related changes. This would become more likely if Texas Democrats would win more state-wide elections than they have.
In an article published in the Texas Climate News, Randy Lee Loftis posits that “Texas faces both a fragile electric grid, still driven mostly by fossil fuels despite renewable energy gains, and the certainty of human-induced climate disruptions caused mostly by the worldwide use of those same fossil fuels.” Any attempt to strengthen the Texas energy grid must ramp up “efforts to address climate change and, in a bigger sense, begins rethinking how we produce, use, and even imagine energy” (https://texasclimatenews.org/features/how-texas-froze-neglect-of-power-grid-and-climate-change-warnings-off-the-stage). There are changes that may eventually change the climate avoidance energy policies in Texas. Loftis points to “news at odds with Texas’ official attitudes toward climate change and fossil fuels seems to be breaking worldwide” and gives the following examples.
“Volkswagen, General Motors, and Ford have all announced, by differing degrees, the approaching end of gasoline-powered autos. President Joe Biden has vowed to tackle climate change at home, repair ailing infrastructure to make it more tough and reliable, and place climate as Abbott called Biden’s energy plans ‘a hostile attack’ on Texas and promised to sue.” The question then is whether the political forces in Texas will change enough to remove right-wing politicians from office and elect lawmakers who understand what climate scientists are telling us and are committed to transforming the way Texans generates and uses energy.
#4 – Republican responses
One, better a devastating storm than an independent grid
As noted, most of Texas’ power generation and distribution comes from an independent electrical grid that has no connection to grids outside the state. As Rayasam puts it, Texas has “a standalone grid, and no access to power plants elsewhere [so that] Texas couldn’t draw power from other states and was forced to switch off power for whole swaths of the state to prevent permanent damage to the grid” (https://www.politico.com/news/magazine/2021/02/19/how-a-winter-storm-tested-texas-go-it-alone-attitude-470202). She continues:
“Texans have long seen this independence as a point of pride. Texas’ independent grid was created a century ago in the image that Texans have of themselves: standalone, free from federal oversight and largely deregulated. But this week’s blackout has come as a rebuke to that idea—or, at least, highlighted the limits of Texas as a brash, go-it-alone state, big enough not to have to rely on the rest of America.”
But the situation is different in El Paso, where Rayasam lives. “Here, the lights were on, and that was how I learned that my new hometown, El Paso, is not just in a different time zone from the rest of Texas—it’s also on a different power grid. The winter storm hit this border town, too. But even as demand surged, there were sources to help fill the need, and the outages were relatively minor…. El Paso’s power lines are attached to the Western grid, which connects 14 states and parts of Canada and Mexico. The rest of Texas, however, is on its own grid—making it the only state that tries to manage its power independent from the rest of the United States.” Thus, when she woke up on Monday, “snow was still on the ground and the weather was still below freezing, but our heater worked, our pipes hadn’t burst, and there was no need for disaster planning.”
Two, they don’t learn from previous experiences
Rayasam reminds us that, “[a]fter a major winter storm knocked out power in Texas almost exactly a decade ago, federal regulators called on the state to fortify its grid against deep freezes. But the federal government had no authority to mandate such measures.” Pat Wood III, CEO of Dallas-based Hunt Energy Network and a former Texas and federal energy regulator, says this is typical of the Texas’ approach to federal oversight. Even though the federal intervention was ‘relatively benign,’ Texas still didn’t want to deal with it. “I just threw my hands up in the air,” he says ((https://www.politico.com/news/magazine/2021/02/19/how-a-winter-storm-tested-texas-go-it-alone-attitude-470202).
Three, blame renewables
Politifact fact-checked the claim by Texas Republicans that wind power causes the blackouts. (https://www.politifact.com/article/2021/feb/18/fact-checking-texas-republicans-blackout-blame). It’s true that “Wind energy has been Texas’ fastest growing energy source over the last decade. Last year, wind supplied 23% of Texas energy demand and overtook coal as the state’s second largest resource after natural gas, which supplied 46% last year.” And it’s true that by “Sunday afternoon, the Electric Reliability Council of Texas, which manages the state-wide grid, was reporting that about half of Texas’ 24,000 megawatts of installed wind capacity was frozen.”
The Texas Public Policy Foundation, a right-wing think tank, maintained: “The blackouts “never would have been an issue had our grid not been so deeply penetrated by renewable energy sources that contribute the least when you need them the most, yet are propped up by billions in taxpayer-funded subsidies every year.” “…U.S. Rep. Dan Crenshaw, R-Houston, tweeted a thread that claimed to reveal ‘the truth about what happened,’ and his criticisms were along similar lines — wind energy is too feeble to withstand extreme weather yet has been over-subsidized by the federal government.” The problem, Crenshaw says, is that subsidized investment in wind “has pushed gas and nuclear out.” Then “Gov. Greg Abbott jumped on the bandwagon during a Tuesday evening Fox News appearance, where he said the failure of wind energy demonstrates how the Green New Deal would be ‘a deadly deal for America.’” Abbott said on Hannity: “‘Our wind and our solar got shut down … and that thrust Texas into this situation where it was lacking power at a statewide basis” The governor went on: “As a result, it just shows that fossil fuels are necessary for the state of Texas as well as other states to make sure that we’re able to heat our homes in the wintertime and cool our homes in the summertime.”
These claims are contradicted by the fact that, while a growing proportion of Texas’s electricity comes from wind sources, the largest source by far is natural gas, with coal and nuclear making up some of the rest. All sources of electricity were negatively impacted by the winter storm. Politifact points out: “…the Electric Reliability Council of Texas has been reporting throughout this energy crisis — that blackouts were caused as electric plants of all energy sources ‘began tripping offline in rapid succession.’ Then, “On Tuesday [Feb 16], as blackouts dragged on for a second day, Electric Reliability Council of Texas CEO Bill Magness said that the energy deficit was mostly due to impacted gas plants.” Magness continued: “‘It appears that a lot of the generation that has gone offline today has been primarily due to issues on the natural gas system at large.” And: “From getting the gas from the wellheads, through the pipes to generators and to consumers for heating natural gas. That really seems to be a lot of the issues from the plant that we’re seeing become unavailable during the day today.’”
PolitiFact looked at the numbers and established that on Tuesday, “45,000 megawatts were offline due to a variety of reasons. Of that amount, around 29,000 of those lost megawatts were attributable to thermal generators, or non-renewable energy sources.” The remaining 16,000 megawatts were due to installed wind resources in West Texas.” The fact-checking organization quotes said Josh Rhodes, a University of Texas research associate at the Energy Institute, who said: “A third of our thermal plants were offline. It’d be fair to say that wind has underperformed, but it’s not alone in having done that.”
The upshot: “The amount of wind energy that could have been produced from the frozen turbines was sorely needed, but it’s misleading to say that blackouts ‘never would have been an issue had our grid not been so deeply penetrated by renewable energy sources,’ as the Texas Public Policy Foundation claimed. Abbott’s comment on Hannity’s show placing blame for the outages on wind and solar energy production runs along the same lines and is equally misleading.” Politifact puts it this way: “Indeed, the largest energy deficit came from the state’s gas plants. While freezing temperatures impact wind energy by freezing up turbine blades, natural gas plants are impacted in a multitude of ways. Gas wells can freeze up. Uninsulated pipelines can cause certain gasses with heavy carbon chains to liquify. A gas, coal or nuclear plant’s water intake or outtake pipes can freeze.”
Four, blame ERCOT (Electric Reliability Council of Texas)
Renuka Rayasam’s report for Politico is informative. Among other misleading claims, “Republican Governor Greg Abbott blamed the grid’s managers—an independent nonprofit called the Electric Reliability Council of Texas, or ERCOT—calling on Wednesday for the council’s leadership to resign. He and other Republican leaders here also pointed to the state’s frozen wind turbines and condemned the rise of clean energy—going as far as to target the Green New Deal, even though it’s a proposal, not federal law. (While the frozen turbines were a factor, natural gas wells, oil pipelines and coal-burning plants still dominate the Texas grid, and they froze, too.)” Rayasam “asked Abbott’s office if the governor planned to take any other action after this week [and] a representative pointed to statements Abbott already had made calling for ERCOT’s leadership to resign and declaring ERCOT reform an ‘emergency item’ in the current legislative session” (https://www.politico.com/news/magazine/2021/02/19/how-a-winter-storm-tested-texas-go-it-alone-attitude-470202).
“As politicians call for investigations and committee hearings—with ERCOT as the focal point—energy experts say the council’s leaders are being used as a scapegoat. ERCOT, which runs as a nonprofit with a board of directors, is overseen by the state Legislature and the state’s Public Utility Commission, whose members the governor appoints; all three of the commission’s current members are Abbott appointees. An investigation might turn up more details, and possibly some serious failures on ERCOT’s part, but it is state executives who ultimately make the decisions about the Texas energy grid.”
Rayasam continues. “Texas took control of its grid in the 1930s after the Federal Power Act was passed to regulate interstate electricity sales. ERCOT was created in 1970 and took on more responsibility for managing the Texas grid over the following decades. The current structure of Texas’ energy system has its roots in the mid-1990s, when the state government moved to deregulate the energy market here. ERCOT at that point became the country’s first independent service operator. According to both Sullivan and Wood [energy experts], Republicans and Democrats agreed back then on restructuring the state’s power industry and breaking up utility monopolies in an effort to make the market more competitive.
Quoting Wood again: “It didn’t get that partisan. Everybody agreed wholesale competition made sense.” A 1995 law required the state to study connecting the Texas grid to the rest of the country, but the resulting report recommended against it so the state could maintain access to cheaper power, according to Wood.
“A series of reforms over the next few legislative sessions in the late 1990s and early 2000s—the regular session lasts only 140 days every other year—focused on keeping energy costs low, especially for industrial customers, and bringing in new power companies. The reforms helped to usher in new technology, like wind and solar energy, while helping to meet demand for the state’s burgeoning population—and keeping prices low.
“ERCOT’s role was and is essentially as the intermediary, mostly acting as a broker between energy buyers and sellers. It was never tasked with deciding on the state’s overarching approach to energy policy; it just carries it out. While ERCOT does have to make sure the grid is reliable, it can’t force changes such as infrastructure upgrades.
“The trade-off that Texas lawmakers and regulators have made over the years, says Michael Webber, an energy resources professor at the University of Texas at Austin, is focusing on cost over reliability. Some states like Georgia require operators to maintain energy reserves almost double what Texas requires. This costs energy companies more money, but it also ensures that a grid is more reliable. Treating turbines, natural gas wells, coal plants and nuclear plants so that they can withstand winter weather also costs money. The state government in Texas, which has no state income tax, has avoided budgeting funds to prepare the grid for winter, knowing that customers would have faced higher bills.”
Five, avoid talking about how the Public Utility Commission of Texas has authority over ERCOT
Sofia Sokolove and her colleagues point out the Public Utility Commission of Texas has authority over ERCOT, noting that “Abbott, Texas’s governor, has consistently blamed the state’s electric grid operator, the Electric Reliability Council of Texas (ERCOT), for a lack of preparation and has called on its leadership to resign https://www.washingtonpost.com/national/texas-winter-storm-recovery).
But, they report, ERCOT “had little control over the power suppliers and could not force them to better prepare for extreme cold.” They quote ERCOT’s chief executive, Bill Magness, who said in a video call with journalists, “We don’t own the generation units. We don’t own the transmission. It’s not really our role to do winterization.” Rather, “it is up to the Public Utility Commission of Texas — which oversees ERCOT — to mandate that suppliers better prepare for extreme cold and penalize those that choose not to do so.”
Six, Belatedly, Governor Abbott asks state legislature for funds to winterize grid
On Thursday, Feb. 18, Abbott directed the state legislature to find funding for the “winterization” of the Texas power system. Erin Douglas reports: “The North American Electric Reliability Corporation, which has some authority to regulate power generators in the U.S., is also developing mandatory standards for “winterizing” energy infrastructure, a spokesperson said….During a Friday press conference, Bill Magness, president and CEO of ERCOT, called Abbott’s emergency legislative item to winterize power plants ‘a good idea,’ and said ERCOT would implement any changes the Legislature directed them to make” https://www.kxxv.com/hometown/texas/gov-greg-abbott-wants-power-companies-to-winterize-texas-track-record-wont-make-that-easy). It will up to the Republican-dominated state legislature to decide on whether to subsidize any large-scale weatherization project, a kind of corporate welfare and who will pay for it.
The power companies are unlikely to pay for weatherization
Douglas cites Jim Krane, an energy fellow at Rice University’s Baker Institute, [who] has an idea on where to begin: “‘The natural gas transmission system would be my first choice as a place to look,’ he said, noting that the majority of the state’s grid in the winter relies on the resource.” The companies that produce and distribute natural gas are “not built for the low temperatures,” according to Michael Webber, an energy resources professor at the University of Texas at Austin. Nonetheless, Webber thinks they can be winterized along with other parts of the state’s energy system, but it needs to be “flexible – temporarily enclosed in a structure to keep heat in during the winter and removed to keep the plant cool during the summer.” Webber “acknowledges it will come at a cost, but, he said, ‘it means you can operate when times are tough.’” That’s the rub. The natural gas companies are organized to maximize profits and are little inclined to pay for any winterization of their facilities and pipelines out of their own budgets. Douglas refers to experts who says that, for any upgrade or retrofitting, “whether natural gas, wind, coal, or nuclear — winterization is going to be expensive due to the lack of investment the state’s generators and producers of energy have made into preparing for a storm like this in the past.”
Seven, be unabashedly hypocritical – and welcome federal aid
Another point from Rayasam’s richly documented article captures the hypocrisy of Texas Republican leaders. She writes: “Even at the height of the crisis this week, Rick Perry said Texans would rather go without power for days than deal with federal energy regulations. Never mind that Texas readily accepts federal help when disaster strikes: So far this week, Abbott has made at least two official requests to the White House for federal aid.” (https://www.politico.com/news/magazine/2021/02/19/how-a-winter-storm-tested-texas-go-it-alone-attitude-470202).
By the way, let it be noted that Texas is one of the states, one of the many “red” states, that gets back more money from the federal government than they transfer to Washington (https://theconversation.com/blue-state-bailouts-some-states-like-new-york-send-billions-more-to-federal-government-than-they-get-back-137950). According to this source relying on data for 2018, Texas got $13.51 billion back from the federal government that year than the state sent to it.
#5 – Who will pay under the present political regime in Texas?
Individual residents
Unless Gov. Greg Abbott and Texas’ lawmakers act, individuals in the state who did not lose electricity during the winter storm are face with extraordinarily high utility bills. Giulia McDonnell Nieto del Rio and her colleagues at The New York Times document this situation (https://www.nytimes.com/2021/02/20/us/texas-storm-electric-bills.html). Here is an example the reporters highlight.
“‘My savings is gone,’ said Scott Willoughby, a 63-year-old Army veteran who lives on Social Security payments in a Dallas suburb. He said he had nearly emptied his savings account so that he would be able to pay the $16,752 electric bill charged to his credit card — 70 times what he usually pays for all of his utilities combined. ‘There’s nothing I can do about it, but it’s broken me.’
Mr. Willoughby is not alone. He is “among scores of Texans who have reported skyrocketing electric bills as the price of keeping lights on and refrigerators humming shot upward. For customers whose electricity prices are not fixed and are instead tied to the fluctuating wholesale price, the spikes have been astronomical.”
The underlying problem is systemic, namely that residents are asked to choose their power supplier in an unregulated market from among “about 220 retailers in an entirely market-driven system” and are apt to be confused about the terms of a given contract. The reporters elucidate this point: “Under some of the plans, when demand increases, prices rise. The goal, architects of the system say, is to balance the market by encouraging consumers to reduce their usage and power suppliers to create more electricity.” But that’s a theoretical supposition. When the unanticipated winter storm struck Texas, “the state’s Public Utilities Commission ordered that the price cap be raised to its maximum limit of $9 per kilowatt-hour, easily pushing many customers’ daily electric costs above $100. And in some cases, like Mr. Willoughby’s, bills rose by more than 50 times the normal cost.”
They give the example of the customers of Griddy, “a small company in Houston that provides electricity at wholesale prices, which can quickly change based on supply and demand.” Here’s how it works when prices for electricity go up. “The company passes the wholesale price directly to customers, charging an additional $9.99 monthly fee. Much of the time, the rate is considered affordable. But the model can be risky: Last week, foreseeing a huge jump in wholesale prices, the company encouraged all of its customers — about 29,000 people — to switch to another provider when the storm arrived. But many were unable to do so.” Customers often did have enough time during this crisis to arrange for a switch in their electricity provider. Here’s one example.
“Katrina Tanner, a Griddy customer who lives in Nevada, Texas, said she had been charged $6,200 already this month, more than five times what she paid in all of 2020. She began using Griddy at a friend’s suggestion a couple of years ago and was pleased at the time with how simple it was to sign up.
“As the storm rolled through during the past week, however, she kept opening the company’s app on her phone and seeing her bill ‘just rising, rising, rising,’ Ms. Tanner said. Griddy was able to take the money she owed directly from her bank account, and she now has just $200 left. She suspects that she was only able to keep that much because her bank stopped Griddy from taking more.
The natural gas companies won’t pay
Sharon Zhang reports on how billionaire Dallas Cowboys owner and oil and natural gas man Jerry Jones is cashing in on the Texas blackout crisis (https://truthout.org/articles/billionaire-dollars-cowboys-owner-and-oil-man-cashes-in-on-texas-blackout-crisis). Jones owns Comstock Resources, Inc., a natural gas company. As a result of the winter storm, Zhang writes: “[d]emand for what little natural gas the state can access has soared amid the crisis as millions have gone without power this week, and consequently, wholesale gas prices have gone up nearly 300-fold. This week, some residents in Texas reported getting hit with massive electricity bills — one man’s bill shot up to over $8,000 in the course of two days — while they navigate power outages, food shortages and boil-water advisories.”
But things were a lot different for Jones and other natural gas owners. In a call to investors, Jones told them: “Obviously, this week is like hitting the jackpot with some of these incredible prices…. Frankly, we were able to sell at super premium prices for a material amount of production.” Zhang adds: “The company could be selling their product at anywhere from six to 74 times what they were selling for on average last quarter, according to figures reported by NPR, the CFO (corporate financial officer] said on the call. Meanwhile, investors were evidently pleased with the news, as the company’s stock shot up about 12 percent in the days surrounding February 17, the day of the call.”
Regressive tax system – the rich pay less
Jim Probasco documents this point (https://www.investopedia.com/financial-edge/0210/7-states-with-no-income-tax.aspx). He writes: “As of 2021, seven states — Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming — levy no state income tax.” In overall taxes, Texas ranks the 19th lowest, with most of the state taxes come from sales and excise taxes to pay the bills. At the same time, property taxes in Texas are higher than in most states. The result is Texas is one of the most income unequal states and this is reflected in how relatively little on the state spends on education (sixth lowest out of 17 southern states), and “receiving a D grade for its school funding distribution in 2015.” Probasco adds: “In 2017, the American Society of Civil Engineers awarded it a marginally higher grade of C- for its infrastructure.32 Texas spent $6,998 per capita on healthcare in 2014, the seventh-lowest amount in the U.S.12” The Center on Budget and Policy Priorities also documents how income inequality has risen in Texas (https://www.cbpp.org/sites/default/files/atoms/files/Texas.pdf).
With respect to the current winter-storm crisis, this suggests that Texas will spend little to assist those who have been affected by the crisis.
Insurance companies
“With a long recovery ahead, the focus was rapidly shifting to who would pay. The Insurance Council of Texas, an organization that represents the state’s home, auto, renters and business insurance agents, said the storm would be the “largest insurance claim event in [Texas] history,” with hundreds of thousands of claims expected.
“We are used to our storms in Texas with tornadoes, hurricanes and hail,” said Camille Garcia, communications director for the council. “But those hit smaller areas. This winter event reached every part of Texas.”Sokolove and her colleagues report:
“The exact scale of the damage was still becoming clear on Friday. Karen Clark, co-founder and chief executive of Karen Clark and Company, a catastrophe modeling firm, said the bout of winter weather could cost $18 billion in insured losses, with the total economic damage likely to be higher. The damage was spread across 20 states, though most was in Texas” (https://www.washingtonpost.com/national/texas-winter-storm-recovery).
The Federal government (taxpayers) pay, despite the Republicans’ much lauded desire for “independence”
Ella Nilsen reports for VOX on President Joe Biden’s approval of a major disaster declaration for Texas (https://www.voc.com/2021/02/19/22291432/biden-major-disaster-declaration-texas-fema-storm). Nilsen points out that a “federal emergency declaration is helpful to states, but the total amount of federal assistance it brings is capped at $5 million.” She adds: “The president signing a major emergency declaration expands the type of assistance the federal government can provide to states suffering through the effects of a natural disaster. It authorizes assistance both to individuals impacted, and to state and local governments for emergency work and repairing damaged facilities. It also unlocks hazard mitigation assistance, getting additional funding to states, municipalities, and nonprofits working to save the lives and property of impacted residents.”
There is also additional disaster relief money in the U.S. House Democrats Covid-19 relief bill, calling for $50 billion for FEMA. Nilsen reports: “Speaking to reporters on Thursday, one White House official noted that due to the Covid-19 pandemic, FEMA teams have already been embedded with state emergency officials in Texas and other states.” And: “‘There’s a great deal of familiarity among the people involved in needing to work these issues now because they’ve been working together quite a while on Covid response,’ Homeland Security adviser Liz Sherwood-Randall told reporters on Thursday, adding that existing coordination has been helpful during this natural disaster.” Indeed: “As of Thursday, Sherwood-Randall said, FEMA had provided 60 power generators and additional fuel support to facilities like hospitals, nursing homes, and water treatment plants. The federal agency is also providing 60,000 wool and cotton blankets, 225,000 meals, and other supplies after they were requested by Abbott, she said.”
Concluding thoughts
The winter storm was more destructive than it needed to have been. The responsibility for the extensive damage lies in the hands of Texas lawmakers who have created an unregulated electrical system based on a standalone power grid, who are devoted to keeping the system dependent on fossil fuels (along with nuclear power), and who deny the steadily increasing impacts of climate change. It’s worth repeating what I wrote in the Introduction: If there is hope out of this mess, it lies with Democratic Party lawmakers, committed and transparent public agencies, activists, community organizers, social movements, scientists, investigative journalists who want radical change in the state’s power system, who take into account and respond to rising climate change, and who want to advance a progressive agenda that addresses the needs and interests of majority of Texans.
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Vital issues - challenging pol and econ power 