Image: Artic Freeze in Texas
Counter-Claim: No correlation between income and counties without power
Soundtrack: Heart-Shaped Box, (Orchestral)
Start with Water & Power: Public Utilities
Continued from Water & Power: [De]Regulation, The Battle Over Texas Regulation.
Reliability
After WW2, throughout the “50s, there was a massive push in infrastructure expansion that saw the installation of much of today's equipment. The availability of cheap electricity allowed AC units to ubiquitous, starting a migrating towards the sunbelt. From '1950 to '2000, Texas experienced the largest population boom with a 170% population increase.
When engineers put this infrastructure in place, they did it so with a 50-year life expectancy. As these systems age, they are maintained in a doctrine known as Run To Failure (RTF), meaning that we are reactive to risks.
It just wasn’t practical for utilities to regularly inspect their entire electrical systems. Instead, utilities have maintained power lines under a run-to-failure mentality — assuming everything is fine until someone calls in to complain about an outage.
One of the many global warming factors, or more precisely global weirding, is that the hots get hotter and the colds get colder causing more violent swings in weather patterns. In both extremes, hot and cold, weather causes increases in electricity; as your AC or Heat Pump gets pulled further into the extremes, they lose efficiency and have to work even harder, putting more strain on the grid.
These swings in utilization have to be built into grid forecasting models to help plan for this based on weather patterns and usage history. As one experienced operator from the northeast recounts, this process can be hard to get companies on board. No one gets a promotion for preventing a catastrophe, but the bonuses do go out to those who can save a few dollars.
I was raked over the coals and this forecast was strongly challenged. Providing extra generation capacity, ensuring committed (firm) deliveries of gas during the winter, upgrading transmission facilities are all expensive endeavors. Premiums are paid to ensure gas delivery and backup power and there is no refund if it’s not used. Such actions increased the annual budget and impact rates significantly for something that is not likely to occur most years, even if the extreme weather projections are appropriate.
Christmas ‘1989, a few years before breaking up the monopolies, the temperature in Texas got low enough that it cascaded into rolling blackouts. This prompted calls for winterization that was built upon ERCOT's original mandate in the “70s.
In February 2011, a storm swept across Texas pulling temperatures down again, in the single digits, causing massive blackouts as 3.2 million people went without power.
Federal Energy Regulatory Commission and the North American Electric Reliability Corporation conducted an investigation and released a report, and again, recommending for winterization, citing that the previous winterization efforts were followed in “poor performance”, as mostly lip service. But as Federal agencies, they had no mandate over these intrastate entities.
As the polar vortex swept the nation again in 2014, Texas, this time, escaped with a near miss as they become dangerously close to rolling blackouts.
Who is responsible for providing adequate capacity in Texas during extreme conditions? The short answer is no one. The Electric Reliability Council of Texas (ERCOT) looks at potential forecasted peak conditions and expected available generation and if there is sufficient margin they assume everything will be all right.
Then as a storm swept across Texas this year, the unwinterized equipment predictably began to freeze.
The biggest risk, and most of the steady power that supports 46% of the grid, comes from gas pumps extracting directly from the ground, containing a mix of water. As temperatures drop, these start to “freeze off”, cutting pressure in lines and reducing generator output.
Coal, 18%, piles also started to freeze, shutting down several plants. This is then followed by nuclear power, at 11%, which had a plant go down due to an issue with their feedwater pumps freezing.
The wind, which is expected to be variable, 23%, started to slow down and then freeze as the oil temperature isn't maintained; Joining Solar, 2%, which doesn't operate at night or while covered by snow.
As Texas is a scarcity market, renewables are largely considered secondary or supplemental power that is not currently paired with the required power banks to maintain constant output.
While [ news | ads | propaganda ] was quick to jump upon the equally unwinterized renewable supply, these also aren't held to the same expectations within the Texas market.
As the power levels began to drop, ERCOT focused on routing to residential, which cuts the power for the other spot providers to bootstrap up. During the peak, the Texas grid lost 48.6% of its throughput, dipping below 59.4 Hz for 4 minutes and 23 seconds.
If ERCOT sustained this outage for another 4 minutes and 37 seconds, the grid, without enough power to keep itself running, would have crashed into a “black start” scenario, meaning total system blackout lasting for weeks.
On top of all the massive power bills and burst pipes that residents currently have to face, Texas was less than five minutes away from absolute system failure due to no fault of their own.
Cost
While all of this can be seen as a failure of Texas, largely by their own political design; Understand that it is not a problem contained to Texas.
In 2017 American Society of Civil Engineers (ASCE) released a report card for grading US infrastructure and found that the aging electrical grid was rated a D+. In the same report, Texas got such high marks as a B+.
On its own, with redundancy and extra capacity, this shouldn't be that much of a problem; But wanting not to pay people to do inspections, then not pay for redundancy, and then not pay for winterization are all fruit from the same tree.
From the 1950s to the '80s, significant power outages averaged fewer than five per year. But that's changed. In 2007, there were 76, in 2011, more than 300.
This is then compounded by the fact that electricity is much more important to society today than during the 50s and 60s. Lines that could fail and then be replaced as needed now support life-sustaining critical infrastructures like AC units and Heat Pumps in previously uninhabitable places.
In California, we have seen how PG&E's equipment failures have caused fatal wildfires multiple years in a row, while workers describe a pervasive corporate culture of discouraging employees from reporting safety problems.
And when these cascading liabilities cause bankruptcy, judges continue to approve millions to be paid out in bonuses to executives and top rank staff, all to “align incentives” of these investor-owned utilities.
While breaking up monopolies is one way to improve the markets, it should be noted that Texas does actually host the nation’s largest municipally-owned gas and electric utility; but caught between the people and the market, they are functionally just a rate collector for other investor-owned utilities; Whose cost of production does not actually change with the weather, making this a pure-profit indebting scheme.
CPS is currently in the process of suing ERCOT of these rates. Still, the state reassured financers on a call last week that they would not pass the required legislation to reprice the transactions before the 30 days settlement period would come to pass.
Texas Monthly has obtained a recording of a 48-minute call on March 9 in which Texas Public Utility Commission chairman Arthur D’Andrea discussed the fallout from the February power crisis with investors. During that call, which was hosted by Bank of America Securities and closed to the public and news media, D’Andrea took pains to ease investors’ concerns that electricity trades, transacted at the highest prices the market allows, might be reversed, potentially costing trading firms and publicly traded generating companies millions of dollars.
This then has caused ERCOT to turn to Goldman Sach's financers to secure credit to cover a $3-billion shortfall and span the remaining $4.2-billion of overcharges to customers.
At a certain point, the idea of who will see this line item on their bill is a matter of aesthetics. It's all cashflow being taken from Texan ratepayers that will then pass through several different administrative entities collecting their tolls [Goldman Sach's $200m] that were being charged at a price unmoored from the cost of production.
A price that only went up because it's not the producers responsible for bearing the risk of not meeting production goals. After all, it's a free-market; With at least 57 deaths.