“In 2011, even though the market was caught by surprise by one of the hottest summers in Texas history, Texans did not experience any blackouts because of reliable generation. Today, however, the reckless rush toward renewables has changed the situation completely. ”

– Bill Peacock, Energy Alliance (below)

Bradley: How did the just-completed Texas legislative session deal with the February Blackout that caused so much damage to life and property?

Peacock: The session had two issues to address here. One was dealing with the aftermath costs; the other was reform to prevent it from happening again. The lawmakers did poorly with both. 

Q: What did the Legislature do wrong in dealing with the aftermath? 

A: The Legislature failed to appropriately address the massive financial costs of the blackout, most of which came from the Public Utility Commission of Texas’s (PUCT) panicked decision to raise electricity prices to $9,000 per MWh and leave them there for three days.

“As Texas faces the possibility of high temperatures this summer and the certainty that wind will operate at only a fraction of its installed capacity during periods of peak demand, it is possible the Legislature may adjourn on May 31 having done nothing to address the harm renewables are doing to the Texas grid.”

Despite years of increasing reliance on intermittent generation sources like wind and solar, Texas policymakers seem to have been caught by surprise by the prolonged blackouts experienced by millions of Texans in February.

They should not have been. While temperatures dropped into the single digits for extended periods over much of Texas, solar and wind generators were largely no-shows on the Texas grid.

While other factors were in play, it was renewables that led Texas into darkness.…

“The physical operation of the grid can be separated from the economic decisions of what power is generated, transmitted, and sold at wholesale or retail in terms of quantity, cost, and price.”

“Mistakes by ERCOT or the PUCT or Texas legislature make my point–this is a planning failure, not a market failure. Not physics but economics. A historian is weighing evidence about this either being a market or government failure. It is a government failure writ large.” (Bradley, below)

Electricity is different. Power flows must the centrally managed. Ergo, regulators and politicians must manage the grid.

WRONG. The physical operation of the grid can be separated from the economic decisions of what power is generated, transmitted, and sold at wholesale or retail in terms of quantity, cost, and price. Companies themselves, vertically and horizontally integrated, what might be called electricity majors, is the opportunity cost of the present regulatory regime.…

“After a winter storm in Texas earlier this month left the state’s residents to contend with widespread power outages and skyrocketing electricity prices, William W. Hogan, the architect of the state’s energy market system and a professor at the Harvard Kennedy School, said … the state’s electricity market had ‘worked as designed’ given the conditions.”

“One Texas resident … now owes $16,752 for his energy bill, wiping out his savings. Hogan acknowledged in the Wednesday interview that such situations are ‘terrible.’ Still, he argued the end result could have been much worse.”

– Kennedy School Professor Who Designed Texas’s Energy Market Defends Skyrocketing Prices Following Winter Storm,” The Harvard Crimson (February 26, 2021).

“‘I feel like a caveman,’ said Alexander D. ‘Alex’ Kontoyiannis ’23, describing his experience studying for his organic chemistry midterm Tuesday night.