Media & news

Hope and a Prayer

Feb 1, 2022

Gary Smith

Today’s availability of electronic information and social media is a blessing and a curse. I have trouble processing all the information available to me each day. And, I don’t do social media. All that constant information leads to a problem of retention and, more importantly, remembering the messages in the details.

For example, Winter Storm Uri caused major power outages across Texas and the Midwest last February. Texas had the most severe problems with sub-freezing temperatures that resulted in power plant outages, renewable power failures, transmission outages, and power outages that lasted almost two weeks. More than 100 people died of exposure because they didn’t have power or heat.  The Texas economy suffered from disruptions in business, and artificially high power prices were imposed on customers through ERCOT’s deregulated market structure.

It was a terrible weather event that consumed the news for weeks. There were personalized stories about the fate of people without power. After the storm cleared and temperatures moderated, the people who had power through the storm faced huge power bills for service. However, how much do you hear about Winter Storm Uri as its anniversary approaches?

As I write this in late December 2021, a story dominating the headlines this week is another winter storm across the Pacific Northwest and the Sierra Nevada regions. It has dumped unprecedented snow across Washington and Oregon and more snow is forecasted.  The northwest has experienced frigid temperatures, with Seattle, Washington recording 17 degrees and Bellingham, Washington reaching 7 degrees. Both broke records set in 1968.

The winter storm has disrupted travel and closed roads from San Francisco to Reno for more than three days and shut down Interstate 80 from Nevada to California because of large snow packs. Garbage and city services have been discontinued in many areas because of the snow and more than 5,000 electric customers have been without power due to the severe weather.

Despite the similarities to last year’s storm, the stories make little or no mention of Winer Storm Uri. The difficulties with this year’s storms raise the question of whether the Midwest and Texas are any better prepared for another major winter storm than last year.

The Midcontinent System Operator (MISO), which provides power to most of the Midwest under a structured market approach that is largely deregulated, has implemented emergency pricing reforms, improved scarcity pricing platforms, and mandated power generators to provide weekly fuel supply data. However, Tyler Jubert, a power analyst for S&P Global Platts Analytics, says, “This winter still remains vulnerable to emergency alerts driven by high congestion or capacity shortages.” In English, that means wind and solar power may be in the wrong location and there may not be enough traditional coal and natural gas-fired generation to meet high demands caused by extreme weather.

Texas is likely not as well situated for a major winter storm as MISO. The Texas Legislature has passed laws to make the electric grid more reliable during freezing weather, including the governance of ERCOT, Texas’ grid operator, and a requirement for power generators and transmission companies to be more resilient during extreme weather. Governor Gregg Abbott said, “Everything that needed to be done was done to fix the power grid” as he signed the legislation.

However, some industry experts believe the Texas grid and deregulated markets are too heavily geared toward price most of the time and not enough toward reliability for extreme weather. For instance, the Texas legislation doesn’t require power generators to complete reliability upgrades until late 2022 at the earliest. The legislation also provides many exceptions that allow power generators to avoid costly winterization programs so they can keep their cost of service low during other times of the year.

Also, the legislation does nothing to resolve the high costs of power experienced by customers last winter or provide a plan for dealing with those expected high costs during extreme weather in the future. If there is another winter event, power generators will likely again incur exorbitant costs that will be passed on to their consumers because of artificially inflated prices resulting from Texas’ deregulated market structure.

All of which means the deregulated power grids in the west are still at risk for outages and high expenses if there is another major winter storm this year.

As the college football bowl season concludes, many games are decided at the very end with one team needing one more touchdown to win. The announcers talk about a Hail Mary on the last play or a team playing on a hope and a prayer to win as the clock winds down. Hopes and prayers don’t work as well for electric utilities as they do for football teams. While we may have problems with a severe winter storm, we value reliability as much as cost and our system has been planned and built for the power to stay on. I like our plan a lot better than a hope and a prayer.

I hope you have a good month.


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