Who collectively are responsible for these types of pro-active preventions for worst case scenarios that will likely be more and more common going forward in the future? Is it our state legislatures? Is it energy companies? Are these actions being taken right now? If not, what is stopping energy companies from deploying these types of methods to be better prepared for future freezing snow like conditions? If they're in the process of being done, but news reports that we could still experience black outs this upcoming winter, what are the deadlines for when proper prevention will be available to stop a black out? Granted, I understand nuclear reactor construction for energy grid purposes requires billions to build and start up. I get that. But what is preventing oil companies from creating more gas storage? Is it lack of legislation to help fund their construction? Is it lack of foresight from energy companies? It would seem to me being more sophisticated about hedging is what you'd want to do regardless of the risk of a black out. I guess my point is, if you could be more sophisticated about how to hedge better, you'd do that anyways wouldn't you? Wouldn't that mean energy companies would make even more money by being better at hedging? So why would an energy company handicap itself by being less sophisticated and it taking a black out for them figure out how to do it better? What steps are energy companies taking in order to do better? To be more sophisticated that is. It seems like solar, home battery and backup energy generation are amenities afforded to mostly middle class and above home owners. I would assume it would take incentives to encourage energy storage methods in affordable housing where the residents aren't the owners of the property like low income apartments. I would assume legislation would have to be proposed to encourage property owners of your worse conditioned apartments to invest in energy saving measures. I bring this up because I'm really less concerned over the middle class and above that will be able to buy a car battery's worth of energy to keep their phones and laptops charged and have a Wifi hotspot phone plan and can buy portable natural gas tanks and stoves they already have in possession for camping and road trips and people who likely have multiple layers of blankets and properly insulated homes. And their Yeti cooler in the garage they can just dump their perishables in until the power comes back and have a fully shelved pantry and a main fridge and a back up fridge even with all sorts of varieties of good food stocked up year round. People with a 20,000 gallon chlorinated pool and have a means to collect water to heat up and bathe themselves when utilities go out. People with a family sized RV parked in perpetuity in their custom made carport on their acres of land separate from fellow neighbors. These are people who will mostly be minorly inconvenienced from a black out should another occur. They'll live. Instead, my bigger concern is for people in thinly insulated housing, likely low income, and thus are less likely to own back up energy storage methods to get through a black out safely. I also can't help but think of those that are chronically ill and in low income housing that cut corners on things like proper insulation. These are likely the people who died from the last time the energy grid failed. These are likely the people who are going to die if another black out that goes for days on end were to occur in the future. Understanding that the purpose of a business is to make a profit, and that energy oil companies compete globally, I still find it a petty rationalization that doesn't justify the hundreds of Texans that died in a way that could have been prevented by implementing more proactive methods, some of which you've already mentioned, to ensure the energy grid wouldn't fail and won't again. And then the fact that Texans caught in bad deals with certain energy companies are paying for energy companies' failure to deliver affordable electricity in their homes for the next 20 years, and you're telling me that this is a success seems disingenuous to put it mildly. Where is the accountability beyond the hand waving that oil companies compete globally and therefore it's okay that hundreds of Texans died in 2021? You would think being a big dick swinging part of the global economy, local state residents that your companies are located in would also feel the benefit by having reliable energy even in times of weathered crisis like slightly moderate snowfall, which many nations and states have figured out how to deal with. It's not like a tornado ravaged energy grid buildings. We're talking about rainfall that freezes upon descent at a moderate rate that should have been manageable. We're not talking about some great freeze with 60 inches of snowfall here. What IS being done to protect Texas' most vulnerable? I get the media swipe about foam insulation not being the stop all solution going forward, but what in actuality is being done to prevent a future black out?
Chronicle demanded 2 RRC commissioners resign for their gross negligence regulated gas wells for utility uses: Editorial: Resign, Craddick and Christian. Regulators misled about winter storm and failed to prevent another (houstonchronicle.com) As much as I don't like the RRC commissioners (they are the picture of regulatory capture), I don't feel like the newspapers are actually doing a good job informing the public what they're doing. In the RRC order approved yesterday, wells over a certain size and wells identified in the Electric Grid Supply Chain Map must be weatherized, no exemptions. That segment can produce enough gas for our utilities by itself. Because they are identified as critical, the power utilities will also keep them on the do-not-curtail list, so power won't be shut off for them in rolling blackouts. Tiny wells are very numerous, but the volumes are so low as to be insignificant in an emergency. And we want to be able to curtail their electricity supply in an emergency. So they are exempted. The medium-sized wells are eligible to apply for an exemption if they are not on the Supply Chain Map. They must demonstrate that they are not critical - it's not automatic (but RRC is a sweetheart, so I'm guessing most exemptions would be approved). RRC doesn't want to mark all wells as critical because that would be too much electric load to put on the do-not-curtail list, and they don't want to demand weatherization without the do-not-curtail status (which people might get upset about). So will it prevent a repeat of the freeze-off of gas supply? I think natural disasters can overwhelm the best-laid plans, but their approach should actually be helpful. The RRC can't solve this problem by themselves (as I said earlier, the power industry has to protect itself from its own over-reliance on the gas industry), but I think they've taken some reasonable, if conservative, steps to address the weatherization demands. One thing I wish the RRC would do is require better hedging by gas utilities, but it looks like they aren't going there. I think they can also do more to get pipelines to operate without grid electricity (they can run pumps with natural gas instead), but won't do that either.
Ton to respond to in here, so I'll do it in parts. On who should solve it, I think the RRC and PUCT can do some of it, but the biggest changes you can make would have to happen in the Legislature, and they didn't want to. I don't think it's rational to expect energy companies to behave differently -- they react to market signals to maximize profits and if you want them to behave differently you have to change the regulatory environment. Also, if anyone says they can guarantee there won't be more blackouts (I'm looking at you, Gov Abbott), tar and feather them, they're charlatans. You can't guarantee any massive system like the grid will survive a natural disaster. It's the power plants and gas utilities that really need the storage if we're using it to protect from natural disaster. Some plants and utilities do have some. But most of the time it's not economic to have your capital tied up in stored gas. So if we want them to have that buffer, we probably need a law to require it. Many existing plants though are now space-constrained though and can't have storage on-site, so that might remain a weakness. A related solution is to have plants and utilities buy "firm" gas delivery, which is a financial instrument that requires the gas supplier to deliver or else pay a financial consequence. If all the gas plants had bought firm during Uri, they probably wouldn't have lost billions of dollars (though we'd still have blackouts), but again most of the time it isn't economic so you'd want regulation to require them to do it. First, please understand there are different kinds of energy companies, with the important distinction here being between regulated utilities and competitive firms. Competitive firms are good at hedging, and they pay the price when they fail. Regulated utilities buy gas and power on behalf of their customers and then pass those costs to customers without taking any profit or any risk. They make their money on distribution charges, not supply. Regulated utilities should hedge to protect their customers (and the large ones do), but they don't have any skin in the game. If they fail at hedging, their shareholders don't pay -- the customers will pay. We saw that during Uri.* So they should hedge but they don't put much effort in and their hedging departments and strategies are not as sophisticated as they are in competitive firms because there is no cost to failure. That lack of motivation will not change so long as we have regulated utilities because it is the regulatory compact that shields utilities from supply risk. The RRC, btw, regulates gas utilities so I'm not surprised their hedging is so bad. Regulated power utilities (like Austin Energy, CPS, Pedernales Coop, etc) are better at it, and they are regulated by the PUCT. They also tend to be bigger operations than the little gas utilities, which might explain the higher sophistication. *CenterPoint told shareholders after Uri, "First, we delivered very strong results for the first quarter of 2021, including $0.47 of utility EPS. Because the higher natural gas prices are pass-through costs for our business, they did not impact this quarter’s utility results…. We are off to a great start for the year, so let’s check the utility earnings box as being on track." Obviously, we agree here. I'm not sure what it is I called a success. I think the state's response to Uri was another failed opportunity. Even if we get all the weatherization the media carries on about, it's not enough. As for the 'bad deals', please recognize it's not just a bad deal for certain customers with a certain company. It is the regulatory compact. It is how the whole world did utilities until deregulation in the 1990s, and mostly it still lives on. One, I think you underestimate what a disaster Uri was. Yeah, we can't compete with Michigan on absolute measures for blizzards, but it was a really bad and unprecedented winter storm for Texas. It set records for duration of cold. I think the insurance industry estimated claims for damages would rival Hurricane Harvey. And we're not built for that the way Michigan might build for it because our main problem is heat. And two, it seems that by the time you reached the end of your post I'd morphed into an advocate for the gas industry. I'm not. I am disappointed that the Texas Legislature didn't pursue more aggressive changes to fix some of the systemic problems that caused this disaster. I'm not opposed to weatherizing, I just think it's not nearly enough of a solution. And I'm annoyed with the media who have gravitated to this one idea that if we can get it somehow our problems will magically disappear. And they won't. All we've done is make some incremental improvements to the system. Our list of critical infrastructure to keep on do-not-curtail is improved. Power plants are required to weatherize (which I think they were mostly doing voluntarily anyway). Many gas wells will now be required to weatherize. Griddy was made illegal. Generation will be coming on-line faster than demand is expected to increase over the next few years, so the reserve margins in ERCOT are forecasted to expand (though not due to any change by government). Power utilities are improving processes for executing real rolling blackouts after they were unable to do it in Uri. I wish more had been done. Hopefully if we stack all these changes, the next disaster will be less-bad for it. But no, you can't guarantee no blackouts. And the poor and sick will suffer more than everyone else.
why does it have to be one or the other? If we don’t have another natural disaster this year, we will probably be fine. It might be 5 years before anyone else dies. Or we might be unlucky.
You won't see this in the newspaper so much because it gets very inside-baseball, but the PUC is continuing to make changes to how ERCOT works. I wanted to point this out for the folks who say the government isn't doing anything to prevent a repeat of Uri. The model we've historically operated on is a scarcity-based economic model -- meaning that they counted on the high wholesale prices of high demand days to justify investment models for new power plant construction (while relying on the retail layer to insulate customers from price volatility). We use what we call an energy-only market, where plants only get paid for the electricity they make, whereas in most other NA markets, they get paid once for just being around and available (a capacity market), and then again for producing (the energy market). The new commission seems to be moving away from this energy-only, scarcity-based idea, lowering the wholesale price cap, increasing procurement of some types of ancillary services (like paying for voltage support), and most recently kicking off a process to explore some kind of capacity-like mechanism. I don't know if these changes are necessary or wise, but the effect I expect is that power plants will fatten their profits on normal days and reduce the opportunity to make windfall profits on high demand days. If we do it right, it should increase our reserve margin but consumers would pay more for the luxury. For electric retailers, the price of doing business daily would go up (and passed to the consumer), but the hedging risk for extreme days would somewhat reduce (making savings for the consumer). Fossil fuels would be favored over most renewables (besides hydro) because renewables are intermittent and probably won't be able to make money for any capacity attributes (part of the great success of Texas wind was our energy-only construct), and they'll earn less on high demand days. By contrast, gas would make more money providing capacity to backup wind and solar. Batteries, microgrid and other grid-edge innovation might benefit, or might not. Aside from that market construct stuff, there's going to be more incentives to hold fuel in nearby storage, to buy gas delivery 'firm', and other things to harden power plant operations. Of course, that cost will also go to consumers. The hope of all that, I think, is to encourage/mandate fatter reserve margins without the volatility that generators and retailers usually face that can sometimes cause bankruptcies and/or reluctance to invest. The cost of power will go up over the long term. Will that make Texans safer? I don't know. The hardening changes will help. The sought market changes undermine the philosophy of the current market, which works well (and reserve margins were forecasted to expand over the next few years), and the new construct may or may not work. The likeliest threat is probably that we get the fossil fuel generation we want but pay way too much for it, and Texas loses a bit of its business edge. My other concern is that the renewables fleet's growth will slow. But when severe natural disasters like Harvey or Uri strike, I doubt any market model will save us (and given the pro-gas nature of these reforms, I think another Uri would enrich natural gas companies even more than the last one did).
400,000 Texas homes and businesses could lose power over financial dispute between energy companies ABBOTT RECEIVED MASSIVE CONTRIBUTION FROM TEXAS BLACKOUT’S BIGGEST PROFITEER
This won't help this year but the Bipartisan Infrastructure package does have funds to improve weatherization of homes along with improvement to transmission lines, maintaining nuclear plants and addressing the supply chain on battery backup systems. https://www.energy.gov/articles/doe...-will-deliver-american-workers-families-and-0
3:50 mentions change in jet stream being partially responsible for last year's winter freeze indicating these types of events will occur more often in the future. Prioritizing a working energy grid for weather events that will be more commonplace is going to be needed regardless of whether you care about the loss of human life that will result. From a business standpoint why would any energy dependent in order to function company consider moving here if the losses from a non-functioning grid offset the tax breaks received to relocate here? Would it not be good optics to actually ensure the power grid won't fail, not only for humanitarian reasons but for businesses too? One of those you pay a lot up front to actually implement but over the long haul save much more compared to reactive disaster relief that can cost much much more and affects everyone, not just stakeholders invested in the energy sector? https://www.ncdc.noaa.gov/billions/
After Vistra's complaints, Energy Transfer backpedaled on their threat to cut off the gas. No real risk of blackouts from it.
This plan seems great - Abbot gonna fix Texas' power grid by - hear me out - adding crypto miners to the grid to drain more power. https://www.bloomberg.com/news/arti...s-bitcoin-mining-to-fortify-the-electric-grid The industry’s advocates have been making that pitch to the governor for years. The idea is that the miners’ computer arrays would demand so much electricity that someone would come along to build more power plants, something Texas badly needs. If the grid starts to go wobbly, as it did when winter storm Uri froze up power plants in February 2021, miners could quickly shut down to conserve energy for homes and businesses. At least two Bitcoin miners have already volunteered to do just that. Texans you know you can obtain the same effect if you just leave all the lights and your air conditioner on full blast when you leave the house! you don't need a crypto mine in your basement. The excess power demand will cause new plants to be built -> this is what Adam Smith discovered back in 1942 after he read "The Fountainhead". Someone would come along! Republicans have actually applied this approach to COVID - fix inadequate hospital space by - getting everybody sick as quickly as possible - and then someone would come along and build new hospitals.
I also hate to say that Abbott is right about anything, but it actually does make sense. The Texas power market is engineered to supply the energy demand that exists and doesn't, like other RTOs, pay power plants for merely existing. So adding big but elective buyers of electricity (electric vehicles and home batteries would also help here) will improve investment cases for new generation and new power plants would be built. Miners would participate directly in the wholesale market (as a trader themselves or sleeved through an energy trader) and wear the wholesale energy price risk. The miners can make money while electricity is cheap, but can quickly turn off when wholesale power prices get high and can be safely curtailed by the utility if they don't turn themselves off. The overall capacity of ERCOT would go up, and the demand response capabilities would also increase, giving us more flexibility during disasters. If everyone blasted their AC, and then turn it off when we need the power, you can get the same effect. However, crypto miners are a financially sustainable industry because they can make money doing it, while you'll just be wasting money blasting your AC. Essentially this is a way to add capacity to the system and make all of us more safe while putting zero cost or risk on any of the other customers in the market. What I don't like about it is that the generation we'd likely be adding is more gas, which will mean that our crypto-capacity would be producing more carbon. You could require that these state-encouraged crypto farms buy 100% renewable energy credits or even power 'with the attributes' (a power purchase agreement to take bundled power and RECs from specified renewable gen only). So the investment encouragement would impact only solar and wind gen. But solar and wind gen aren't dispatchable like fossil fuel, so that additional capacity might disappear on us in an emergency. So you need to be okay with the idea that we'd add carbon to make ourselves safer. I think this step would help. But I think the first and best solution would be interconnecting with the other grids to allow much more robust imports and exports of electricity across state lines. Abbott won't do that because we'll come under the authority of FERC that way. But, it's time. We have a good and mature market now. Not even FERC will screw it up.
I've been hearing Houston is a dying city for a good decade and a half now. I'm sure gas majors are rolling up SUVs in honor of this whopper.
What if I NFT minted a .jpg of a picture of my thermostat? That runs off crypto which is a financially sustainable industry and I don't need a miner to set up shop next door and drain the power grid - basically, the lead time to demand -> create supply is much shorter if Texans started wasting power NOW rather than waiting for some bros to build a server farm.
