It’s been a minute or three since I shared my thoughts here. Who knows if anyone is still watching.
I should note that it is currently 18º outside with 15 mph winds from the north west, so it feels damned cold. Hell, it is damned cold. It didn’t get above freezing yesterday. If the weather gurus are correct, it won’t get above freezing today, and will be even colder Tuesday morning.
That said, this is a fairly normal hard freeze — the kind of event we see nearly every year. Indeed, we WANT this sort of thing to happen annually because it’s good for the fruit trees and and bad for pesty insects.
But our grid traffic cop (the Electric Reliability Council of Texas) is pleading with us to conserve energy until about 10 a.m. — and has asked us to do the same tomorrow morning because demand is expected to be greater than our electrical providers can supply.
In short, the self-proclaimed energy capital of the world (Texas) can’t guarantee the heat and lights will stay on during a normal winter freeze. I don’t know about you, but that’s giving me flashbacks to the Winter of 2021.
I didn’t think winter-related PTSD was a thing, but here we are.
Anyway, for those of you who are new to our great state, or maybe didn’t pay attention 30-ish years ago, here’s a bit of history about our electrical grid and how we came to be in this mess.
Our “grid” was regulated up until the early aughts. That’s when we (state government) moved to an unregulated energy market.
In the before times, electricity was supplied by a virtual monopoly that was strictly regulated (remember TXU or Ready Killowatt?). Rates were regulated and infrastructure updates, upgrades and expansion were mandated, but the monopoly was guaranteed a healthy profit.
Along came Enron, and an effort in California to de-regulate the industry because competition is a good thing. Seeing big bucks, Enron got inside the pockets of a bunch of Texas politicians. It convinced them that what California did was a real good start, but Texas could do better.
Not too long ago, I read a great story about a powerful Democratic state senator, a trip to California on an Enron jet, and a energy market plan sketched out on the back of an envelope over three or four glasses of Glenlivet during the flight back. I’ll try to find it and post a link, but search “Texas electricity deregulation,” on the Google machine and you’ll find a ton of stuff.
Anyway, we broke up the monopoly in the name of competition, de-coupled production from delivery, de-regulated prices (also in the name of competition) and, basically, fully implemented Enron’s wet dream of a completely open, unregulated energy market.
What could go wrong? Well, for one thing, Enron famously went bust. Y’all remember that, right? It was a pretty big, pretty messy deal.
Our state’s leaders waved that Enron bankruptcy away like an annoying whisp of fog and de-regulated our energy markets anyway. It was supposed to mean we paid the lowest energy prices in the country, and for a while, things were pretty rosy. However, those lower prices came at the expense of expansion of capacity and regular upgrades.
The practical effect is that industry has little or no incentive to ensure there is enough energy available, and at a decent price for consumers, when conditions tighten. Instead, it benefits industry that supply is low when demand is highest, because it jacks up the price. Capitalism, baby! Competition!
There is also little incentive to expand capacity because, well, supply and demand. Again, capitalism, with very little in the way of consumer protections. In fact, a recent court case ruled that energy providers are under no obligation to supply adequate services, even during a weather emergency.
Thus, ERCOT and the energy markets are working today exactly as they were designed to 20 years ago. It’s just that it was not designed for us, the consumers. It’s designed to maximize profits while minimizing industry costs and it’s working quite well, thank you very much.
Do you want this to change? Do you want a little more transparency, better price protections, a more robust grid?
Well, you’ll need to talk to your state legislator. In our case in Taylor, as in many districts, that legislator is supported by the very same interests that foisted this market upon us — maybe not the exact same people (tho some are), and those interests have other interests these days (like banning books and women’s health care, and destroying public education as we know it), but they are the very same interests.
To paraphrase a line from one of my favorite movies, “Never underestimate the lengths a West Texas oil oligarch (or three) will go to when money is on the line.”
Y’all stay warm, if you can.
The Ragged Edge 