Lessons Learned from Texas
Last month, more than 3 million Texans lost access to their electricity in a historic winter storm that took a large portion of the grid offline for several days. At least 24 people lost their lives from cold exposure, fires, and carbon monoxide poisoning while trying to heat themselves. Beyond electricity, millions of people were without safe drinking water for days as water facilities similarly went offline. The state that once took pride in its unregulated energy markets suffered one of the worst blackouts of recent years.
Texas typically has a generating capacity of approximately 67,000 megawatts in the winter, compared to a peak capacity of roughly 86,000 megawatts in the summer. Unlike its more northern neighbors, Texas typically sees higher energy demands in the summer because of the sweltering heat. Despite precedent, Texas was hit with temperatures plunging into the single digits, which caused Texans to utilize heaters and other appliances at levels unusual for this time of year. This overburdened the existing grid, which was already suffering from its own shutdowns. At the peak of the crisis, 46,000 megawatts of Texas’ power grid were offline - 28,000 from natural gas, coal, and nuclear plants and 18,000 from wind and solar, according to the Electric Reliability Council of Texas. Just as the grid had historically high demand, more than half of its supply froze up (quite literally). Although Virginia’s energy supply is vastly different than Texas’, there are several lessons that the Commonwealth would be smart to heed as it plans for the future.
Texas’ power grid remains unconnected to other grids in other states to keep it from being subject to oversight by FERC. As a result, it was unable to call on its neighbors for extra stores of electricity when things got particularly bad. States like Virginia, on the other hand, are interconnected to regional grids that can be called upon if needed.
Also unique to Texas, much of the grid had little to no winterization. Although many northern states have shown the success of winterization, high competition and no regulation have kept most Texas providers from investing in winterization that would have kept the grid online during these cold temperatures. Although many argue the costs for winterization still do not make financial sense with the infrequency of cold temperatures in Texas, increased variability in weather will likely make this trade-off less defensible in the future.
The fully deregulated retail energy market saves consumers money in the best of times but left its consumers with staggering bills in the worst of times. Some consumers reported bills of thousands of dollars during this crisis. Virginia does not have the same system as Texas but still suffers from a monopoly utility structure that has a faulty regulatory structure. According to the Virginia State Corporation Commission, Dominion Energy has not had its retail electricity prices set by regulators since 1992, even though it regularly generates millions of dollars of excess profits. Although Virginia has made serious advances in decarbonizing its power grid, we largely witnessed inaction this year when it came to ensuring fair prices for ratepayers.
Another important highlight is the unique power and necessity of a distributed grid. Many Texans with rooftop solar and batteries were able to remain online throughout the crisis, as has been the case in many similar emergencies, and exhibited the strength of distribution. There are myriad benefits to investing in distributed energy resources (DERs), including cost and sustainability, but one not spoken of often enough is safety and resiliency. Highly centralized energy production is vulnerable to intense weather events or more nefarious deliberate attacks. Whether in the form of residential production or slightly larger microgrids, DERs can efficiently hedge against the possibility of these events.
If this crisis taught us anything, it is that electricity can be a matter of life and death. Texas suffered a tremendous loss that showcased the necessity for strong energy policy that values consumer protection, resiliency, sustainability, and investment in alternative energy sources.