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Electric Reliability Council of Texas (ERCOT)

Texas’s Power Woes Are Just the Latest Reminder of the Danger of Privatization

By Donald Cohen - Truthout, February 17, 2022

Texas dodged a bullet earlier this month when its statewide power grid, operated by the Electric Reliability Council of Texas (ERCOT), held up during a drop in temperatures. But that’s not because state leaders, particularly Republican Gov. Greg Abbott, learned anything from last year’s horrific storm.

As Truthout’s Candice Bernd reported last week, not only did 70,000 Texans still experience power and utility services outages during the recent cold snap, but fracked gas production also saw its biggest dip in production since the February 2021 grid failure, revealing the industry’s continued vulnerability to extreme weather.

Last year, Winter Storm Uri blanketed the entire state with freezing temperatures and snow for several days, causing record energy demand. This forced ERCOT to tell energy providers to cut power as they tried to avoid a total collapse of the energy system. Nearly 5 million people lost power and at least 246 died as a result of the storm.

The latest freeze was a more typical Texas cold front. Local power outages were caused mainly by downed power lines due to trees and ice. Still, Abbott is claiming that the system is more reliable and resilient than it’s ever been.

Experts disagree. “The thing about [this month’s freeze] is, we passed the test, but it was also a really easy test, and we didn’t pass it with perfect scores,” Michael Webber, Josey Centennial Professor in Energy Resources at the University of Texas, told Truthout’s Bernd. “There’s a lot of people who had problems with their power, and there was still the gas production drop, so I think we shouldn’t take away too much false confidence that we’re all good now.”

Texas’s energy system is controlled by a complex mix of public and private actors, including the nonprofit ERCOT, oil and gas companies, the Texas Railroad Commission, and others. The details don’t matter as much as what makes the state’s system unique: It’s independent; not connected to the country’s two other national grids, the Western Interconnection and the Eastern Interconnection; and not subject to federal oversight.

This has allowed it to become one of the country’s most marketized systems, according to Johanna Bozuwa, director of the Climate and Community Project. It’s heavily deregulated, designed to allow for intense competition in the retail sale of electricity. As one portfolio manager at a financial firm put it, it’s a “Wild West market design based only on short-run prices.”

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