Last month, a massive Arctic explosion hit much of the country, including Texas. Electricity consumption has risen sharply, which has led to an overload of the power grid. Thankfully, our state avoided the deadly power outages it experienced in 2021. In the east, some North Carolina residents marked Christmas Eve with constant power outages.
So, last week, Texas regulators took a winning lap. “It was not an event,” said Peter Lake, chairman of the Public Utilities Commission. He praised the reforms carried out over the past year and a half. And certainly some of these reforms seem to have made a difference.
But let’s not get ahead of ourselves and wind up football. We are not in the end zone yet. After a deep freeze during the Christmas week, we learned a lot about what worked and what didn’t. Some of these revelations are disturbing.
Most worryingly, Texas is still struggling to deliver natural gas in its coldest weather. When the temperature drops, we start gas stoves and consume a lot of electricity. We need a lot of natural gas to keep warm. When we fail to get it, the Texans may die.
Which is exactly what happened in February 2021, after a large number of gas processing plants were shut down and shut down due to black ice. In five days of the same month, the state’s gas processing capacity fell by 84 percent. Without these well gas treatment plants, the gas cannot enter the government pipelines. Last December the system performance was better, but still not great.
The state’s gas processing capacity fell 34 percent in the two days leading up to Christmas, according to energy data and analytics firm Wood Mackenzie. However, “the fact that it was as cold as before and we still had enough inventory is a positive thing,” said Ben Chu, the firm’s head of trade analytics.
But this drop in gas processing capacity worries Joshua Rhodes, founding partner of energy consulting firm IdeaSmiths and a fellow at the University of Texas at Austin. “I don’t have much confidence that we have solved the gas supply problems that we encountered during the Winter Storm of Uri,” he said.
The Texas Railroad Commission, the ill-named state agency that controls the oil and gas industry, has passed regulations requiring gas processing plants to be ready for the cold by December 1, a couple of weeks before the recent hard freeze. Fines for violating these rules could be up to $1 million, though that would require the Texas Electric Reliability Board to declare a state of emergency, which was not the case last month. A Railroad Commission spokesman said he had no knowledge of Wood Mackenzie’s data. “A critical gas supply has been shut down,” said R. J. DeSilva. “There was enough gas for electric generators. There was no shortage of gas.”
However, there was clearly not enough gas in the state pipelines. Atmos Energy, a major home gas provider in the state, was unable to provide enough gas to consumers in the suburbs of Dallas and Austin. Governor Greg Abbott has asked for an investigation into the incident.
Power plants also had problems getting gas to burn. Dan Woodfin, head of systems operations for ERCOT, Texas’ dominant power grid, said the board ordered several generators to burn oil (a relatively dirty, carbon-intensive energy source that has been phased out of service since the 1980s) because they weren’t working. t have enough natural gas. This backup fuel was made available thanks to a costly new reform following the 2021 blackout. This winter, ERCOT paid $52.9 million for nineteen power plants to have extra backup fuel available, a cost that will be passed on to Texans’ electricity bills.
At least 2,100 megawatts of natural gas-fired electricity—enough to power 420,000 homes—was due to go offline at some point during the critical period of December 22-24 due to gas shortages. Many other power plants also had outages, but they didn’t provide regulators with a reason, so it’s possible that the gas shortage affected significantly more generators. Last week, ERCOT said it was investigating why so many factories went offline.
One of the other changes made by the Legislature in the 2021 session was a new requirement to be “prepared for winter weather.” Power plant operators were required to sign declarations that they were prepared to work in cold weather. Despite this, about 150 units experienced unplanned outages in December. (ERCOT has more than 800 power plants, some running multiple units.) Rich Parsons, a PUC spokesman, promised to investigate. “Any generator found violating our winterization guidelines will be held accountable, and this may include fines of $1 million per violation per day,” he said.
So were winter weather announcements worth more than the paper they were printed on? It’s not clear yet. At least one PUC member, Abbott-appointed Kathleen Jackson, has indicated that she prefers not to flex her regulatory muscles to find out. “This is not a trap,” Kathleen Jackson said during a meeting last week. “This is an established process that encourages [power plants]to go back after the event and do a root cause analysis on your own, to identify what you could have done better.”
Sometimes you need a hint. Power plants have provided signed and notarized statements that they are ready for another explosion in the Arctic, and some have not complied. Root cause analysis is all well and good, but nothing gets executives to sit down and focus like a million dollar fine. No one wants a repeat of 2021: several hundred deaths, 11 million Texans without power, and an estimated $100 billion impact on the economy.