Texas Avoids Drastic Grid Changes After Fatal Freeze –

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Texas Avoids Drastic Grid Changes After Fatal Freeze – fr


“Loopholes and low fines will likely lead many gas wells and power plants to do nothing”

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After months of debate, Texas lawmakers are set to adopt a series of measures in response to the deadly blackouts in February. Yet these bills, critics say, do little to address the fundamental problems that have made the state’s electricity grid so vulnerable.

While pending legislation will take action, including forcing power plants and some pipelines to better prepare for the cold, the bills will do nothing to ensure that the state has sufficient generating capacity at all times. . They also wouldn’t force the Texas grid to connect to neighboring states so that they could provide backup.

The result is that Texas will continue to have the most isolated and least regulated electricity grid in the United States, relying heavily on market forces to keep the lights on for its 29 million people. Analysts and others warn that this exposes the state to yet another catastrophe.

“They leave potential for another disaster in the future by not establishing a clear set of reliability requirements,” said Toby Shea, vice president and chief credit officer at Moody’s Investors Service, in an interview. “It is not clear that the market alone would care to ensure that the resources are there.”

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Lawmakers in the Republican-controlled legislature are defending their approach.

In addition to forcing power plants and other infrastructure to deteriorate, the bills they send to Texas Gov. Greg Abbott, also a Republican, include measures that will require members of the grid operator’s board of directors to reside. in the state, to increase the number of seats on the state utilities commission and mandate better coordination between agencies in the event of an emergency. Abbott has already signed a bill to protect consumers from exposure to exorbitant wholesale electricity prices.

There was no need to overhaul the entire electricity market, said Kelly Hancock, a Republican state senator who worked on much of the legislation.

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“We recognize that we have a single market,” Hancock said in a telephone interview. “We have very affordable and low cost energy. We just need to make sure we fix the issues that arose when every county was frozen over. I think we can do it in our current market structure.

The frost plunged millions of Texans into darkness for much of a week, cutting off water supplies and domestic boilers. Authorities in Texas put the death toll at 151, but an analysis of excessive death data by Buzzfeed concluded that it was more than four times higher.

The Texas legislative session ends Monday and the state Senate and House of Representatives meet every two years. This means the Texans will be exposed to two winter seasons before another chance presents itself to enact changes.

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Power reserve

In much of the United States, grid operators make sure they have enough back-up capacity by paying a number of power plants to sit idle, ready to provide power just in case. would be necessary. This reduces the risk of breakdowns. But it increases costs for consumers.

Texas does not have such a system. The idea there is for the market to provide all the incentives necessary for power plants to be ready so that they can take advantage of soaring prices if there is a supply disruption. This usually happens in the summer.

The deep freeze, however, took the generators by surprise, striking at a time when many were down for maintenance. As the cold set in, people increased their heat. The demand for electricity skyrocketed and there weren’t enough generators to meet the needs. Many power plants that were online froze. The same goes for natural gas wells and pipelines, leaving generators running out of fuel.

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Warren Buffett’s Berkshire Hathaway Inc. offered lawmakers an $ 8.3 billion proposal that called for the construction of 10 gigawatts of gas plants and emergency gas storage to ensure Texas has enough backups. Starwood Energy, a developer of power plants, has come up with a similar plan.

Short-term dressings

Lawmakers rejected both ideas, saying they would disrupt the deregulated structure of the state’s electricity market. The proposals also met with opposition from large state-owned manufacturers and competitive power producers.

Texas has long been the only state in the continental United States with a power grid almost entirely separate from its neighbors. Adding connections to Louisiana, Oklahoma, or other adjacent states would allow Texas to bring in additional power when needed, but it would also lead to increased federal oversight. Lawmakers have never seriously debated the issue.

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Ultimately, none of the proposed laws do anything to prevent another energy crisis like the one that hit Texas in February, said Ed Hirs, an energy researcher at the University of Houston.

“These are short-term dressings that don’t address the biggest problem in the Texas electricity market,” he said.

Even bills requiring power plants, pipelines and gas wells to be weatherproof did not go far enough, critics said. They argue that the proposed fines ($ 5,000 per day for most violations) are not high enough to enforce the changes and say there are no time limits for energy companies to comply.

“This bill will lead some to invest in measures to protect against extreme temperatures,” said Luke Metzger, executive director of Environment Texas. “But loopholes and low fines will likely drive many gas wells and power plants to do nothing. “

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