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The Texas Grid Balancing Act

Updated: Apr 6, 2022

The lights had verily gone out in Texas when the “finger pointing” started happening. As with any disaster, politicians, special interest groups, and various people worried about keeping their executive jobs are trying to score points to push their agendas. Hopefully, cooler and more intelligent heads will prevail, and sound logic-based questions will be asked in upcoming weeks and months so we get better and not worse.

There are four key players in this scenario:

1. The government (or PUC)

2. ERCOT (the regulator)

3. The electric utilities

4. The rate payers

In reality, there is always a “balancing act” between these four players in regard to power generation and distribution.

- Government (PUC) wants to ensure a balance across all the requirements.

- ERCOT (regulator) wants to ensure low-cost reliable energy

- Electric utilities want a fair return on their services and investments

- Rate payers want the lowest rates and the highest reliability

Texas went through a freezing weather situation last week that hasn’t happened to the state in modern history causing blackouts essentially “breaking” this balancing act now causing all sorts of reactions – some good and some not so good. But we can be certain of one thing, aAny major changes made to the electric grid will require capital projects which in turn will be reflect in higher rates.

All decisions made, going forward from here, will impact one or all four entities of this balancing act. It should be made noticeably clear to the rate payers of Texas that there are “no free lunches”.

Before over-reacting, I think several key questions must be asked and answered:

1. Do you design a system for a “once in hundred years” event or do you remove this extreme data point?

2. Is climate change a root cause and do we have enough data points to justify a significant change to this balancing act?

3.Is the Texas rate payer willing to pay significantly higher electric rates to ensure this does not happen again knowing the answers to #1 and #2 above??

4. Should we instead focus changes and funding on upgrading existing buildings and building codes to better standards that would prevent this from happening in the future?.

We must not act politically or with haste losing site of the data and facts in front of us. Hopefully realistic, intelligent and sound decisions will be formed actions based on sound engineering principals and economics will be the path forward.

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