Texas Blackout: Let’s Not “Fire, Ready, Aim”

As has been exhaustively reported, the severe weather event in Texas and surrounding states in mid-February resulted in blackouts across the Electric Reliability Council of Texas (ERCOT) region, including blackouts for all but 90 minutes of a 59-hour stretch at my own home in Austin. Despite some initial claims motivated by animus against renewables, failures occurred across all generation technologies, as well as in gas and water infrastructure, and we can expect that there will be inquiries into the specific ways in which cold caused the Texas blackout.

Much public outcry has been sparked by the federal 2011 report about a less severe Texas winter storm that year. The report recommended weatherization for gas, water, and electricity infrastructure, but they were not made mandatory. Did we fail to learn from the lessons of 2011? 

It’s more complicated than that. Before deciding on a solution, we need to be clear about the problem. We must first investigate the facts of the recent storm. Among the things we don’t yet know about weatherization:

1. As far as I am aware, we do not know what fraction of electric generation and gas supply in ERCOT actually implemented the recommendations from the 2011 report.
2. Electric generators have a large number of sensors, pipes, and other equipment, and we do not know whether the specific equipment that failed in 2011 was the same equipment that failed this time.
3. In the gas-fired generation fleet, failures in both the generators themselves and in the gas infrastructure contributed to the outages. Was it gas or electric that was the more significant problem?

Should we have expected private asset owners to weatherize of their own accord? Each such asset owner, as any business owner, runs their operations on a cost-benefit basis. If weatherization improves their expected profit, they will do so. But when the public good is at stake, we can’t always leave risk management decisions to individual actors. In the context of a large “common mode” cause that affects many assets simultaneously as in mid-February, such private actions may be inadequate to appropriately address the risks from the community’s perspective. 

When we face risks due to rare events, like winter storms in Texas, whose probabilities may increase with climate change, we cannot depend upon individual asset owners to make risk-averse decisions for the sake of community health and safety. We will likely need to impose regulations and standards to improve extreme weather resilience.

These improvements are likely to focus on weatherization, and they may also include, for example, smart grid technologies to more equitably “spread the pain” of any future blackouts. There may also be market design changes.

But before “firing” on any such actions, we need to “ready” and “aim” by first understanding: 1) what exactly caused the system failure, and 2) what are the costs to avoid these failures or respond to them more effectively. If we truly want to protect our communities, the right actions require thoughtful fact-finding.

Here are several links to selected panel discussions I have participated in and interviews I have given about the Texas blackout. (I will share a comprehensive list next week):

Institute for Operations Research and the Management Sciences (INFORMS) panel with Professor William Hogan (Harvard), Professor Shmuel Oren (Berkeley), Dr. Richard O’Neill (ARPA-E), and Professor Benjamin Hobbs (Johns Hopkins). Click here to view.

Salem Centre for Policy, UT Austin McCombs School of Business panel with Professor Sheridan Titman (UT McCombs), Ms. Bernadette Johnson (Enverus), Ms. Becky Klein (Klein Energy LLC), Professor David Spence (UT Law and McCombs), and Professor John Butler (UT McCombs). Click here to view.

“The Electrical Power Crash Is Just Like a Stock Market Crash,” by Peter Coy. Bloomberg Businessweek. Click here to read.