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Saturday, February 27, 2021

ANALYSIS/OPINION:

The recent blackouts in Texas killed at least 80 people, left millions of ratepayers at substantial financial risk, and damaged thousands of companies and small businesses.

Who’s responsible? Unfortunately, there is no clear answer to that question.  


As this newspaper has noted, part of the problem was that all generation sources underperformed. On Feb. 15, in the state that prides itself on having the most wind generation in the nation, wind-generated electricity was operating at about 10% of its capability and it provided almost no electricity to the grid.

Nuclear operated at 80% of capability, coal operated at 63%, and natural gas-fired generation ran at about 62%, despite having some of its system freeze.

The other material element related to the blackout is that five gigawatts of coal-fired generation — enough to power 1.5 million houses — had been retired in Texas since 2016. The ascendance of wind power in Texas has come mostly at the expense of coal-fired generation, which as recently as 2014 provided one-third of the state’s electricity and now provides about one-sixth.

In short, the technological reasons for failure were lack of weatherization in the natural gas system, the inherent and understood limitations of wind power, and the possibly premature retirement of coal-fired generation.

But the real failure was the failure of responsibility and accountability. This disaster was not caused by hurricanes or earthquakes. It was caused by decisions of the state government and its affiliates in Texas across the last 15 years.

For years in the electricity industry, there has been a trend toward handing over more authority to operate the transmission grid to regional transmission organizations or independent system operators and reducing the role of traditional utilities and state utility commissions in the management of the electricity system.

The theory is that independent operators will run the system more efficiently and more fairly than utilities. That’s the theory.

We don’t really know if that is the fact, though. Despite years of experience with independent system operators, there aren’t a lot of economic or other data to suggest that they have saved money or run the system better than it was being run by the utilities. What we do know is that in places where the system is still run by utilities (mostly the Southeast), electricity rates tend to be lower.

What we also know is that these independent system operators make it very difficult to determine who is responsible and accountable for the reliable and dependable operation of the system.

In Texas, for example, the independent system operator is an outfit called ERCOT, or the Electricity Reliability Council of Texas. The board of directors is pretty much self-appointed. The governor, the legislature and the Public Utility Commission of Texas have nothing to do with who runs it.

It’s not just Texas. The largest regional transmission operator in the nation is PJM. It operates in 13 eastern states, including Virginia, Maryland and the District of Columbia, that are the home to 65 million people. No governor or state legislature appoints or even confirms anyone to the board of PJM. I doubt any elected official in those 13 states could name even one board member or employee of PJM.

It’s pretty much the same everywhere. If you live anywhere other than the Southeast, your electricity system is being run by people elected by no one, appointed by no one and accountable to no one.

In the last few years, we’ve had major blackouts in California and now Texas. In both instances, they were avoidable. They were not the product of earthquakes or hurricanes. They were the product of decisions made by those who manage the electricity systems. Decisions to not improve transmission lines (California), decisions to rely on wind rather than coal and not to winterize the system (Texas).

These decisions were sometimes made by elected officials, such as former Texas Gov. Rick Perry’s unwise decision to emphasize wind power rather than reliability. That’s fine; the ballot box always provides a measure of accountability.

But most of the time, the decisions were made by unelected, unaccountable system operators, like PJM. There’s no telling how those people — who are responsible –- are held accountable. 

There will be investigations over the next few months into the Texas blackouts. There is little doubt that the process, the conclusions and the eventual reports will follow predictable partisan lines. Both sides should examine who makes decisions about our electricity system and how the decision makers are selected and held accountable.

The next of kin of those 80 dead in Texas, the millions of ratepayers at substantial financial risk and the thousands of companies damaged by the blackouts deserve answers.

• Michael McKenna, a columnist for The Washington Times, is the president of MWR Strategies. He was most recently a deputy assistant to the president and deputy director of the Office of Legislative Affairs at the White House.


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