If the February blackouts weren’t a wakeup call to the Texas Legislature, this week’s electricity conservation alerts — unheard of in mild April weather with demand nowhere close to peak levels — should make them bolt upright. It’s clear we desperately need market reform that prioritizes reliability, not just capacity.
Unfortunately, “Texas-style blackouts” is already replacing “California-style blackouts” in common parlance. Our leaders must act now to right the ship and keep our state — the energy capital — from becoming the laughingstock of the nation.
The problem is straightforward, if not simple: Our electricity market isn’t set up to value reliability. Thanks to decades of market-distorting subsidies and policies that favor building new capacity instead of ensuring we actually have enough electricity, slim-to-nothing reserve margins are becoming more and more common. In July 2020 I warned that had it not been for the COVID-19 shutdowns we would likely have had rolling outages. A month later, on August 14, 2020, I was almost proved right as we were dangerously close to a Level 1 emergency. It’s all but certain we’ll have them again this summer, if not earlier.
The cost — both financial and in lost productivity — of unreliable electricity shouldn’t be borne by Texans. Instead, it should fall on the generators that cause it.
We can no longer accept that wind and solar produce “enough” when their generation is so wildly variable, dependent on the weather, and often pitifully low. Wind and solar produced just 8% of our electricity on the day of the blackouts, at one point falling as low as 1.5% — yet activists trumpeted that renewables met expectations.
If one of my boys came home with a 2% grade on his test, you can bet I wouldn’t be pleased, even if the teacher only expected him to score 2%. It’s still a failing grade — and in the case of electricity, a failing grade Texans are paying dearly for.
Seventy percent of Texans agree wind and solar energy producers should be required to provide a consistent amount of electricity to keep the grid reliable, according to our own poll. My former colleagues in the Texas Legislature should unapologetically support bills to require reliable generation and place the cost on the generators that need it, not on Texans.
The Legislature should also end energy subsidies that distort the market and created this problem in the first place. For decades, wind and solar have received tens of billions of our hard-earned tax dollars in subsidies and tax breaks at the state and federal level.
Fossil fuels are subsidized too, but at a much lower rate. Oil and gas receive an average of 39 cents per megawatt-hour, while wind receives $18.86 and solar $82.46. With the average price of electricity last year just over $22, it’s not hard to see why wind and solar get an artificial advantage and more reliable thermal generators are crowded out of the market. It’s hard to make ends meet, even if your product is a better choice, when your competitors are able to pay their customers a large proportion of the time, as is the case with wind generators.
Regardless, all subsidies should be eliminated in order to allow the free market to function and properly value reliability.
The Capitol is also abuzz with talk of weatherization. These measures might be some help but shouldn’t be mandated. Our electric generators should be empowered to make the choices that best fit their customers and their business models.
Furthermore, even the most effective winterization measures won’t help inevitable summer demand — and could actually hurt. Understandably, technology that keeps plants warm in the winter makes them run less efficiently in the summer, when they don’t need any help staying warm in searing 100-degree temperatures.
Ultimately, weatherization will be little more than a Band-Aid on a gaping wound and should be viewed as an option to improve reliability, not a turnkey solution.
With just six weeks left in the 87th Legislative Session, time is running short. Without decisive action, more blackouts are not just possible, but inevitable. Texans deserve better — and the Legislature should act accordingly.
This commentary originally appeared in The Cannon Online on April 15, 2021.