Winter Storm Uri was a predictable tragedy based on years of overinvestment in unreliable generation and underinvestment in reliability measures in the Texas electric grid. The success of the ERCOT market going forward will hinge upon addressing this imbalance.

Key points

  • While the weather during Winter Storm Uri was unprecedented in recent Texas history, the problems experienced by the electric grid were predictable based on years of overinvestment in unreliable generation and underinvestment in reliability measures.
  • More than $60 billion in capital investment has flowed into wind and solar generation since the outages in 2011, and those generating resources produced less than 1 GW of power at the height of Winter Storm Uri on the night of February 16, 2021.
  • While weatherization and other measures to improve the winter availability of gas and coal generators are necessary, those measures are counterproductive if not done in concert with market reforms that properly compensate those generators for their greater availability relative to wind and solar generation
  • Any new measures the PUC takes to procure or incentivize more backup generation should be paid for by generators that are causing the need for the extra backup power. Requiring ratepayers to pay for those costs will fail to fix the imbalances in the market and lead to spiraling costs.
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