ERCOT needs more
New leader for state’s grid manager is a good first step, but progress demands new philosophy.
There’s a new boss at ERCOT, and let us be among the first to say that’s a good thing.
Former president and CEO Bill Magness’ ouster just after the humanfueled failure of the state’s electric grid came not a minute too soon. Magness had lost the confidence of Texans.
He had company of course. Gov. Greg Abbott also removed two of the members of the Public Utility Commission, including its chair, in the weeks following Winter Storm Uri.
Whether the hiring of Brad Jones, an industry veteran named Tuesday as interim president and CEO, better protects Texans against a repeat of the tragic blunder that cost nearly 200 lives and by some counts more than $100 billion in economic losses is another thing altogether.
The failure to keep Texans’ lights — and their heat and water, too — on during the February deep freeze was about much more than just mistakes by people at the top. There were plenty of mistakes, all right, and given recent revelations that Abbott’s aides were present when some of the costliest ones were made, we still don’t know how far up the chain responsibility goes. But the biggest culprit in February’s debacle was the failure of philosophy, of the very idea so many who lead Texas wrongly believe makes our state so exceptional.
The idea is that regulation is for losers, and that businesses, not government, are nearly always the parties best suited to decide how and whether to operate safely.
Everyone knew, or should have known, that Texas energy suppliers needed to weatherize. Ten years ago, after an ice storm nearly canceled the Super Bowl in Arlington and knocked power out for thousands of customers statewide, federal officials told Texas that its grid was too vulnerable to the cold.
Many in the Legislature knew, too. Ten years ago, lawmakers, including Houston’s Sen. John Whitmire and then-Rep. Sylvester Turner, urged tough-minded reforms of ERCOT, the nonprofit that manages Texas’ grid, and the PUC, which oversees ERCOT’s board. Legislators studied and drafted and debated and ultimately rejected those reforms. What survived was a meager measure that required energy providers to file annual plans for how they would prepare for extreme cold.
That rule proved woefully — and obviously — inadequate. It was like asking heavy industry to file a plan for minimizing air pollution, but leaving it up to the polluters to decide what that plan should be and whether to comply with it.
It made Texans more vulnerable than they should have been to the deadly consequences of February’s failures. Did we mention already that at least 194 people died as a result?
The voluntary compliance regime wasn’t by accident. The reforms were killed on purpose — and in perfect accordance with the philosophy the Republican leaders who have governed Texas for roughly a quartercentury have embraced like a new kind of religion.
Like most dangerous creeds, the tenets of the Texas philosophy are simple and, at first glance, alluring: Keep costs as low as possible for employers, so companies (and their jobs) will move to or stay in Texas. Keeping energy costs low, and therefore free of regulation, is one way to reduce the cost of doing business.
Every state would like to attract and retain jobs, of course. But most insist on checks and balances that keep the welcome mat from being an invitation to exploitation.
When it comes to energy, that means some states have tied their grid to regional networks, in effect spreading the risks of outages. In many others, regulators insist that companies supplying energy for the grid take common-sense steps to prepare for emergencies. Like weatherizing on the off chance that the mercury dips so low that wind turbines freeze or natural gas plants shut down — or that demand for heat goes through the roof.
Abbott has urged the Legislature to require companies to winterize, a move we’ve called progress. But the legislation has passed only the Senate, and left unresolved is the question of who will pay for the improvements. The state? The companies? Ratepayers?
Whitmire told the board Tuesday he’s frustrated at the slow pace of progress. With Abbott and Lt. Gov. Dan Patrick still squabbling over what to do about the energy prices that surged during the storm, the rest of the agenda appears bogged down. “Texas is no better prepared today than it was before the storm,” he said. “We have fives weeks left, and the Legislature is still looking for a consensus.”
No new appointment will matter unless the GOP leaders who have governed for so long finally rethink the tragic Texas philosophy. It has left the state, and its people, dependent on private industry for safety, rather than on elected leaders who can’t seem to stop saying to industry of all types “pretty please, if you feel like it.”