ERCOT, the Trenton Parking Authority and best practices
The Electric Reliability Council of Texas (ERCOT) has been at the center of the recent Texas power outage, which was triggered by a record-breaking winter storm that left more than 4.3 millions customers in Texas without power and in darkness and bitter cold for several days. The severe storm and freezing temperatures caused soaring demand and froze about 40 percent of the power grid’s electricity generating capacity which according to The New York Times, “forced the state’s power grid to the brink of collapse…. The strain revealed the vulnerabilities of a distressed system and set off a political fight as lawmakers called for hearings and an inquiry into the Electric Reliability Council of Texas.”
The crisis has caused many experts to call into question the state’s preparedness for such a storm and whether it was adhering to best practices. It has also raised question about ERCOT and whether what happened in Texas could occur in other states.
According to ERCOT’s website, it “manages the flow of electric power to more than 26 million Texas customers…. As the independent system operator for the region, ERCOT schedules power on an electric grid that connects more than 46,500 miles of transmission lines and 680+ generation units. It also performs financial settlement for the competitive wholesale bulk-power market and administers retail switching for 8 million premises
in competitive choice areas. ERCOT is a membershipbased 501(c)(4) nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature.” EPCOT’’s members include consumers, cooperatives, generators, power marketers, retail electric providers, investorowned electric utilities, transmission and distribution providers and municipally owned electric utilities.
Clearly ERCOT is not the same type of entity as either Public Service Electric & Gas or Jersey Central Power & Light, the firms that provide power in New Jersey. These entities are subsidiaries of publicly-traded diversified energy companies with shareholders that operate in a very heavily regulated environment.
In a February 19th article in Texas Monthly entitled “The Texas Blackout Is the Story of a Disaster Forehold,” Jeffrey Ball writes, “A wide cast of characters throughout Texas’s lightly regulated power sector appear to have failed to heed experts’ long-standing warnings,
notably in the wake of a similar series of outages almost exactly a decade ago. In February 2011, an ice storm struck the state, crippling power plants and forcing rolling blackouts. After that disaster, lawmakers and regulators studied how the state’s electric and naturalgas infrastructure needed to be shored up, as in other states, to withstand punishingly deep and extended winter freezes. Key recommendations from various experts were to require winterizing of ower-generating equipment and fuel-delivery infrastructure such as gas pipelines, and to provide for reserve generating capacity that is needed when demand surged or when some providers went offline. Both moves would impose somewhat higher costs and result in marginally higher electric rates. But they might have averted the much higher costs Texans now face for business disruption, broken pipes, flooding, and spiking electric bills—not to mention human suffering and death.”
Texas has a stand-alone power grid that’s deregulated. The grid is an island. The result is that it can’t import
power from other states when it’s most needed.
Further, Texas operates under a competitive pricing market, meaning it trades on supply and demand. Companies are trying to bring the cheapest form of energy to the market, which can come at the expense of building out more reliable back-up systems and infrastructure. The state is used to extreme heat and drought, but its infrastructure simply is not equipped to operate in extreme cold.
Texans need to decide whether the cost-benefits of having low energy costs are worth the risk of having an electric grid that is vulnerable to blackouts. The vast majority of Texans will be okay with continuing to operate its power grid as an island. Others will point out the potential devastating consequences of a really bad tail weather event that could trigger a total blackout which would bring the state literally to its knees, potentially for weeks or months before the power came back.
Clearly best practices would suggest that ERCOT officials should bring Texas power generators into a room and tell them that based on what just happened in Texas they must winterize their facilities in an era of extreme weather in order to prevent a complete energy system collapse, i.e., they need to better insulate pipelines and install heaters and de-icing equipment to try and prevent instruments and wind turbines from freezing. In all likelihood this is not going to happen as there is no requirement in Texas’s non-regulated environment that best energy practices be mandated and that the state’s energy suppliers must weatherize its power infrastructure for wintry weather.
The lack of adherence by ERCOT to best practices got me thinking about what has transpired recently with the Trenton Parking Authority and the workaround process used to fill the vacant position of Executive Director. Without making any accusations, whatsoever, with regard to impropriety, I think best practices would have suggested that a more robust search, should have taken place including listing the position with the New Jersey League of Municipalities job posting which receives 67,000 viewers each month by local government professionals, to avoid the potential appearance that anyone might have been given preference for the position.