The Dallas Morning News

Texas needs insurance against deadly blackouts

Berkshire Hathaway says it will put its money behind plan to fix electricit­y grid

- By CHRIS BROWN Chris Brown is chief executive of Berkshire Hathaway’s BHE Infrastruc­ture Group. He wrote this column for The Dallas Morning News.

As one of the state’s largest employers, with more 80,000 Texas associates across companies like BNSF Railway, Star Furniture and Mclane grocery and foodservic­e, Berkshire Hathaway saw and felt deeply the terrible impacts of February’s catastroph­ic blackouts as they hit our employees and the Texas communitie­s we serve.

Berkshire Hathaway Energy’s leadership team immediatel­y made it a priority to find long-term solutions for electric reliabilit­y. We put our best and brightest minds to work and quickly concluded that a comprehens­ive, belt-and-suspenders approach was needed.

Some of the necessary fixes were already being talked about and are moving through the legislativ­e process, including weatheriza­tion of power infrastruc­ture and better emergency communicat­ions. But what became clear to us and other experts is that, based on simple math and common sense, a Texas emergency power reserve is needed and is the least expensive, most effective way to ensure Texans never again face catastroph­ic blackouts.

First, it’s helpful to understand the solution Berkshire Hathaway Energy has put forward to prevent future prolonged blackouts. The company has proposed 10 new gas-fired generating units that would be available to run during times of emergency. This power would effectivel­y act as blackout insurance, ensuring that future extreme hot or cold weather does not cause blackouts of longer than three hours.

Next, the costs. Berkshire Hathaway Energy will invest $8.3 billion in the project, with up to $4 billion ($1 billion per peak season) paid to Texas if we fail to deliver. So what does this mean for Texas residents? Over the life of the project, for the average Texas resident, the cost of the project would be around $3 per month.

That isn’t an insignific­ant amount of money, but it is considerab­ly less than most of us pay to insure things like our cars or houses.

It’s also worth noting that the actual cost will likely be lower due to the unique structure of the project as proposed. This is because any time the emergency plants run, 100% of the profit they earn goes right back to ratepayers. Since the generators will need to run at least 14 days per year for testing, customers will get regular rebates on their monthly electricit­y bills to offset the $3 charge.

By some estimates, this impact could cut the average monthly cost in half. What is more, if this project were operationa­l during Winter Storm Uri, it would have resulted in $9.4 billion in revenue that would have gone back to customers, assuming the plants met their power output potential.

That would have more than offset the $8.3 billion cost.

Another critical factor to consider is the benefits of this proposed solution compared to the costs. Most importantl­y, if this emergency power reserve were in place, Texans likely would not have to endure the tragic effects they experience­d in February.

By some estimates, this was also the costliest disaster in state history, with projected impacts to the Texas economy over $100 billion. Avoiding that type of harm is no small accomplish­ment. These financial benefits don’t even begin to touch upon the priceless benefit of avoiding the loss of over 100 human lives, or the health impacts thousands of others experience­d.

Ultimately, what Berkshire Hathaway Energy is proposing is transparen­t and provides accountabi­lity. Texans deserve both.

We all want immediate fixes to ensure a reliable electric grid. We believe the solution Berkshire Hathaway Energy is proposing, coupled with the fixes leaders in the Texas Legislatur­e are already working on, will ultimately help protect Texans from the kind of tragedies and suffering they experience­d in February.

 ?? Tom Fox/staff Photograph­er ?? Berkshire Hathaway Energy is proposing an $8.3 billion project to prevent Texas from facing future prolonged blackouts. Above, a driver made his way down State Highway 287 in South Arlington during February’s freeze.
Tom Fox/staff Photograph­er Berkshire Hathaway Energy is proposing an $8.3 billion project to prevent Texas from facing future prolonged blackouts. Above, a driver made his way down State Highway 287 in South Arlington during February’s freeze.

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