We watch a three-hour House State Affairs Committee hearing so you don't have to! Seriously, though, the future reliability of the Texas electrical grid is really starting to freak state legislators the fuck out. The watchword these days is "resource adequacy" -- bureaucrat-ese for "Remember those outages last summer and last February? If Texas utilities don't start putting steel in the ground, don't bother spending too much on perishables."
On hand to testify today were ERCOT chief Trip Doggett and Texas Public Utility Commission chair Donna Nelson. The problem, they tell us, is that the utilities aren't making enough money to want to invest in more power plants. And since ERCOT, the entity charged with maintaining electrical grid reliability, is operating a deregulated marketplace, that's nothing but free-market magic! See, natural gas sets the margin most of the time, and natural gas is dirt-cheap these days. Fantastic for us! Shitty for them.
There's no small amount of irony in the fact that we're having this discussion roughly 10 years after the state leg deregulated the market based on the begging and clamoring of (no, not you and me)...the industry. Free market competition was gonna lower prices and spur private investment in generation. But prices just went up, until recently. And nobody's* building anything lately. That leads us to exchanges like this:
"Bottom line for this panel," committee chair Byron Cook began, "is if we don't bring on more generation, you're not gonna be able to sit here and maintain the dependability of this grid in the future?"
"That's correct, sir," Doggett replied.
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But that's up to the free market, so pray to the gods (shareholders?). Be sure and pray to the rain god too. Power plants use a lot of water, and we're right in the middle of a big damned drought.
Or just pray to the public utilities. This is why I asterisked the statement that nobody's building anything. This is the second great irony: The very regulated system we abandoned, which emphasizes long-term contracts, prices averaged on all forms of power generation and ratepayer investment in power plant projects to promote reliability, seems to be working just fine.
Says the head of the Texas Public Power Association: "Municipal utilities are building power plants. We're entering into contracts with power plant developer that enable them to obtain financing to go ahead and construct and build new power plants."
Maybe they can save us from rolling blackouts, because it sure as hell looks like the deregulated generators won't.