Audio By Carbonatix
You might have already figured this out given the perennial threat of rolling blackouts and grid operator ERCOT’s own admission that, come 2013, there won’t be sufficient wattage to cover peak demand, but the state’s electrical grid isn’t the best. In fact, as the Texas Tribune reports today, it’s the worst.
So says the North American Electric Reliability Corporation, which knows these things. The report notes things like “Insufficient reserves during peak hours could result in emergency operating conditions, including the possibility of curtailing interruptible loads and even rotating outages of Firm loads,” but we already knew that. But look at Page 1 of the executive summary at the chart showing reserve margins. Notice how the bar for ERCOT is shorter than for everyone else. That means that Texas, more than even California, is on the precipice of outages.
Partly, that’s a result of demand, which has increased here more than elsewhere. Partly, it’s that power generators have been reluctant to invest in new capacity since the glut of natural gas has driven electricity prices down and because their Mack trucks weren’t sufficiently full of cash, a problem that was remedied recently when the Public Utility Commission raised the cap on wholesale electricity prices by 50 percent.
By way of an alternative explanation, take a look at Elizabeth Souder’s post on the Morning News‘ business blog summarizing a discussion at the Texas Conservative Coalition Research Institute’s Energy Summit. The question was how some state legislators planned to keep the lights on in Texas.
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“I don’t think it’s our role in the Legislature to keep the lights on,” said Rep. Jason Isaac. “It’s our role to let the free market itself to keep the lights on. What can we do to get out of the way.”
And Rep. Kelly Hancock: “When there is supply and demand the free market tends to answer the call. It is truly the free market that has made Texas the leading free energy state in the U.S.”
Which completely ignores the fact that the free market has failed to do precisely that, which is why we are scrambling so desperately to avoid widespread power outages. There are times, when electricity prices are soaring, when the free market does a fine job of satisfying demand. There are also, inevitably, times when prices drop and that doesn’t happen. The thing is, electricity is a utility, something indispensable to modern life that just about everyone uses. To say that the government doesn’t have a roll in making sure it is delivered reliably is absurd.
How to fix the problem? Throwing money at power companies is one way. Reducing demand is another. But allow me to put forward a modest proposal. Texas has an electrical grid problem, but it also has a Medicaid problem. State leaders are always bitching about how much it costs and how they just can’t afford to ensure poor people get medical care. When demand peaks this summer and threatens to overload the grid, how about we selectively cut power to the state’s charity hospitals? That would take some stress off the grid, and Medicaid patients would drop like flies. Two birds with one stone. The free market at work.
