Texas slips close to another power grid debacle

A sudden and dramatic temperature drop earlier this month left residents in central and northern parts of Texas without natural gas service for extended periods of time. Reports detailing the incident have prompted Gov. Greg Abbott to address how energy companies in Texas prepare for and perform during future winter storms.

Dec. 28, the governor issued public letters urging an investigation into a gas utility provider for Texas’ central and northern regions. The letters — addressed to the state attorney general’s office and Railroad Commission (RRC) — accuse one specific gas company of failure to fulfill the promise of providing Texans with reliable service.

In the aftermath of the winter storm, over a two-day peak in demand, the north and central regions experienced a 19,000 megawatt drop in available energy according to ERCOT supply and demand updates. During that same timeframe, the increase in demand caused prices to spike from $50 per megawatt-hour to $3,700.

The governor’s letter also instructs the RRC to devise concrete measures for preventing similar incidents during future winter weather events. His requested mandates are intended to ensure natural gas providers are prepared to maintain reliable service, especially when turbulent weather heightens strain on the grid.

Officials with the state’s Public Utilities Commission (PUC) have suggested building new natural gas power plants to remedy future issues. However, this is one of several alternatives that have been suggested.

On Jan. 12, PUC commissioners are scheduled to meet and vote on how the agency will pursue the second phase of its effort to redesign the state market for utilities. Utility insiders are suggesting that, when combined with the upcoming critical vote at the PUC on Jan. 12 meeting, this vote could possibly be one of the most important decisions made since deregulation in 1999. This is a very interesting and dynamic period and citizens throughout Texas will want to monitor the proceedings in the weeks and months to come.