Winter Is Coming

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Winter is coming outside thermometer
Last February, we had record low temperatures, ice, and snow over the whole state and a large portion of bordering states. As a result, we had record demand for energy (electricity and natural gas) from consumers and businesses. The week before the storm hit, ERCOT sent messages to providers and customers regarding the severity and projected impact of the storm, and the potential for short-term, rolling blackouts. You may recall Texas faced a similar storm in 2011, but it appears there were few improvements to the winterization of grid resources made as a result of that experience. In addition, Texas' generation margin (the excess capacity over forecasted load) is relatively low compared to other regions of the US.
The result: as extreme weather caused issues with natural gas and electric generation facilities, ERCOT was unable to dispatch power to meet a record load. When that happened, to maintain the integrity of the Texas grid, some load had to be “shed” to keep the frequency of the grid within normal operating tolerances (around 60 Hz.) All generation attached to the grid must be synchronized (i.e., matching frequency and waveforms). We were within 5 minutes of having to perform a “black start,” meaning shut everything down, and bring it back up gracefully. How long might that take? It could have been weeks.

By December 1, ERCOT required 855 Texas power plants and 59 transmission providers to provide winter preparedness plans; all transmission providers and all power plants met the deadline (except eight who represent less than 1% of generation capacity). The PUC and ERCOT have stated, “the lights will stay on this winter.” If they do, the key will be maintaining the supply of natural gas and improving coordination among all generation assets on the grid.

So, given all this, what should we do? The first thing is to review your plans. During the event, ERCOT raised the prices to curtail load, and some customers with plans pegged to the wholesale rate paid $9,000 per megawatt-hour (the PUC has since lowered the cap to $5,000 per MWh). The result is that it bankrupted some commercial customers (including some Co-op utilities) and resulted in power bills in the thousands for some residential customers. I recommend picking a plan that provides you with some savings but limits your exposure in case of another winter storm.
Also, aside from electricity, make sure your winterization plans include water, particularly if you have a home in a rural part of Texas. For some people, the power came on several days before they had access to clean water.

My level of optimism? I worked with utilities for many years and found most of them dedicated to the safe delivery of affordable and reliable power (but I also bought a Honda generator).

Have any questions about the Texas electric grid? Email and let me know. Happy holidays!