The most recent Arctic blast, happily, was a non-event for the ERCOT grid. It was bitter cold, but nowhere near what Texas saw during Winter Storm Uri in 2021, and there was very little snow or ice. 

But what about when we get the next Uri, or worse? We’d do better than we did in 2021, mostly because power plants are in better shape because of new PUC rules. We also have a lot more solar and storage on the system than we did then — as we just saw, that helps a ton.

But it’s highly likely that the current system would experience rolling outages under Uri-like conditions. The gas supply system, as just one example, is still extremely vulnerable to extreme winter weather….

Each winter storm has its own personality; this one was more akin to Elliott (December 2022), but so far and as I wrote last Friday, nothing like Uri.

The lack of widespread snow or ice — and the temperatures in the teens instead of single digits — have been the big differentiators up to now. Here are my big takeaways and what to look for tomorrow:

Texans — me included  — have collective PTSD from Winter Storm Uri. Every time it gets cold, we get worried, and with good reason: the grid is not yet reliable enough, and another Uri almost certainly would cause rolling outages.

But the Arctic blast that will hit next week, while extreme, does not appear to be as severe as Winter Storm Uri. It’s very important to note that forecasts and conditions can change quickly, especially with climate change. But for now, this looks more like Winter Storm Elliott in December 2022 — which did not cause rolling outages — than Uri in 2021, which did.

Further, as I’ve written before, another Uri hitting now would almost certainly not produce outages of the magnitude and duration we saw in 2021. In the wake of Uri, the legislature and PUC passed the most basic grid reforms — like requiring the registration of critical natural gas infrastructure and weatherization of power plants. It’s not nearly enough, but coupled with market-driven increases in solar generation and energy storage, a Uri-like storm would probably be less destructive today…

Texas energy consumers need relief, and they aren’t getting it from ERCOT. 

Over and over, the agency’s policy choices have drifted toward the expensive — policies all-but designed to run up power bills — and away from cheaper, more effective solutions that protect consumers and the grid.

This ideological recklessness inevitably ran up against the state’s Independent Market Monitor (IMM), a position created to ensure that Texans are represented and protected when ERCOT market changes are made. The battle between ERCOT and the IMM has been steadily building for months, and it will likely crescendo tomorrow at the ERCOT Board meeting. 

I don’t think either side is 100% right. It’s complicated. What’s not in question is that billions of dollars are at stake in this spat, as are key aspects of grid reliability. It all comes down to ancillary services — backup energy reserves that help determine whether the lights stay on in Texas… 

Power grid operators need flexible and dispatchable resources, especially when grids are under extreme stress or emergency conditions. The worse the conditions, the greater the need for flexible resources. 

There’s no energy resource that’s more flexible or dispatchable than batteries. They can respond in sub-seconds and fulfill a variety of grid needs. 

So why on earth is ERCOT trying to slow down battery deployment?

Last month, the ERCOT Board unanimously approved a protocol revision request (ERCOT’s version of a rule change) requiring batteries to maintain a state of charge at all times. Batteries, of course, are meant to be depleted and recharged; ERCOT’s rule would force them to always have more juice, even in dangerous conditions — times when Texans desperately need it.

“ERCOT is trying to make batteries look like and act like coal plants,” Commissioner Glotfelty wrote in a memo that injected some common sense into the discussions of ERCOT’s protocol revision request (known as NPRR 1186). 

Commissioner Glotfelty suggested to ERCOT CEO Pablo Vegas back in August that the proposal would increase costs for consumers and create reliability problems; he suggested ERCOT to go “back to the drawing board” on the proposal and to “not pass it at the next Board meeting.” ERCOT ignored that advice — the politically appointed board unanimously passed a protocol revision that somewhat eased the heavy handed regulation of batteries but would still force batteries to hoard electricity when Texans need it. 

And so, three months later, the PUC was again left to express its displeasure with a regulation that would discourage investment in a dispatchable power source that Texas desperately needs…

On the evening of September 6th, the ERCOT control room was tense.

Texans were close to the first summer rolling outages in more than a generation. Frequency had dropped precipitously, even though ERCOT thought they had enough generation online. Batteries dispatched just enough power to the grid to keep the lights on across the state.

As I wrote the day after, it’s likely ERCOT made a mistake that evening. Much more importantly, it’s likely they could avoid the same mistake next time. It’s critically important that ERCOT learn from the experience and improve their operations.

Unfortunately, that doesn’t appear to be happening.

Last week, on the day before Thanksgiving, ERCOT released its self-assessment on the incident. The agency gave itself an A+. No one should get to grade their own papers; a third party needs to review ERCOT’s actions on September 6 and make recommendations to ensure the right lessons are learned.

In early October, ERCOT told us there was a one-in-seven chance of rolling outages in December. Not great.

ERCOT’s response: Try to buy 3,000 megawatts of additional capacity in time for January and February, principally from retired coal and gas plants. 

It was an audacious and bizarre move. CPS Energy CEO Rudy Garza said publicly what many others said privately: there was no way to get that much additional power online so quickly, especially from plants that had been shuttered for years. A majority of Public Utility Commission (PUC) members worried it wasn't even legal: ERCOT based its authority to spend an unspecified and unlimited amount of money on its own protocols, not statute or PUC rule. 

But as ERCOT saw it, desperate times justified desperate measures. The agency issued a Request For Proposals (RFP) asking for two different forms of capacity: decommissioned power plants, and 6-hour duration demand response. It was clear from the beginning that neither of these categories was likely to deliver much capacity. Decommissioned power plants, in many cases, lacked critical parts and components to operate (at least 30% on a capacity basis hadn’t operated since 2018). And while demand response can play a critical role filling gaps for a few hours at a time, six hours is unrealistic.

So when ERCOT announced on Friday afternoon that they’d canceled the RFP, very few energy observers were surprised.

What was mildly surprising: ERCOT’s press release stating the agency didn't expect any problems this winter. Everything is fine, nothing to see here — forget about last month, when ERCOT told us things were so bad that the agency needed to go way, way outside the bounds of normal procedure and spend as much as $1 billion to procure capacity. (This is not the first time ERCOT sent mixed messages.)

Which is it? Are there major problems that call for extraordinary measures? Or is everything fine? It can't be both. 

In fact, on Nov. 1, ERCOT said there is a one-in-six chance of outages in January, and a one-in-five chance of emergency conditions, worse than what the agency previously projected. Worse still, those probabilities are based on last December’s Winter Storm Elliott, not conditions during Winter Storm Uri in 2021. If we do see another Winter Storm Uri next year, the likelihood of at least some rolling outages is probably close to 100%…

It was impossible not to feel the tension in the room during last Thursday’s PUC open meeting. 

The commissioners considered several controversial proposals, all of which will raise consumer costs.  

Everyone agreed consumer costs are going up. The disagreements on the Commission — and between several commissioners and ERCOT — focused on how to increase grid reliability, how much additional cost is acceptable, and whether there will be clearly defined limits to those costs.

Remember “Guardrails”?

Commissioner Will McAdams was looking for the “guardrails” that became a consumer-focused mantra during the legislative session. 

Less than six months ago, the legislature approved a controversial proposal to increase payments to thermal generators through a so-called Performance Credit Mechanism. But legislators also added a PCM cost cap of $1 billion to protect consumers “less the cost of any interim or bridge solutions.” 

Last week, McAdams argued that ERCOT’s proposed procurement of decommissioned or “zombie power plants” constitute a bridge solution and thus should count against the $1 billion cap…

There's virtually no chance that Proposition 7 will fail. Constitutional amendments rarely do. Still, it's important that voters know what’s on the table — and, if it passes, what’s coming.

Prop. 7 would allocate $10 billion to the Texas Energy Fund, of which $7.2 billion would go to subsidies and low interest loans for new thermal plants in ERCOT, plus $1 billion for new plants outside of ERCOT. The other $1.8 billion will help pay the cost of microgrids that will provide backup power at critical facilities.

The PUC held a workshop Friday, and while I've never watched a Politburo meeting, they likely have a similar feel. 

Electric companies lined up and, one after the other, said they're "ready for winter." When one company representative failed to say the scripted magic words, he was reminded by the PUC Chair of his omission, to which he replied, "We are preparing, and we will be ready."

Feel better? Me neither.

The Biggest Problems Weren’t Even Discussed

Beyond the sheer annoyance of repetitive, performative, perfunctory attestations, the meeting didn’t address some of the most important issues Texas faces this winter. There was not a single mention of the definitive post-Uri report or its 28 recommendations made two years ago by the North American Electric Reliability Corporation (NERC) and the Federal Energy Regulatory Commission, several of which have not been acted upon at all…

Today, the ERCOT Board will hold its first meeting since the end of the summer — a summer in which consumers were asked to conserve energy 11 times.

It's also the first meeting since September 6, when ERCOT was perilously close to rolling outages.

ERCOT staff prepared a summer operational and market review, ostensibly to give the board — and, presumably, Texans — a clearer picture of what happened but it obscures more than it reveals.

Much of what is wrong with ERCOT is clear in the review’s two dozen slides.

It starts with a lack of transparency. The ERCOT slides that cover the September 6 incident still don’t clearly demonstrate how the agency’s own mistakes likely compounded problems that day. The slides also completely dismiss the serious problem of thermal plant outages. And the presentation doesn’t mention at all the transformative role that the state’s growing solar resources played in keeping Texans’ air conditioners humming during the summer’s relentless dangerous heat waves…

Texas policymakers have consistently neglected demand side solutions. They talk about them but they haven’t done much of anything to reduce demand even though it’s been obvious to everyone paying attention that demand side solutions are necessary.

The latest example broke last week. ERCOT is trying to find 3,000 megawatts of “zombie power plants” to bring back from the dead. 

It’s clear that this isn’t adequate. The CEO of CPS Energy, the utility with several of the units ERCOT wants to bring back from the dead, said as much: “It’s been five years since we’ve run it. There’s no way we can bring it back in four months.”

Texans won’t have a reliable grid until leaders prioritize demand reductions at least as much as additional supply…

We’re living through a period of extraordinary change. Texas is seeing profound shifts in the ways energy is produced, the amounts of energy being consumed, and the climate’s reactions to what we’re doing and what we’ve done. 

These changes are transforming our economy, our lives, our quality of life, our communities, our planet … everything. But state leaders aren’t keeping up.

Hockey great Wayne Gretzky famously said, “I skate to where the puck is going, not where it has been.” ERCOT, the PUC, and state legislators too often skating to where the puck was years or decades ago. 

That’s not true with everyone and everything, certainly. Some folks within these institutions understand the scale and pace of change that's happening. But too many do not, and policies too often look backward instead of forward…

Last month, the Republican County Judge of McMullen County — a county that gave Trump 90% of its vote — pleaded with state leaders to deny a permit to expand a coal mine. It didn’t work; despite record gas production and the phenomenal growth of solar and storage, the San Miguel Electric Co-op (SMEC) will expand coal mining in Texas.

The County Judge (Texas’ title for the county chief executive) and the Mayor of Three Rivers both warned that the pollution from the mine’s coal ash and other toxic waste would poison groundwater and make parts of the county unlivable. “Our communities,” they wrote, will “lose their ability to exist.” 

The Railroad Commission approved the permit anyway. 

Coal is an expensive, dirty and dangerous electric generating source that communities don’t want — the Ford Pinto of electric generating sources (except at least Pintos were cheap!). Competitive companies have a hard time attracting enough capital to expand a coal mine, especially one that would feed an uncompetitive coal plant.

But when a company is a monopoly built on captive ratepayers — as SMEC and its sister co-op the South Texas Electric Cooperative (STEC) are — it’s easier to get away with bad ideas and inefficiency.

And in too many Texas communities, rural electric co-ops are trying to get away with mining and burning coal…

Did ERCOT’s actions lead to emergency conditions? And given these persistent grid problems, where do we go from here?

Things got a little tense on the Texas power grid last night. It looks like electricity could get tight again tonight and tomorrow — ERCOT has already issued another conservation call for this evening, though everyday Texans, unlike big businesses and crypto miners, won’t be paid for reducing their use.

Yesterday, ERCOT sent out its conservation call at 4:55 p.m. Then, at around 7:10 p.m., frequency — which must stay at or near 60Hz — dropped all the way below 59.8 hz in about 15 minutes. Were frequency to drop much lower and remain there, ERCOT would need to implement rolling outages to prevent the entire grid from collapsing.

It’s still unclear what caused frequency to drop this far, this fast — we’re hamstrung by ERCOT’s reluctance to share reliable, transparent information, and its insistence on blaming renewables for any issues remains a serious problem…

It was a white knuckle night in the ERCOT control room. On Thursday, August 17th, reserves on the ERCOT grid dropped below 3,000 megawatts — less than 4% of the total system demand at that point — and got close to the 2,300 megawatts that would require ERCOT to declare emergency conditions.

The same night, industrial-size batteries put 1,800 megawatts of power — more than double the previous record — onto the grid when reserves reached their lowest point. Without batteries, ERCOT probably would’ve declared an emergency that night. We were very close to the edge.

The same thing happened four times over the next week or so: storage put between 1,100 and 1,325 megawatts of power onto the grid between 7:15 - 8:30 p.m., right as reserves reached their nadir on August 20, 23, 24, 25, and 29 — all days when ERCOT issued conservation calls.

These hot summer nights show the vital role that storage should play on the grid, filling the gaps in those moments when demand threatens to overtake supply. The amount of storage on the grid has mushroomed in recent years — and much, much more is on the way.

So is ERCOT opposing its expansion in a key ancillary service market?

In all of Texas government, there are few lists as consequential for everyday Texans as the PUC’s set of priorities. How the commissioners spend their time — and Texans’ money — will partially determine how much we pay for electricity and whether we’ll have power during life-threatening heat and cold.

A recent filing gives us some insight into how commissioners plan to spend the hectic upcoming year. Staff has laid out legislative deadlines and agency priorities through the end of 2024; it includes utility resilience plans, changes to the way reliability is defined, the creation of a new backup reserve service, continued electric market reforms, and more.

But it’s also critical to look at what’s not on the list. Three factors contribute most to rolling outages: extremely high demand, high gas and coal plant outages, and low clean energy output. If it’s just two of those, Texas is probably fine; if it’s all three, watch out. 

Of the three, the easiest, cheapest solutions, by far, work to reduce demand or make it more flexible when energy is tight. A new report from the American Council for an Energy Efficient Economy (ACEEE) shows that building on existing programs, the PUC could reduce summer demand by 10-20% and winter demand by as much as 20-30%. 

But the PUC has done barely anything al all to tap into them. And even though electricity keeps getting tight in Texas — ERCOT issued a conservation call on Thursday and another on Sunday, and a third is likely to come later today — major demand-side policy is still not on the agenda. 

Let’s say, not entirely hypothetically, it's Sunday afternoon in the middle of a months-long, hellish heat wave. Several coal and gas power plants, overburdened by the oppressive heat and Public Utility Commission and ERCOT policies requiring them to run even when they aren’t needed, have tripped offline, and the grid is in danger of seeing demand exceed supply, which could lead to rolling outages. 

If you're the grid operator, what do you do?

Let me present two different scenarios.

Scenario #1: Too Real

At 4pm, you issue a call asking Texans to voluntarily conserve energy from 7–10pm. You hope this will help moderate demand, but you don't know if it will. Indeed, since you just called for conservation three days before, it’s possible that people will be put off by the request to cut back again and will decide to use even more. That’s not even necessarily an illogical or mean-spirited decision; if the grid doesn't hold, they might figure they’d be more comfortable if they can cool down the house as much as possible before the power goes out — especially if they don’t trust you to keep the lights on. 

But anyway, you make the conservation call, and the grid keeps running. Data might show, say, that demand dropped 3.2% in the first hour of the call — less than it did the day before (a 3.4% drop on Saturday) at the same time, without a conservation call. 

So your conservation call either didn’t do anything, or it backfired. And you’re left wondering, what if this happens again? What if the temperatures are higher when folks go back to work? What if more power plants trip off line?

As you may have gathered, this isn’t hypothetical — it’s what played out on the state’s grid over the weekend…

When we’re young, we grow. We add inches and pounds and that’s still unambiguously great. 

As we grow older, we seek out other kinds of growth — intellectual, social, spiritual, and emotional. We may want to learn a new language, travel to new places, and acquire new knowledge and skills. We’re probably glad for growth in our bank accounts, less-so in our waistlines. 

The key is defining what kind of growth we want.

ERCOT could use that kind of clarity right now.

If you’ve heard ERCOT CEO Pablo Vegas speak in the past couple of months, you’ve probably seen this graph. It shows massive growth in the state’s peak power demand. Politicians often say that’s a good thing: it shows Texas is growing with more people, companies, and economic opportunity.

Note, though, that chart shows peak demand. That’s not the growth we want at this point. Meeting peak demand is expensive and inefficient. Many generating resources, often high polluting ones, are kept around — and paid — just to be available for a few hours. 

There’s a better, cheaper, and more effective way to serve the state’s growing economy. That starts with shaving off those peaks without compromising economic growth.

Texas seems to beat three records on a weekly or even daily basis this summer, regularly setting highs in temperatures, electricity demand, and solar generation. 

We are, in other words, Ground Zero for the problems that the Inflation Reduction Act seeks to solve and the benefits it seeks to create.

A year ago, Congress passed and the President signed the Inflation Reduction Act, which provides at least $350 billion — and perhaps up to $1 trillion or more — in funding to increase electric reliability while lowering bills and emissions of all kinds, including greenhouse gasses.

Among the most tangible impacts of the Inflation Reduction Act: solar tax credits that are bigger and easier to monetize, and first-ever tax credits for standalone storage (batteries used to only get a tax credit if co-located with solar).

For this and other reasons, the IRA is probably the most consequential pollution-reduction legislation since the Clean Air Act of 1970. But as one of my favorite climate writers David Roberts likes to say, it’s actually industrial policy masquerading as climate policy. 

That’s because almost all of the tax credits are tied to domestic manufacturing. If it’s not made in America, you can’t get the full credit — or, in some cases, any credit at all. Because of this, manufacturers have scrambled to establish or expand American manufacturing. 

Over the past year, the organization Climate Power has been counting IRA-related manufacturing and economic development announcements across the country: the tally currently stands at $230 billion in new investment and more than 170,000 new jobs. 

In Texas, the IRA has spun off at least 14 projects representing 8,843 new jobs and $11.2 billion in investments…