Texas failed power grid- lack of regulation and cryptocurrency

File this under "Who Knew?" An echo report published in The New Yorker, by Rachel Monroe:  

So, let me get this right? Abbott has seized on a different strategy for shoring up the failed power grid?

Why Texas’s Power Grid Still Hasn’t Been Fixed!

In February, 2022: I woke up, in Marfa, Texas, to steely skies and tension in the back of my skull, a sign that the pressure was dropping and a cold front was moving in. Not that I needed to be reminded: the winter storm was all that anyone could talk about at the bank, at the post office, at the unusually busy liquor store. It would be the most significant statewide cold snap since Winter Storm Uri, last February (2021), which overwhelmed the electrical grid and left millions of Texans without power for days. “I can guarantee the lights will stay on,” Governor Greg Abbott had told an Austin television station in November; now he was back pedalling, saying that “no one can guarantee” that rolling blackouts wouldn’t be necessary. On Twitter, where “PTSD” was trending in Texas, people tweeted images of long lines and empty shelves at H.E.B grocery stores. This time, thankfully, the grid held up—not, however, because of any substantive change taken by state lawmakers.

Last year’s disaster stemmed from a confluence of extreme weather and systemic weaknesses. On February 10th, a severe and prolonged cold front moved into Texas. Within days, temperatures had plummeted thirty to forty degrees below normal, and stayed below freezing in parts of the state for nearly a week. Many natural-gas facilities—the largest source of electricity in Texas—were inadequately winterized and began to fail as wells froze and equipment seized up. On the night of February 14th, as temperatures dipped and Texans cranked up their electric heaters, demand surged beyond the worst-case expectation of sixty-seven gigawatts, as estimated by the Electric Reliability Council of Texas, which manages the state’s grid. The grid can typically generate around ninety gigawatts of power, but nearly half that capacity was inaccessible, owing in large part to the natural-gas failures. The disparity between supply and demand was extreme; to restore equilibrium, ercot ordered “load shed,” or intentional blackouts, for large swaths of the state.

The Energy Reliability Council of Texas may prove to be "unreliable"!

In the end, nearly five million Texans lost power, many for several days. The state reported that two hundred and forty-six people died as a result of the storm. (Other sources say that this is drastically underreported.) Some died of hypothermia, and others died trying to keep warm—from running a gasoline-powered generator indoors; from setting a fire that seems to have escaped the fireplace and burned the house down. In the storm’s aftermath, we learned that, as bad as things got, they could have been far worse. The system was so thoroughly overwhelmed that we were minutes away from an automatic shutdown of the entire grid, which would have taken months to get back online.

In the aftermath, Governor Abbott blamed the grid failure on renewable energy. (He later walked this claim back.) But iced-over wind turbines weren’t the villain. Wind turbines supply a fraction of the grid’s winter power supply, much less than the similarly icebound natural-gas processors. Instead, blame rested with Texas’s unique energy structure, and its lax approach to regulation.


In 1935, as the federal government moved to regulate electricity sales across state lines, Texas opted to fend for itself and avoid regulation. Uri also plunged Oklahoma into frigid conditions, and that state similarly struggled with frozen turbines and disrupted natural-gas processing. There were rolling blackouts there, too, but for a fraction of the population, and only for an hour or two at a time; Oklahoma, part of a multistate grid, could pull power from elsewhere. A decade ago, when a similar storm caused similar problems, the Federal Energy Regulatory Commission called on Texas to winterize its natural-gas facilities. But Texas’s grid, since it is independent, is not subject to federal oversight.

Sufficient winterization didn’t happen then, and not much substantively changed after Uri. Abbott called for legislative hearings about the grid failure, but, when it came to actually passing laws, the state legislature seemed largely focussed on issues that animated its Republican base: tightening the state’s restrictive voting laws; allowing unlicensed handgun carry in public, despite significant opposition from law-enforcement leaders and a majority of Texas voters; and enacting a ban on abortion after roughly six weeks, along with a trigger law that would completely prohibit abortion in the state if Roe v. Wade were overturned. I had the sense, watching the legislative session, of an enormous amount of energy being expended in exactly the wrong direction.

The legislature did pass a bill setting new weatherization standards, with regulations applying mainly to electrical plants. But natural-gas facilities, whose failure was a driving factor in last year’s crisis and in previous blackouts, were treated with much more deference. In Texas, the oil-and-gas industry is overseen primarily by the Railroad Commission. The state has no effective conflict-of-interest rules against regulators’ maintaining a financial interest in the industries that they oversee, and the elected members of the Commission regularly have business ties to the energy industry. Unsurprisingly, the Railroad Commission has been persistently reluctant to impose anything like fines or rules on one of Texas’s most powerful industries. It’s unclear what weatherization requirements natural-gas plants will have to meet by what deadline, and what, if any, enforcement there will be if they don’t comply. As Russell Gold pointed out, in Texas Monthly, winterizing all the wells in Texas would cost up to two hundred million dollars annually according to some estimates, equivalent to one or two days of revenue for the gas industry, which profited enormously from Uri-related price surges. Abbott claimed that necessary actions had been taken to shore up the grid. But, when temperatures fell below freezing in January, gas supply dropped by nearly twenty per cent in the Permian Basin, a key region for the state’s oil production. With even colder weather forecasted, residents began to panic; it was clear that winterization efforts are far from complete.

Abbott has seized on a different strategy for shoring up the grid: cryptocurrency. (!) After China banned the mining of cryptocurrency, last June, a number of crypto-mining companies established or expanded their presence in Texas. The state’s deregulated electricity market means that Texans pay some of the lowest prices for electricity in the country (at least, when extreme weather doesn’t distort the market), making the state a natural choice for cryptocurrency mining, which essentially converts electricity to money. Crypto-mining facilities in Texas already consume enough electricity to power several cities. By 2023, it is estimated that ercot will account for twenty per cent of the global bitcoin network, and, by the end of that year, the state’s crypto-mining facilities’ power demands may have increased by as much as fivefold. This would seem to be a questionable move for a place with a demonstrably fragile grid. But Abbott has aggressively courted crypto companies, arguing that the energy-hungry industry will make Texas’s grid more resilient by encouraging energy providers to build more capacity. That capacity hasn’t yet arrived. In the meantime, some crypto-mining companies have arrangements with ercot that allow them to benefit from the fragility of the system: when heightened demand sends electricity prices soaring, the miners agree to shut off their servers and get paid for funnelling power back into the grid. Last fall, Abbott met with Texas’s major cryptocurrency companies and asked them to help him get through the winter, according to reporting from Bloomberg.

Texans have good reason for internalizing the idea that state officials aren’t going to look out for our interests. The wait for a home generator is months long. A recent ad for the Ford F-150 Lightning, the electric version of the best-selling pickup, showed a house’s lights ominously flickering during a storm. But the menace doesn’t last long: a family uses the truck as a kind of battery on wheels, plugging it in to re-illuminate the house. The commercial struck me as an invocation of a distinctively Texan dream, or nightmare: a public utility that can’t be trusted; a gleaming forty-thousand-dollar pickup that can. Unfortunately, there’s a multiyear waiting list for those trucks. In the meantime, Texans can hope that the worst of the winter is over. If not, we can always huddle next to the crypto facilities, seeking whatever warmth can be spared.

Texas power grid crises continues: Governor Abbott's energy failures

The Texas Tribune echo report by Mitchell Ferman:

Why Texas's Power Grid Still Has Not Been Fixed? The New Yorker. 

Texas’ grid operator told a power plant to delay repairs ahead of a May heat wave. It was among six that crashed.

Climate change and other factors are shortening the window when aging Texas power plants can make repairs to run at full strength in hot summer months.

On Thursday (May 12th), Texas’ power grid operator told at least one power plant to delay its scheduled repairs and keep operating to help meet demand during hotter-than-expected May weather.

The next day, the plant went offline anyway when some of its equipment stopped working properly, according to energy giant Calpine, which owns the plant. Calpine declined to identify the plant.

By just after 5 p.m. Friday, the Electric Reliability Council of Texas announced that six power plants had gone down unexpectedly and asked Texans to turn up their thermostats to 78 degrees for the weekend and avoid using large appliances during the hottest hours of the day to reduce strain on the power grid.

“We had a scheduled major maintenance outage beginning Friday, May 13, but it was cancelled by ERCOT on May 12,” a Calpine spokesperson said in a statement, adding that May is a “shoulder month” during which power generators historically take power plants offline to do repairs and maintenance during cooler weather.

But this month has been warmer than most Mays of the past decade, leading to higher electricity demand and causing ERCOT to scramble to keep as many plants operating as possible.

Several other power plants broke down Friday and couldn’t produce electricity after agreeing — at ERCOT’s request — to postpone planned maintenance shutdowns, said Michele Richmond, who represents power plants across the state as executive director of the Texas Competitive Power Advocates.

That contradicts what the grid operator said Friday, when an ERCOT spokesperson told The Texas Tribune that maintenance delays did not cause any of the six power plant failures. 

An ERCOT spokesperson said he was checking on whether power plant repair delays requested by ERCOT led to Friday’s plant outages.

ERCOT’s public statement said that “six power generation facilities tripped offline resulting in the loss of approximately 2,900 MW of electricity” — enough to power more than 580,000 homes. “At this time, all reserve generation resources available are operating.”

The brief statement raised more questions than it answered and didn’t address the plants’ locations, whether they were all offline at the same time and why they unexpectedly failed. The weekend passed without major power disruptions, as several of the downed plants returned online by Saturday.

Richmond said ERCOT is “taking a top-down approach” in determining when to tell companies to delay needed repairs and “doesn’t take into account what these complex machines need to make sure they get maintenance done.”

“When you start to tell generators during the season they’re supposed to be doing maintenance that they can’t, then you’re trying to squeeze more out of plants than what is safe and reliable,” she added.

ERCOT approves planned maintenance requests from energy companies months and even years in advance because of the complexity of the work and the need to maintain a minimum level of generation capacity at all times.

Over recent weeks, portable toilets, tents and large cargo containers have been assembled at power plants across Texas for repair crews that allow the facilities to run at full strength during the hot Texas summer.

Dozens of contract workers at many sites erect scaffolding — some even bring in cranes to move heavier equipment — and take apart the plants’ turbines and fix rotating blades. Depending on the scope of the work, a plant can be down for days or weeks.

“Our companies want to be on in the heat of summer, our companies want to be on when customers need us to provide power,” Richmond said. “We also want to do it reliably and safely. Part of reliability of a power plant is taking scheduled maintenance to not only run safely but run at max performance, just like you don’t want to do maintenance on your car when you’re on a cross-country road trip.”

Daniel Cohan, a professor of civil and environmental engineering at Rice University, questioned how the power plants that have been forced to delay maintenance will perform when the worst of the Texas heat arrives this summer.

“I’m concerned with how hard those plants have been run and that maintenance has been deferred to run the grid conservatively,” Cohan said, describing ERCOT’s approach since last year’s freeze of having a larger cushion of power reserve available. “It remains to be seen how much more vulnerable that leaves us to summer outages.”

ERCOT released its forecast for summer electricity demand. The agency expects record-breaking electricity demand of 77,317 megawatts. ERCOT said it has beefed up the amount of reserve power available to the grid and it “is expected to have sufficient installed generating capacity to serve peak demands in the upcoming summer season.”

The Public Utility Commission of Texas, which is in charge of ERCOT, is considering a new rule that could shorten the maintenance season when plants can go offline for repairs. The new rule is based on a provision in Senate Bill 3, the state Legislature’s response to last year’s freeze, when millions of people were without power for days in subfreezing temperatures and hundreds died after a combination of cold weather and skyrocketing energy demand shut down power plants as well as the natural gas facilities that supply them with fuel.

Richmond said the new rule is flawed because it doesn’t outline specific metrics to tell ERCOT when a plant needs maintenance, which she said could be a problem with a shorter maintenance season.

Officials from multiple power companies contacted by the Tribune  questioned whether the rule would give them enough time to make necessary repairs during maintenance season because there are a limited number of qualified repair crews and they travel the country repairing power plants during the milder months of the year. The companies asked not to be identified because power plant outage details have not yet been publicly disclosed by ERCOT.

Cohan said Texans can expect to see hotter temperatures in the coming decades because of climate change, which will put more pressure on the state’s aging power plants.

“You need to do maintenance sometime, and we’ve seen our vulnerability to winter freezes and we know our peaks most often happen in summer heat waves,” Cohan said. “That really leaves it to the fall and spring as the seasons when you need to do maintenance.”

Disclosure: Calpine, Rice University and Texas Competitive Power Advocates have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.