Bloomberg Businessweek - USA (2021-03-01)

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means it’s unable to pull power from
neighboring states in times of crisis. In
1999 the state went further, passing a
law that deregulated its power market.
The effects of that decision are visible
today. Drive anywhere in Houston, and
you’ll see billboards from power com-
panies competing to one-up each other,
advertising free electricity on nights or
weekends, for instance. One especially
enterprising provider, Griddy, offers cus-
tomers the chance to pay the wholesale
rates utilities pay themselves.
Under the same 1999 law, Texas
declined to implement a forward- capacity
market, a system common in other states where power has
been deregulated that’s designed to ensure power plants have
adequate resources to meet future demand. Lawmakers saw
for going the market as yet another way to keep rates low.
Having connections to other states or a functioning
forward-capacity market could have helped a little in
February, but even a more conventional energy system
might not have saved Texas. “If $9,000 per megawatt-hour
isn’t enough motivation to supply power, then I don’t know
what is,” said Daniel Cohan, a Rice University environmen-
tal engineering professor. The bigger problem, according to
most experts on the state’s energy system, has to do with
thermodynamics. Texas’ energy infrastructure simply isn’t
built for cold temperatures.
The freeze-offs that shut down shale fields were just the
beginning of the disruptions. Compressors, which push gas
into pipelines, were too cold to function— and that’s if they
had power at all. As demand for electricity spiked, utilities
diverted power to homes and hospitals, leaving the oil fields
unable to thaw frozen equipment. As one executive of a big
independent shale producer said, it was a death spiral. There
was no gas to produce power, and no power to produce gas.
Gas accounts for a little more than half of the state’s
electricity production, but it wasn’t the only power source
affected. About an hour southwest of Houston, a feedwater
pump leading to a reactor at the South Texas nuclear power
plant tripped, causing one of the two reactors to shut down.
And though the viral windmill photo was fake, the problems
turbines faced were real. Like airplane wings, turbines don’t
work when they’re covered in ice, and wind farms in West
Texas, unlike those in North Dakota, generally don’t have
de-icing technology. A full week before the crisis reached
its peak, ice had begun forming on the blades at one Texas
wind farm. By the middle of the day on Feb. 9, it stopped
producing energy. Even coal plants, normally seen as reli-
able, were not immune. Coal-fired generators need to heat
water into steam to spin their turbines, but the water at some
plants wasn’t insulated from the elements and began freezing.
Maybe some of the plants that were down for maintenance
could have come back, but most of those were forced to stay


offline. That’s because plants and substations have to be in
sync with the rest of the system. Starting up a plant early can
lead to a “cascading outage,” said Matthew Gomes, director
of development at solar company Origis Energy USA Inc.

O


n the evening of Feb. 16, I lost power. It was cold, but
bearable. I live in an apartment, and big buildings retain
heat better than single-family homes. I don’t think my unit ever
got below 50F, but many people in Houston could see their
breath in their living rooms. Others kept warm using camp-
ing stoves indoors or sleeping in their cars, leading to numer-
ous deaths from carbon monoxide poisoning. There were also
cases of exposure, including a man who was found dead on a
median and a sixth-grade boy who never woke after his family’s
mobile home in the Houston suburbs lost electricity. Warming
shelters saw their own electricity falter.
Wednesday morning brought a new crisis: water. Treatment
plants weren’t operating at full capacity, and water pressure
was so poor that the system was vulnerable to bacteria. Major
cities, including Houston, told residents to boil water before
drinking it. But you can’t boil water unless you have a gas stove
or electric power—and many Texans, including me, had neither.
My parents in Austin had no water at all. I drove to a gas station
down the street to top off my tank and sent my boyfriend in
for snacks and a few extra bottles of water. He came back with
some jerky and Takis chips, but the water was already gone. By
that afternoon, my folks were melting snow to flush their toilets.
The oil executive I talked to had used an actuarial term to
describe the sudden freeze—“a three-standard-deviation event.”
Others have called it a 100-year storm, though it’s hard not to
wonder if such events might occur more often now. Scientists
are still studying whether extreme cold spells could become
more common as weather patterns shift with climate change.
“The question for everybody, and that’s all players—whether
it’s independent power players, natural gas producers, regula-
tors—is: To what level of reliability should you build?” said John
Arnold, a Houston philanthropist who got his start at Enron and
later founded a successful hedge fund. “To what level of reliabil-
ity does one build a house? Do we weatherize the pipes, even
though it adds cost, to save yourself during the one-in-every-X-
number-of-years event? Do you buy a generator?”
Michael Webber, a University of Texas at Austin professor
who specializes in energy and who serves as the chief science

People wait to enter an
Austin grocery store on
Feb. 16
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