After spending quite a bit of time reading everything I could get my hands or Zoom on about the failure of the Texas energy grid, I learned a lot but also decided that I know what I don’t know, which is a lot more, and the jury is still out on the myriad of questions about causes and remedies. So I’ll be brief with some thoughts about it:
- Almost everyone can agree that the failure to provide adequate incentives and regulatory mandates to weatherize the system is a major problem that must be fixed immediately. We can discuss how to pay for it, but the fix needs to be urgent.
- Federal integration of the Texas grid is not a good idea, in fact, it’s pretty clear to me that federal regulations such as the tax credit system for subsidizing renewables are part of the current problem of market distorting policies.
- In the past, lawmakers have discussed requiring generators to develop a”capacity market”–a fleet of reserve power plants for emergencies–but could not agree how to fund it. Those discussions need to be back in the mix along with a kind of “rainy day fund” for energy.
- We should not abandon the model adopted in 1999 to deregulate the system, but market forces alone will not ensure reliability. An outlier event such as we just encountered must be, in effect, insured and underwritten.
- The Public Utility Commission should be given the authority and tools by the Legislature to regulate resiliency standards and manage the necessary trade-offs in public and consumer funding, with full accountability for performance.
- As we discuss and debate the causes of and solutions to the Texas energy crisis, we must avoid making the conversation about “global warming” or “climate change” and their possible impact or not. Let’s fix the immediate reliability problems and let the lab work and related discussions and lectures continue in the lab.
Obviously, this is more than a two-drink conversation, but the Texas Legislature has no higher priority than the state budget itself in this legislative session, and right now Texas, as the world’s energy capital, is feeling pretty embarrassed.