Governor's letter to the PUC and lack of energy reforms on special legislative agenda part of packed, grid-related news week

Public Policy
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Gov. Greg Abbott, seated second from left, at his June 8 signing of ERCOT and other energy reform bills | twitter.com/GregAbbott_TX/

Another week passed with much discussion on how to make Texas' power grid more reliable, including a letter from the governor to the state's utility commission, but the situation appears no better with the bulk of summer still to come.

The week started with a letter from Gov. Greg Abbott to the Public Utility Commission (PUC) filled with directives for more reliable power in the grid that he declared last month was fixed. By week's end, Abbott was under fire for not making energy reform part of the Texas Legislature's first special session, and a former Texas state representative offered some advice amid claims the grid's power manager was operating on "phantom reserve margins."

The state can do better, former State Rep. Jason Isaac, now a senior manager and distinguished fellow in a Texas Public Policy Foundation initiative on energy, said in an op-ed published Thursday in The Houston Courant.

"We can't expect to be 100% secure from every possible risk, but we surely want to do better than barely scraping by," Isaac said in the op-ed piece. "With such a slim reserve margin, unplanned power plant outages or just days with little wind or sunshine could put us into a real emergency — this time with blackouts. Policymakers, regulators and all Texans need to wake up to the fact that these faulty reserve margin forecasts do not adequately account for the intermittent nature of wind and solar."

The op-ed followed Abbott's letter to the PUC and his public statements about what he expected from the utility commission and the Electric Reliability Council of Texas (ERCOT).

"I'm directing the PUCTX to take immediate action to improve electric reliability across the state," Abbott said in a Tuesday Twitter post. "These directives build upon the reforms passed this session to increase power generation capacity and ensure the reliability of the Texas power grid."

The objective of Abbott's directives was "to ensure that all Texans have access to reliable, safe and affordable power, and that this task is achieved in the quickest possible way," the governor's letter said. "Through clear communication, transparency, and implementation of these critical changes, the PUC and ERCOT can regain the public’s trust, restore ERCOT's status as a leader in innovation and reliability, and ensure Texans have the reliable electric power they expect and deserve."

The letter, with its admissions and directives, was quite a change from June 8 when Abbott signed into law ERCOT and other energy-related reforms and made a comment that it seems the governor can't live down: "Bottom line is everything that needed to be done was done to fix the power grid in Texas."

Less than a week later, ERCOT, which manages the state's electrical grid under PUC oversight, started asking Texans to conserve power during a heat wave, pointing up the not-fixed nature of that apparently fragile grid.

The heat wave came only months after Winter Storm Uri caused widespread power outages that ERCOT could not keep ahead of. The state power grid came close to collapse as Texans scrambled to find food and clean water. The winter freeze wasn't just about trying to keep warm and dry. The weather event also drove up the price of electricity in the state's largely unregulated power grid to about $9,000/MWh. Power generators had to purchase high-priced power from elsewhere and found themselves in conflict with state officials and the financial world.

Abbott's letter to the PUC, following the weather events, came off to some as insincere and his agenda for the state Legislature's special session, which began Thursday, fared little better because it included no energy reforms.

Also on Thursday, Watchdog Investigative Columnist Dave Lieber accused Abbott in a Dallas Morning News op-ed of trying to "shush his critics with a work-around" by asking his "puppets at the PUC" to improve electrical reliability.

"He cited wind and solar facilities that misfire on cloudy, windless days," Lieber said in the op-ed. "He wants those companies to pay when they don’t produce enough power. Cue the laughter from the fossil fuel industry. Abbott wants E-COT to do a better job scheduling when power plants go offline. That's like asking the Texas Rangers to win 10 games in a row. What are the odds?"

Meanwhile, there's no shortage of advice on what else to do.

Isaac, in his own op-ed, offered two reforms to deal with ERCOT's alleged phantom reserve margins that Isaac and other critics maintain are to blame -- at least in part -- on the council's inability to keep up with power demand in the state.

"First, all power generation should be required to be dispatchable, meaning renewables must guarantee a certain amount of power before they connect to the grid so that ERCOT has a firm foundation for its reserve calculations," Isaac said. "Second, Texas should phase out subsidies that distort markets and favor unreliable energy sources on the backs of the taxpayers to ensure that reliability is the top priority for power generation."

The state needs to have gloomier expectations if things are going to get better, Isaac said.

"Either way, Texas has far too much at stake to hope for the best without preparing for the worst, especially when recent history has reminded us what most Texans know all too well: the weather doesn't always go according to plan," he said.