Why Californians ‘shouldn’t feel smug’ about the massive power outages in Texas

Blackouts were rolling through California, and conservative politicians in Texas were only too happy to pile on with criticism.

“California is now unable to perform even basic functions of civilization, like having reliable electricity,” Republican Sen. Ted Cruz gleefully tweeted after two nights of blackouts left hundreds of thousands of Californians without electricity last August. Cruz and others said the power outages were proof of California’s foolish strategy of relying heavily on solar and wind power.

Now it’s Texas that’s been paralyzed by blackouts, far more widespread and longer-lasting than California’s, as a dangerous winter storm has plunged millions into darkness and freezing cold. The blackouts exposed deep flaws along Texas’ electricity grid — notably a casual, Wild West approach to planning for shortages that pales in comparison to California’s more structured approach.

“In Texas, they’ve sort of prided themselves on not planning,” said Severin Borenstein, a board member of the Independent System Operator, the agency that operates California’s energy grid. As for this week’s blackouts, “I would call it a bit of karma for some of the officials in Texas and elsewhere who were saying California doesn’t know how to run a grid,” said Borenstein, a UC Berkeley economist.

Yet California isn’t exactly in the clear.

The state’s power grid has its own fragility, and another potentially difficult summer is coming in 2021. State officials say they’re building redundancies into the grid to reduce the threat of more blackouts.

But vulnerabilities remain. While last summer’s blackouts were caused mainly by a ferocious heatwave, a major factor was a decline both nights in solar and wind power supplies. Long after the lights came back on, the blackouts raised troubling questions about the reliability of green energy.

California law says renewables must make up 60% of the California electricity supply by 2030 and 100% by 2045. Yet going green can create difficulties, especially when the sun goes down, the solar energy dries up but the demand for air conditioning persists deep into the night.

“We shouldn’t feel smug,” said Jim Bushnell, a member of the Independent System Operator’s market surveillance committee.

A UC Davis economist, Bushnell said the effects of climate change — and the efforts to combat it — are destabilizing California’s power grid. Rising temperatures are causing dramatic peaks in consumption, while the introduction of more renewable to reduce carbon emissions is making the California more dependent on wind, solar and other sources that sometimes aren’t as reliable as gas-fired generating plants.

“We have a much more unpredictable demand for electricity and much more unpredictable supply as well,” Bushnell said.

Gov. Gavin Newsom has said California won’t retreat from its green-energy goals and can improve reliability by planning better for peaks in consumption. What’s more, the governor issued a directive saying the state will ban sales of new gas- and diesel-powered cars by 2035.

An all-electric motor vehicle fleet would mean California would have to install thousands of new charging stations across the state, said David Bodek, a senior director at S&P Global Ratings in New York.

“That could create more pressures on the grid,” he said.

Texas, Enron and the energy crisis

With his state on its knees, the usually combative Cruz offered an apology of sorts for his comments about California and its green-energy crusade. “I got no defense,” the senator said on Twitter Tuesday.

Some of his fellow Texas Republicans weren’t willing to admit defeat, however. Congressman Dan Crenshaw tweeted that “Texas’s biggest mistake was learning too many renewable energy lessons from California.”

Crenshaw was falsely blaming Texas’ blackouts on failures of the state’s wind turbines. The turbines did freeze up. But about 60% of the energy loss in Texas was caused by weather-related problems with the state’s fleet of gas- and coal-fired plants, said S&P’s Scott Sagen.

This week’s blackouts weren’t limited to Texas; power grids were faltering in Louisiana, Virginia and elsewhere. But it wasn’t surprising that Texas officials were the ones sniping at California.

The two states are rivals — for political power, economic development and more. It was a major coup when Silicon Valley titans Oracle and Hewlett Packard Enterprise announced they were moving their headquarters to Texas, and Tesla CEO Elon Musk said he was moving there, too.

And when it comes to blackouts, there’s a bit of uncomfortable history between California and Texas.

The energy crisis that gripped California in 2000 and 2001, replete with rolling blackouts and stunning spikes in wholesale power prices, was largely the work of unscrupulous power traders from Texas taking advantage of the state’s poorly-designed deregulation system.

Leading the way was now-defunct Enron Corp., whose traders devised convoluted schemes to withhold electrons from California to jack up prices.

“This is the home of the late Enron,” said Ed Hirs, an energy economist at the University of Houston. “Enron schooled California on the shortcomings in the California market.”

Hirs suspects that some Enron-style gamesmanship is underway in Texas this week. He said it’s likely that some power generators “are dragging their feet” about ramping up electricity in order to raise electricity prices.

“I think we’ll be finding some evidence of that when we get to the postmortem of this catastrophe,” he said. The state has announced it will hold investigations into what went wrong at the power-grid agency, the Electric Reliability Council of Texas.

How California’s grid differs from Texas

Borenstein said California and Texas have this in common: Their power grids have been made vulnerable by extreme swings in weather, “almost certainly climate change related.”

Last summer’s heatwave caused demand to spike all over California and the West. The winter storms eliminated more than 40,000 megawatts of Texas’ generating capacity; that’s nearly enough electricity to get California through a typical summer day.

There are major differences between the management of two states’ grids, however.

For one thing, Texas’ grid is mostly an island unto itself, largely cut off from other states. California’s grid is interconnected with other Western states and can easily import and export electricity. The California grid managers asked residents to conserve power this week to free up exports for Texas and other struggling states, but Hirs said it’s unlikely that much power would reach Texas.

Another big distinction: California utilities are required to line up excess power in advance, a 15% oversupply to act as a buffer against plant shutdowns or spikes in demand. As part of the California system, generators receive “capacity payments” for making their plants available on standby in case they’re needed on short notice.

Texas has no such system. The absence of capacity payments means there’s less incentive to build new generating plants, Sagen said.

In other words, the state can be woefully unprepared in a crisis. “We don’t compensate the generators to keep their equipment ready in the winter,” said Hirs, the Houston economist.

In the wake of last summer’s blackouts, California is requiring its utilities to do even more. The Public Utilities Commission last week ordered the big three utilities, PG&E Corp., Southern California Edison and San Diego Gas & Electric, to line up additional supplies in advance of summer. The goal is to prevent blackouts “in the event of an extreme weather event in 2021,” the commission said.

Borenstein said California has to do more than simply bulk up. The state has to do a better job of planning for predictable declines in supply, as when solar power fades during the evening.

There’s nothing wrong with fighting global warming but “we’ve got to be ready for these events,” he said.

This story was originally published February 18, 2021 at 5:00 AM with the headline "Why Californians ‘shouldn’t feel smug’ about the massive power outages in Texas."