State Ranks Last in Electrical Reliability

July 19, 2013
The Texas Tribune
Kate Galbraith

It is almost August. That means Texans are avoiding the heat, air-conditioners are cranking, and electrical power demand is going through the roof.

Let's hope the power stays on.

Texas likes to be No. 1 at everything. But we are currently dead last when it comes to the reliability of our electrical system, according to a recent assessment by the North American Electric Reliability Corporation, a group that keeps tabs on the country's power situation with the exception of Alaska and Hawaii.

That means that California — yes, California — is less likely to experience systemwide blackouts this summer than Texas. That even takes into account the problems at a major nuclear plant south of Los Angeles.

"I've been doing assessments for five years, and I have not seen this situation" on the Texas grid system, said John Noura, the associate director of reliability assessments at N.E.R.C.

Grid officials do not expect blackouts this summer, but the problem is not going away soon, because Texas is growing. Peak demand on the state's electricity grid (which covers most of the state but not El Paso and parts of the Panhandle and East Texas) is rising. And power companies have been reluctant to build plants because low wholesale electricity prices — caused by the abundance of natural gas extracted with hydraulic fracturing technology — are eating into their profitability. (One exception is a new natural gas plant planned for Temple; completion of its financing was announced this week.)

Other systems could resolve a power crunch fairly easily, by importing power from other states. That's what California does. But Texas, alone among the contiguous 48 states, has its own electric grid. That is an outgrowth of the state's keep-the-federal-government-out attitude (no interstate commerce jurisdiction here, please), and it requires self-reliance, for better or worse.

So Texas basically has two choices: deal with higher power prices and try to mitigate them with conservation or risk facing occasional, controlled blackouts, like the one last year in the dead of winter — except that in the future, the blackouts would be more likely to take place on the hottest summer afternoons.

Regulators are working on the problem. On July 27, the Public Utility Commission, which oversees the Texas electric grid, will hold a much-anticipated workshop on electrical reliability. Representatives for power generation companies, consumers and various other groups will crowd into an air-conditioned meeting room in the William B. Travis Building in Austin to debate the merits of changes to the way the electricity system works.

One thing is already happening; power prices are going up. Last month, the commissioners voted to raise a cap on wholesale power prices by 50 percent starting in August, and they could decide later this year to double it again. What that means is that power generators, who mostly sell to middlemen, stand to reap considerably higher profits at times when the electric grid is strained. The commission resists the notion that the increase will automatically raise ordinary Texans' electric costs. It's "not a direct correlation," said Kenneth Anderson, the lone commissioner who abstained from the vote on the price-cap increase. Consumer advocates see things differently.

"What it means for consumers is higher prices with nothing guaranteed in return," said Tim Morstad, associate state director for AARP Texas, the nonprofit that represents people 50 and over. How much bills will rise is unknown, he said.

Regulators are also working on other solutions. One involves persuading Texans to use less energy. In August, the utility commission will introduce an ad campaign, "Power to Save," that points out ways Texans can save electricity (and money), like turning up thermostats a bit in the summer. The electric grid operator also introduced a free app in June to provide alerts when the grid is experiencing difficulties, so Texans know to make an extra effort to turn off lights.

Another factor could help in the short run: the weather. Victor Murphy, a scientist in Fort Worth with the National Weather Service, said that although August would probably be hotter than normal, it should not be as extreme as in 2011. In other words, a long stretch of 100-degree-plus temperatures is unlikely.

That's probably the best news power grid operators have gotten in a while.

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