Talk about responsive government. The Public Utility Commission and ERCOT want to know what the power generating industry requires to stop holding the public, i.e. electricity customers, hostage. Not their words verbatim, but a fairly reasonable paraphrase. The regulators have no answer yet, but they are probing what the industry's needs are, so they will be good enough to invest in weatherization and other measures to prevent a repeat of what happened in February.
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| Joint PUC-ERCOT Press Conference July 22, 2021 |
Peter Lake, the new chairman of the Public Utility Commission of Texas (PUC) and Bard Jones, the interim CEO of the Electric Reliability Council of Texas (ERCOT) today used the occasion of a press conference to pat themselves on their backs for newly-found transparency, reassuring the public that the power would stay on during the summer heat. They still could not explain the reasons for the recent outages of Texas generators, as they were still awaiting additional responses from operators in that regard. So much for being on top of things and inspiring confidence.
There was little new information of substance following the recent release of a long laundry list of improvements ERCOT claims to be working on to assure grid reliability going forward. Some of the items on that list have nothing to do with the grid operator's mission to keep light on and A/C running: the employee retention plan, for example.
The most notable void in the presentation was the lack of substance as to what will be done to restructure the market to remove perverse incentives and address the issue of profiteering under crisis conditions, such as happened in last February's arctic cold episode. The gentlemen simply did not know how it would all play out in the course of ongoing and forthcoming consultations with the relevant stakeholders.
The public is nevertheless supposed to take comfort from their readiness to discuss the myriad ways in which the market structure could be fiddled with so as to prioritize and incentivise reliability. Alas, just a few months ago, the Electric Reliability Council of Texas spectacularly failed to live up to its name. Making the selling job for the key concepts - reliability and public confidence -- all the much harder.
At least the newly installed PUC and ERCOT head honchos acknowledged that "the crisis business model" is a problem. That, of course, is widely appreciated already. The critical question that remains unanswered is this: What will be done about it?
They also credited the Legislature for their path-breaking and unprecedented reform, and the Governor for his strong guidance.
When asked about plans to improve energy-efficiency of housing as a way to address the demand side of the Texas electricity system, however, they had to allow that it wasn't within the ambit of what the Legislature had prescribed. Ditto for the natural gas situation, which continues to be overseen by the Railroad Commission. Except for the designation of natural gas facilities as critical infrastructure, which is handled by the distribution segment of the grid. The interim ERCOT chief did acknowledge that gas companies had been paid to shut down and go offline during the winter storm because they participated in the demand-response program, and indicated that steps had been taken to assure that such critical facilities wouldn't participate in such a program in the future.
What's Being Done Differently in the Short Run?
The most significant changes to the Texas grid in the short run concern the operational aspects of contracting for ancillary services and directing generators to come online when grid conditions are expected to tighten. The projections of needs (demand) are now supposed to be more accurate because the computer models take into account weather conditions in real time, rather than relying merely on seasonal and historical patterns to produce projections. And the amount of resources available on stand-by to enhance the margins of safety have been beefed up.
Public Communications
Do you know what ancillary services are and what dispatchable means? If you don't, or are not sure, you won't be alone. The operation of a power grid is a complex undertaking, and highly technical.
At their press conference, the regulators acknowledged the need for better and clearer communications with the public, and cited their unprecedented joint press conference as evidence of their improved approach to public relations. And yet, they failed to live up to their own gospel. Why couldn't they explain what dispatchable means, the difference between fossil and renewable sources of energy, and the significance of energy storage? It might have helped. And what about a primer on the strenghts and weaknesses of different energy sources, the issue of diversifying and optimizing the mix, and what's in development in terms of technology and actual projects?
At least they defended the use conservation alerts, which they said are nothing to be concerned about and are employed by grid operators in other states and countries. That is, no doubt, the case. But it also undermines the readily apparant purpose of the press conference: to reassure the public that the grid is now in good hands after the catastrophic failure in February that left millions of Texans in the cold and in the dark in their own homes, and more than a hundred dead.
VIDEO RECORDING OF PUC-ERCOT PRESS CONFERENCE
YouTube: ERCOT, PUC leaders discuss changes to improve Texas’ grid reliability | KVUE [Austin's ABC affiliate]
REFERENCES
Texans not expected to lose power through the rest of the summer, regulators say. The state’s electricity regulators said they’re taking steps to assure a skeptical public that the power won’t go out again if Texas experiences extreme weather this summer. TEXAS TRIBUNE 2021-07-22 by MITCHELL FERMAN
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