Obviously, you did not read the article which simply said there is even blame
to go around , or you didn't like what was
written.==========================================================
-----Original Message-----
From: Eric Russell <ericprussell@xxxxxxxxxxx>
To: uupretirees@xxxxxxxxxxxxx <uupretirees@xxxxxxxxxxxxx>
Sent: Fri, Feb 19, 2021 2:02 pm
Subject: [uupretirees] Re: How Did Texas Electricity Grid Fail Residents So
Catastrophically? An Expert Explains
#yiv2945986293 P {margin-top:0;margin-bottom:0;}So, it was not just poor
planning, it was a system that militates against preparedness in the interest
of saving money. I wonder how much the lawsuits will bring in? Deaths, costs
of displacement, inability to get food delivered, inability to feed livestock?
The list is long.Eric
From: uupretirees-bounce@xxxxxxxxxxxxx <uupretirees-bounce@xxxxxxxxxxxxx> on
behalf of Marshall Spector <dmarc-noreply@xxxxxxxxxxxxx>
Sent: Friday, February 19, 2021 10:22 AM
To: uupretirees@xxxxxxxxxxxxx <uupretirees@xxxxxxxxxxxxx>
Subject: [uupretirees] How Did Texas Electricity Grid Fail Residents So
Catastrophically? An Expert Explains The failure of unregulated free market
capitalism.
https://www.sciencealert.com/how-did-texas-electricity-grid-fail-residents-so-catastrophically-an-expert-explains
How Did Texas Electricity Grid Fail Residents So Catastrophically? An Expert
Explains
Americans often take electricity for granted – until the lights go out.The
recent cold wave and storm in Texas have placed considerable focus on the
Electric Reliability Council of Texas, or ERCOT, the nonprofit corporation that
manages the flow of electricity to more than 26 million Texans.Together, ERCOT
and similar organizations manage about 60 percent of the US power supply.From
my research on the structure of the US electricity industry, I know that rules
set by entities like ERCOT have major effects on Americans' energy choices. The
current power crunch in Texas and other affected states highlights the delicate
balancing act that's involved in providing safe, reliable electricity service
at fair, reasonable rates.It also shows how arcane features of energy markets
can have big effects at critical moments.
Let there be light
The electric age began in 1882 when the Edison Illuminating Company sent power
over wires to 59 customers in lower Manhattan from its Pearl Street Generating
Station. Edison was America's first investor-owned electric utility – a company
that generated electricity, moved it over transmission lines and delivered it
to individual customers.The scope and scale of electric utilities grew rapidly
from those humble beginnings, but this underlying, vertically integrated
structure remained intact for more than 100 years. Each utility had a monopoly
on serving customers in its area and reported to a public utility commission,
which told the company what rates it could charge.Since the utilities knew more
about their costs and abilities than anyone else, the burden was on regulators
to decide whether the utility was operating efficiently.Regulators also
determined whether the costs that utilities proposed to pass on to customers –
such as building new generating plants – were just and reasonable.
The lines get tangled
Things grew complicated in 1996 when the Federal Energy Regulatory Commission
issuedOrder 888, allowing states to restructure their electric power industries
to promote more competition. Through the actions, or inaction, of individual
state legislatures, the US electricity market fractured.Some states, primarily
in the Southeast and the West, maintained the vertically integrated structure.
The rest of the nation moved to a market structure in which generators compete
to sell their electricity.Regions created new independent organizations – known
as independent system operators or regional transmission organizations – to
regulate the flow of power on the grid. In these regions, generators compete to
sell their electricity, and organizations called market monitors make sure that
generators follow the rules.This approach created power markets that prioritize
generating electricity at the lowest possible price.(FERC)Above: In the
Southeast, Southwest and Northwest US, traditional utilities generate
electricity and deliver it to customers. Other regions, including Texas, have
moved to competitive power markets run by Independent System Operators, or ISOs.
An imperative to keep prices low
What do these changes mean for electricity customers in regions with
competitive power markets? The companies that deliver power over wires to homes
and businesses still have to get their prices approved by regulators, but the
system works differently for the businesses that generate that power.Generators
offer their electricity, typically at a particular price each hour, on
exchanges run by market operators like ERCOT. Those operators figure out how
much electricity is needed across the regions they serve and choose the
lowest-cost bidders to supply it.If a generating company is not selected, it
loses the opportunity to sell its electricity during that hour. And selling
power is how generators create revenue to pay for things like workers, power
plants and fuel. This means that generators have an incentive to bid as low as
possible and sell as much electricity as possible.Generators in Texas are
facing criticism now that they weren't prepared to operate in extremely cold
temperatures.But consider the challenges facing two Texas generators that are
identical in every way, except that one decides to invest in winterization.
That company will have higher costs than its competitor and may be forced to
submit higher-priced offers in the market, potentially losing out on
opportunities to sell its electricity.In the long run, the company that
winterizes may have a more difficult time staying in business. It would be
better prepared for the conditions affecting Texas now, but it would operate at
a competitive disadvantage under more normal conditions.An international
nonprofit regulator called the North American Reliability Corporation conducts
semi-annual reliability assessments for each North American region, but those
assessments are only as good as the assumptions they're based on. If the
assessment doesn't consider extreme events, then the regulator can't determine
whether a power system is ready for them.After an earlier cold wave in 2011
that led to power shortages, federal regulators identified options for
winterizing the Texas power system – but ERCOTdid not require energy companies
to carry them out.Other regions might value resilience differently. For
example, ISO-New England launched a program in 2018 that compensates generators
forproviding extra capacity when the system is strained.The power of a
competitive generation market is that each generator gets to decide for itself
what makes it sustainable in the long run. That's also a weakness of the market.
What's next for Texas?
Once power is restored across Texas, state and federal policymakers will have
to address several tough questions in order to make failures like this less
likely.First, does preparing the power system for severe storms represent value
for electricity customers? What types of events should people be protected
from? Who determines the scenarios that go into reliability assessments? Since
consumers will pay the costs, they should also benefit.Second, how should
people pay for this resiliency? Costs could be assessed based on the number of
kilowatt hours each household uses or charged as a flat fee per customer – an
approach that could benefit heavy electricity users. Or they could be covered
through new taxes.How will decision-makers respond a year from now, when the
crisis has passed and people ask, "The weather is great and the system is doing
fine, so why am I paying more for my electricity?"Third, how does that money
that consumers pay to improve the system translate into projects? Should it go
directly to generators or into a fund that generating companies can draw on?
Who would administer the fund? Who is ultimately responsible for implementing
changes to the system and accountable if things don't improve?Finally, how will
these changes affect the market's central goal: inducing energy companies to
provide power at the lowest cost?Ultimately, the public pays the costs of
electricity service, either through higher rates or service interruptions
during events like this week's Texas freeze. In my view, utilities, regulators,
government officials and people like me who study them have a responsibility to
ensure that people get the best value for their money. Theodore J. Kury,
Director of Energy Studies, University of Florida.This article is republished
fromThe Conversation under a Creative Commons license. Read the original
article.
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