Don’t let @GovAbbott shift blame to ERCOT. Their communication has been bad, and their winter worst-case scenario predictions weren’t nearly dire enough, but they also saved us from a much worse fate. https://www.texastribune.org/2021/02/18/texas-power-outages-ercot/ 1/x

The reality is that ERCOT just operates the grid and the power market that supplies it. They make some of the operating rules, and they kinda enforce them with what little power they have, but they didn’t design the system. 2/x

That responsibility lies on George W. Bush, Rick Perry, @GovAbbott, market-fetishizing Republicans in the Texas lege, and, believe it or not, Enron. Yes, that Enron. 3/x

It was largely Enron’s lobbying of GWB and other Republicans just as Texas shifted from a Democratic to Republican majority that gave us our energy-only power market. 4/x

Other states either directly regulate capacity or have power generators bid to provide capacity in advance, but the Texas market works by having generators offer to sell power on a real-time market. There is no direct regulation of capacity, just “market forces”. 5/x

That’s why Texas wholesale power spikes to $9,000/MWh (vs. a normal of $30-$40/MWh) in these situations. These spikes are supposed to incentivize utilities to build peaking generators (plants that start up quickly and run for short durations to handle peak load). 6/x

And this part works! We generally have enough peaking capacity. But, under normal operating conditions, power pricing here is a race to the bottom. Guess what happens? Plants forego things like maintenance and winterization to be able to sell power competitively. 7/x

And so when a big chunk of your thermal base load generation falls offline because things freeze up, you don’t have enough peaking capacity to keep up. And your peaking capacity may not be appropriately winterized either! Why? Because that’s not what the market incentivizes. 8/x

And the same sort of things went wrong in the natural gas market! Prices in the gas market spiked the same way, but it’s the same race to the bottom under normal operating conditions. 9/x

Natural gas has some amount of water content before it’s “dried out” in the refining process. That means gas wells, “wet gas” pre-refinery pipelines, and parts of refineries are prone to freezing if they’re not well-prepared for freezing temps. 10/x

And so they froze, meaning there wasn’t enough gas to supply generation stations and retail customers. Because retail gas providers have firm delivery contracts with steep penalties, that meant that it was tough for generators to get gas on the spot market at any price. 11/x

No gas means thermal baseload drops offline and peaking plants can’t start up. This all happened around 1:30a Monday morning as temperatures dropped and demand for residential (both gas and electric) spiked. 12/x

If load exceeds supply on a grid, it can cause tremendous damage and months-long blackouts, so ERCOT started “shedding load”. What were supposed to be rolling blackouts became just blackouts as the need to reduce load became so intense that there was nobody left to roll. 13/x

And that brings us to today. Supply is recovering. Load shedding has ended. Providers are focused on storm recovery now. And @GovAbbott, as usual, is trying to pin the blame on anybody but himself. But @ERCOT_ISO worked exactly as designed by Abbott and his colleagues. 14/x

We can investigate @ERCOT_ISO all day long, but the reality is that market design is at fault here. Markets can be very efficient at incentivizing what they’re designed to, but you usually need some regulation to fix the perverse incentives they create as well. 15/x

That fear of regulation is what’s kept Texas as an electric island, refusing to interconnect with the rest of the US. It’s what plunged us into darkness in the middle of a historic cold snap. 16/x

If we want to keep this from happening again, we can’t let @GregAbbott_TX and other Texas leaders shift focus away from themselves and the market they created that incentivized it. We have to hold them accountable for fixing this mess. 17/17