The Electric Reliability Council of Texas (ERCOT) has been the preferred scapegoat of Texas politicians since the power grid failure during Winter Storm Uri. Now, the future of the council is up in the air, with several emergency bills in the Legislature taking direct aim.
ERCOT is responsible for operating the Texas power grid. During the winter storm, they made the decision to institute rolling blackouts in order to account for a sharp spike in demand. However, the rolling blackouts turned into days long spans without power for millions of Texans once it became clear that the freezing weather had crippled the state’s power generators. ERCOT maintains that their actions were the only way to prevent total catastrophic failure of the entire power grid and keep the lights on in necessary infrastructure such as hospitals.
Despite ERCOT and the Public Utility Commission essentially operating under the exact preferred directives of the Republican leaders of the state, they are the focus of multiple emergency bills in the state Legislature that would reform the council. This comes as they are already under fire for multiple scandals, including having members that don’t even live in Texas as well as being sued by the City of Denton for a $207 million power bill for only a few days’ worth of electricity. CEO Bill Magness has already resigned from ERCOT.
House Bill 10 from Rep. Chris Paddie, (R-Marshall) would restructure ERCOT so that some members of the board would be appointed by the governor, lieutenant governor, and speaker of the house. This would change the current system where new members of the board are nominated by the existing members. The bill would also require members be Texas residents.
However, it’s hard to see how this would create any meaningful change in the operation of ERCOT. Both Governor Greg Abbott and Lt. Governor Dan Patrick have already expressed no interest in fundamental changes to the way Texas runs its power, such as rejoining the national power grid or rolling back the deregulation of the industry. Having ERCOT members be political appointees is not likely to alter the way they make decisions for the better.
Paddie has also filed House Bill 11, which would mandate that ERCOT make all power generators winterize. Failure to winterize the power facilities after a similar storm in 2011 is one of the main reasons the grid failed this February. The bill demands ERCOT “implement measures to prepare facilities to maintain service quality and reliability during a weather emergency,” but doesn’t spell out how costly improvements to existing Texas plants would be paid for. Notably, the bill also defines extreme weather purely in terms of temperature and does not address Texas’ more common weather emergencies such as windstorms and flooding.
It’s all well and good to say ERCOT has to make power generators shape up, but without a specific mechanism to require improvements it’s hard to see how they will actually do that. House Bill 14 by Rep. Craig Goldman (R-Fort Worth) would also charge the Railroad Commission with forcing updates to equipment. That bill doesn’t spell out the cost or methods either, though Abbott has stated he is open to some public funding for the endeavor. Any improvements will ultimately require at least some public funds, which Texas Republicans are generally unwilling to part with.
ERCOT is likely to continue as an institution, but the scope of its power might soon be diminished by another layer on top. Paddie has filed a third bill, House Bill 13, that would create a new council of ERCOT, the PUC, the Railroad Commission, and the Texas Department of Emergency Management. The new council would coordinate during disasters for maximum synergy.
Trying to make ERCOT more answerable to other entities is not going to solve the problem. The primary function of the council involves the energy market, not public utility reliability. They are a product of the state’s deregulation, and they are primarily concerned with enabling the free market approach. As ERCOT former member Marcus Pridgeon puts it, “Unfortunately, the culprit is the competitive energy market that has created the low prices Texans have enjoyed the last two decades.”
