The Texas Storm and What Went Wrong
As the Lone Star state continues to report an increasing number of storm-related fatalities, two critical questions plague the minds of onlookers: what went wrong, and who is to blame?
When Winter Storm Uri hit Texas in mid-February, it brought with it $295 billion in damages, as well as the coldest temperatures the state has seen in decades. The sharp temperature reduction caused by the storm rendered water companies unable to properly disinfect or distribute water, leading to widespread sanitation concerns. To confront these issues, 1,544 boil water notices were put in place, affecting over 12 million people across the state.
The storm’s severity was heavily exacerbated by widespread disruptions to the state’s power grid, leaving 4.5 million homes and businesses without power. In tandem with an irregular upsurge in demand for heat, weather-related disturbances to power plants ignited concerns regarding the possibility of a state-wide power grid collapse. To avert this disaster, Entergy Texas and the Electric Reliability Council of Texas (ERCOT) ordered power providers to institute rolling blackouts, which were later expanded to diminish risk further. Yet, while the rolling blackouts saved the energy grid from complete collapse, the deliberate power outages also held severe consequences.
A Texas couple has recently brought charges of gross negligence against ERCOT and two major energy providers concerning the death of their 11-year old son, who died of hypothermia during the storm. The plaintiffs allege that Texas energy providers knowingly underestimated the duration of power outages and failed to provide sufficient information for customers to adequately protect themselves, thereby leaving citizens out in the cold. While ERCOT, as an independent power grid, is not subject to federal regulation, the suit argues that the firm has an obligation to reinforce its electric grid to withstand severe weather conditions.
Seeking $100 million in restitution, the suit also confronts the vital question: who will be held responsible for the billions of dollars in damages due to power and water mismanagement?
Who Will Pay?
Already, many have looked to insurance companies to foot the bill for Uri; the Insurance Council of Texas projects that the fallout from the storm will constitute the “largest insurance claim event in state history.” The sheer magnitude of storm-related insurance claims filed has caused Texas Senators to advance House Bill 1774 to reduce the burden faced by insurance companies. The bill aims to mitigate the consequences for insurers who come up short against policyholder claims and to deter customers from bringing lawsuits against insurers by reducing the latter’s obligations to supplement attorney’s fees, among others. Sen. Kelly Hancock (R) has alleged that the bill will not hinder the ability of property owners to make claims but rather will act as a hedge against litigious predation. However, Sen. John Whitmire (D) opposes the bill, arguing that it impedes the ability of policyholders to pursue compensation by needlessly and prohibitively elevating the burden of legal counsel on the individual, even in the presence of legitimate cause.
In the storm’s aftermath, President Joe Biden authorized the Department of Homeland Security (DHS) and the Federal Emergency Management Agency (FEMA) to assist in relief efforts and allocate federal funds to the State, thereby setting a precedent for relief efforts. Biden’s disaster declaration, however, covered only 108 out of 254 Texas counties, leaving many of the more rural municipalities to fend for themselves.
Many legislators have sought to hold energy companies accountable for the harm wrought by widespread disruptions to energy and water sources. The Texas Senate hastily advanced Senate Bill 2142 to retroactively reverse a hike in energy prices that fell during the storm. The Public Utility Commission (PUC), which manages ERCOT, refused a proposal in early March, which stipulated a pricing reversal to the tune of $16 billion. The PUC argued that elevated prices worked to alleviate the situation’s gravity, stating that “prices were intentionally left high to incentivize generators to send power during widespread outages.” The PUC also noted that they lack the authority to retroactively alter the market prices, which state senators promptly rebuffed.
Changes to Come
Following the outages caused by the storm, the United States Senate has seen a bipartisan effort to enforce safety measures pertaining to the grid. The Senate Energy and Natural Resource Committee is currently planning to hold a hearing “to examine grid reliability with resilience and affordability front of mind,” said spokesperson Sam Runyon in an email to The Hill. The Senate has yet to set a timeline for such hearings.
While the Senate lags, late March saw Texas legislators eagerly implement improvements to state energy regulation, with the House passing several Bills to mitigate the threat posed by another storm such as Uri. Texas Rep. Chris Paddie, chair of the House State Affairs Committee, brought forth several measures, which established a residency requirement for members serving on the board of the electric grid operator and expanded the state’s authority in overseeing the board-member selection process. Paddie’s legislation also places requirements on generator and transmission companies to weatherize their equipment to withstand harsh weather conditions and formalizes the foundation of a Texas Energy Disaster Reliability Council. Moreover, Texas Rep. Richard Pena Raymond championed legislation instituting a statewide disaster alert system, and Rep. Ana Hernandez authored one which eliminates wholesale-market-indexed electricity products, the pricing scheme which left many consumers with astronomically high electricity bills during the storm.
The response to Uri from Texas legislators has proven encouraging, with preventative measures being implemented to prevent the state from suffering from a woeful lack of preparation in the future. According to Enki Research, headed by disaster modeler Chuck Watson, as much as 90% of the losses withstood under Uri could have been avoided with more robust preventative measures. As preventive measures provide a meaningful bulwark against the repetition of history, Texas’ recovery from its recent crisis has proven challengingly slow; as of late February, many Texans had their power restored, but millions more remain under orders to continue boiling tap water. Rep. Paddie reported, “There’s no silver bullet to improve our electric system…we’ve had an efficient system for many years, but it needs some improvements to be resilient.”
Since the gubernatorial reign of George W. Bush, Texas’ power system has been characterized by extreme deregulation and privatization. Some have begun to argue the decentralized nature of the energy system compounded damages and deaths caused by the storm. Although Texas is renowned for the low energy prices resulting from its unique employment of an independent energy grid, a lack of oversight in private power provision allowed for a delayed and insufficient response in the case of the storm. Moreover, the deregulated energy structure in Texas renders power subject to market forces, leading generators to build only as many power sources as would meet typical demand from energy providers. Texas’ anomalous winter storm has demonstrated that such a market-oriented modus operandi may prove inadequate in responding elastically to unforeseen environmental crises, raising questions about the efficacy and security of a privatized power grid, particularly as the climate in Texas becomes increasingly volatile.