Texas Energy Crisis: Where Do We Go From Here?

February 19, 2021

It has already started, as politicians look to position themselves positively during this energy crisis. Each day that passes you see them trying to manage their reputations while families and businesses have been thrown into chaos due to events they did not understand or control in many instances. In a world post COVID-19, it would seem anything is possible, but not an energy and water problem as impactful as it was. At least not in Texas!

I will leave the postmortem of the big picture of why this event was so dramatic and costly until after the event has past and an objective accounting of the facts can be determined. My suspicion is that there are numerous areas of responsibility and room for vast improvement across many levels. Unfortunately, due to the size of Texas and the number of families and businesses who experienced great physical and financial distress, it will take a while to clearly identify the improvements needed policy-wise and grid-wise.

In the proceeding days, you can expect to see misalignment between competing interests and economic questions of just what Texans should be paying, to ensure we do not operate like a third world economy. However, what I know today is that the conversation around energy and water and its continued availability during times of crisis is now and should be forever altered.
Since the Gulf Coast experience with Harvey, when the power was out for days in the summer of 2017, there has been little awareness of the importance of reliable power and how it relates to our ability to have adequate clean water. Water systems in 2017 failed to properly perform due to the power outage and there was little thinking about a scenario where a power outage could occur from freezing temperatures impacting the whole state. Following 2017, only a few coastal counties including Harris County required reliability systems to be installed in the event of power failures. There has been little awareness across the state that total system reliability including electricity and water was a real risk that had to be managed or a crisis could ensue as it did this past week.

On the community level, these risks must be managed by first being aware of how energy is purchased to make sure that when an event like this happens customers do not face mind numbing and budget busting energy bills. Unfortunately, for unhedged customers, the price of electricity went from $35 to $9,000 per MWh. Other critical risks are the proper on-site generation being installed, fuel availability management, real time monitoring of onsite assets and the proper protection for water systems in the event of a long-term freeze.

Acclaim has always been an advocate for strategic energy management. Therefore, we encourage our customers and others to plan and prioritize how they buy, use, and manage their energy systems since hope is not a strategy. This will ensure that those making the decisions understand how to manage risks and ensure reliability despite mother nature’s periodic attempt to disrupt our way of life.