Last month the State of Texas experienced a record-breaking winter storm. Temperatures in February dropped to the lowest seen since 1895. The result was a massive failure of the independent Texas grid, managed by ERCOT, leaving millions without electricity, heat or water, and with homes damaged or destroyed. Roughly 4 million homes and up to 15 million people had no power for several days, and 13 million homes had no water or poor water quality. The entire grid was minutes away from a catastrophic system wide failure which would have left us in the dark for months not days.
According to Brett Perlman, of the Center for Houston’s Future and former ERCOT commissioner, the systemic failure appears to have affected all power plants, wind generation as well as thermal generation (coal, natural gas and nuclear power plants). It is safe to say that while the loss of wind generation exceeded ERCOT’s plans, it was the loss of thermal generation, primarily natural gas-fired generation, the backbone of the ERCOT fleet, that ultimately caused this systemic failure. The grid lost more than 20,000 MW of thermal generation capacity to outages.
The economic impact of the storm was severe. Damages tied to the storm will likely exceed $50 billion USD. The Greater Houston Partnership, WTC Houston, predicts the long-term impact on GDP to be less acute due to pent up demand, overtime for hourly workers and most salaried workers were still paid despite a halt to work, projects, meetings, etc. While there was considerable loss of production on factory floors and a major disruption to supply chains, both were returning to capacity and normalcy days after the storm.
The time has come for a reckoning with an independent system, the agency which manages the system, elected and appointed officials and, more broadly, the response to global climate change. Texans are resilient. We face natural disasters and great challenges head on. The Greater Houston Partnership supports a full inquiry into what went wrong and the development of a smart plan to improve the resiliency of our power grid and related infrastructure. The Partnership and broader business community look forward to working with lawmakers and other policy makers to make the changes that will prevent such a catastrophic event in the future.