Following a week of extremely cold temperatures which caused millions of Texans to be without power, in some cases for longer than three days, the Federal Energy Regulatory Commission (FERC) announced that it will be conducting an investigation into the events that resulted in the loss of almost half of the electric generation in Texas. Unique to the situation is the fact that the electric grid in Texas is purposely not connected to the national electric grid in order to maintain the state’s independence and to avoid what is viewed as unnecessary federal regulation. However, without the typical transmission interconnections that allow for the flow of additional electricity in times of need, Texas was responsible for fending for itself at a time when the state’s demands for electricity climbed above its highest extreme planning scenario. Needless to say, the Electric Reliability Council of Texas (ERCOT), the entity responsible for maintaining the reliability of the electric grid in Texas, and the justification for Texas’ stand-alone electric grid has come under extreme fire.
As part of the investigation, FERC will work with other federal agencies, states, regional entities and utilities to identify problems with the performance of the bulk-power system as well as discuss appropriate solutions to address those issues. Unfortunately, the finger pointing as to which of the various energy sources caused the cascading brown outs in the various southern and Midwest states has already begun. Making things even more complicated was the fact that on Wednesday evening Texas Governor Greg Abbott issued an order prohibiting natural gas “currently” in Texas from leaving the state prior to February 22, 2021. For perspective, keep in mind that Texas is the largest single producer of natural gas in the United States and that Texas has 11 interstate pipelines that transport gas to 31 states serving more than half of the country’s population. Understandably, the legality of the Governor’s order is in question. Arguments have been made that this order impedes interstate commerce, sets aside hundreds of thousands of commercial contracts and jeopardizes the deliverability of needed natural gas supplies transported on interstate pipelines throughout the country. Ironically, this highly publicized demonstration of Texas strength and independence may backfire. Governor Abbott’s order has highlighted not only the inability to get electric power to Texans in their time of dire need but also the ripple effect that such a state action could have on the entire nation’s public safety (and possibly even national security). This combination of events has spurred potential lawsuits and revived discussions of whether Texas should rethink its current separatist approach and unilaterally decide (or be directed) to “connect” the ERCOT electric system to the rest of the nation’s electric grid to capture the robust power benefits and security of a macro grid. If the FERC investigation concludes that the ERCOT isolationist model had anything to do with what went wrong across the country, it may be bye-bye to Texas’ electric independence.