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Pyatt: Texans paying the price for deregulated energy system, which will only get worse if not fixed | COMMENTARY

Although there will always be climate deniers, an important aspect in our enormous and long overdue national infrastructure effort must include both an update to previous reliability standards and to include global warming on top of it. The overdue utility meltdown — a similar event occurred in 2011 — in Texas brought this weakness front and center. By all accounts, this problem can be traced back (at least) to creation of the Electric Reliability Council of Texas (ERCOT) in the 1970s.  But its deep roots go back further to the 1930s.

A recent Wall Street Journal analysis has shown that for the past two decades customers in Texas who use the deregulated system — which was supposed to provide reliable power at a competitive price — pay more than for those who use traditional (competitive) utilities for those Texas residents having the option to choose.

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I’ve divided my career about equally between profit making enterprises, mostly in the energy business, and on the regulatory side of things as a Federal employee, also in the energy sector. There are pros and cons on both sides. I believe we have swung too far in the direction of de-regulation of the power business, and it is coming home to bite us. Yet if we do not fix it, like bad teeth, it will only get worse and worse until the system breaks. And falls apart.

It is hard to appreciate the immense financial pressures energy providers bring to bear on employees and public officials until you have worked in the system. And how difficult it is to impose regulations on them. 

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Engineers and other professionals have to be sharp, hardworking, and are usually well compensated. Regulators have to follow suit. It is not a game for the squeamish. There is a lot of money at stake, and one decision can cost billions, depending on how it goes.

In Texas It is the case of the shoemaker’s family going barefoot. I worked on the South Texas nuclear plant for about a decade during its design and construction and did a study of the reliability of gas transportation lines, also in the South Texas area, focusing on the potential of a large gas explosion. They were in good shape energy-wise and had gas, oil, and fuel aplenty. Because of the energy availability in Texas, they have top-notch university, and corporate expertise. Yet ERCOT has been successful in doing what other energy providers would like to do, e.g. have independence (for the most part) from external regulation.

Central to the current crisis was the belief that was expressed at all levels of Texas government that cold snaps like the winter of 2021 just wouldn’t happen in Texas. Traditionally, its the summer peak heating that causes problems. But, remembering my days of working with Texas companies and indirectly with utilities — there is a unique interplay in Texas, and the distinction is often blurred between the two — profits and low energy costs rule the roost. This is both their strength, but now as we can see perhaps their biggest weakness.

It’s going to cost a lot of money to fix the problems in Texas. It may never be truly fixed. It’s also going to result in a much closer scrutiny of other geographic areas.  My sense is that we won’t do too badly in the mid-Atlantic — although there might be room for improvement — in meeting some traditional standards, but probably will  not do as well on meeting climate change effects. This review would includes large fire zones in Western States, more and bigger storms in the Eastern and Southern portions of the U.S. and increasing temperature extremes everywhere.

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I’m not sure what the short-term answer is, other than a massive government bailout on top of COVID relief and/or imposing crippling fees on rate payers. A few key resignations at ERCOT will do very little. I have a dozen or so gadgets I have to boot up and recharge every second or third day. So does everybody else.

Dave Pyatt writes from Mount Airy. Reach him at DPyatt2@verizon.net.

For any member of the community who would like to submit a guest community voices column for publication consideration, it should be approximately 700 words and sent to bob.blubaugh@carrollcountytimes.com.

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