ERCOT meteorologist Chris Coleman recently made the legacy/corporate news media circuit warning Texans of possible extreme cold during the 2024/2025 winter. The Texas electric grid managed by ERCOT in the winter of 2021 failed Texans wretchedly and one death was one too many.

Following the winter storm in February 2021, all three members of the Public Utility Commission and six members of the Electric Reliability Council of Texas board of directors resigned. The ERCOT board of directors then fired ERCOT CEO Bill Magness for the overwhelming numbers of Texas power outages in February 2021 winter storm, Uri.

The board voted to terminate Magness with a 60-day notice and gave Magness the notice without cause, meaning he could be fired at any time. Magness refused to accept the $800,000 severance pay that would have been equivalent to one year of his base salary. Magness reported he would not seek or accept severance pay. 

Who Is ERCOT?

ERCOT is a membership-based 501(c)(4) nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature. Its members include consumers, cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities, transmission and distribution providers and municipally owned electric utilities (ERCOT website).

ERCOT has four primary responsibilities:

• Maintain system reliability.
• Facilitate a competitive wholesale market.
• Facilitate a competitive retail market.
• Ensure open access to transmission (ERCOT website).

ERCOT, the Electric Reliability Council of Texas, is a nonprofit organization that manages and operates the electricity grid for much of Texas. ERCOT claims it serves and manages the flow of electric power to 27 million Texas customers and represents approximately 90% of the state’s electric load. As of 2023, Texas' estimated population is over 30 million residents.

Texas is the second-most populous state in the United States, after California. When ERCOT failed Texas in February 2021’s Uri, there was a recipe of ingredients that led to Texas’ electric grid outages. Two of the primary factors were:

Insufficient Weatherization

• After the 2011 Groundhog Day blizzard hit Texas, recommendations were put forward to weatherize power infrastructure. These recommendations were mainly voluntary and not adopted.
• Key equipment and facilities, including natural gas pipelines, were not insulated against freezing temperatures, leading to a cascading failure.

What Else Happened to Texas When Uri Befell Half the U.S?

Uri affected 25 U.S. states, with Texas, by far, experiencing the worst of the worst.  ERCOT and its stakeholders were warned about the Texas’ grid's weaknesses in extreme weather conditions long before Winter Storm Uri. It appears that a combination of costs, regulatory gaps, overconfidence, and previous recommendations left Texas unprepared for the catastrophic events of February 2021.

Why ERCOT Ignored Warnings:

• Voluntary Standards: Weatherization measures were left to the discretion of power plant operators, with no regulatory teeth to enforce compliance.
• Market Incentives: Texas's deregulated energy market prioritizes low costs and market-driven profits over infrastructure resilience.
• Overconfidence: ERCOT and state regulators assumed that extreme cold events like Uri were too rare to warrant costly preventative measures.
• Fragmented Oversight: Responsibility for grid reliability was divided among ERCOT, the Public Utility Commission of Texas (PUCT), and private power companies, creating gaps in accountability.

Extreme Weather Impact

• The storm brought unprecedented freezing temperatures across Texas, causing a spike in electricity demand for heating while simultaneously reducing supply as power generation facilities went offline.
• Many power plants (natural gas, coal, nuclear, wind, and solar) were not weatherized for such extreme cold, leading to frozen equipment and outages.

Isolated Grid

• Texas operates its own power grid, managed by ERCOT, which is largely disconnected from the national grids. This autonomy was designed to avoid federal regulation but left the state unable to import significant power from neighboring states during the crisis.

Natural Gas Supply Shortages

• The natural gas system, which powers a significant portion of Texas's electricity generation, also froze, severely limiting fuel availability for power plants.
• Compounding this, natural gas producers prioritized residential heating over supplying power plants.

Market-Driven Model

• ERCOT's deregulated electricity market prioritizes low costs over reliability. Generators are incentivized to produce power when prices spike but not to maintain resilient infrastructure.
• There were no penalties for failing to deliver power or incentives for weatherization.

Lack of Preparedness for a Rare Event

• ERCOT’s planning was based on historical weather data, which underestimated the likelihood and impact of extreme cold.
• The organization failed to prepare for a "black swan" event like Uri, leading to a grid near-total collapse.

Consequences

• Millions of Texans faced prolonged power outages in freezing temperatures.
• Approximately 246 people died, though some estimates suggest the toll was much higher.
• Economic damages were estimated to exceed $195 billion, including infrastructure damage and business losses.

What Did the Texas Government Do in Response to Uri?

After Uri, Texas Governor Greg Abbott signed several pieces of legislation aimed at reforming ERCOT and improving the reliability of the state's power grid. These laws sought to address some of the shortcomings exposed by Uri. Critics believe these legislative measures did not address all the vulnerabilities of the state’s electric grid.

A Summary of Texas Key Legislative Actions:

Senate Bill 2 (SB 2): ERCOT Governance Reform

• Restructured the ERCOT board by reducing the number of seats and giving the governor, lieutenant governor, and House speaker greater control over board appointments.
• Required that ERCOT board members reside in Texas to ensure local accountability.
• Aimed to improve oversight and ensure that ERCOT leadership aligns with state policy priorities.

Senate Bill 3 (SB 3): Power Grid Resilience

• Weatherization Requirements: Mandated power plants and critical natural gas facilities to weatherize and protect their infrastructure against extreme weather, both cold and hot.
• Penalties for Noncompliance: Established fines of up to $1 million per day for facilities failing to comply with weatherization standards.
• Critical Infrastructure Mapping: Required mapping of critical infrastructure, such as natural gas pipelines, to ensure these facilities receive priority for electricity during emergencies.
• Electricity Supply Alerts: Directed ERCOT to issue public alerts during periods of energy shortages or increased demand.
• Emergency Reserve Power: Called for the creation of additional reserves to ensure power availability during extreme events.

House Bill 3648: Designating Natural Gas Facilities as Critical

• Ensured that critical natural gas facilities would be prioritized for electricity during outages to prevent disruptions to power generation.
• Required facilities to register as "critical infrastructure" with the Public Utility Commission of Texas (PUCT).

House Bill 1520: Financial Relief for Utilities

• Authorized utility companies to securitize costs incurred during the storm (e.g., fuel purchases and grid stabilization expenses), spreading these costs over time to avoid sudden spikes in consumer electricity bills.

Implementation Challenges:

• While these laws represented significant steps forward, implementation has faced challenges:
• Delays in Weatherization Compliance: Initial deadlines were set, but questions remain about the thoroughness and enforcement of weatherization measures.
• Natural Gas Exemptions: Not all natural gas facilities were required to comply with weatherization standards, as some operators claimed exemptions.
• Lack of Grid Interconnection: None of the reforms addressed Texas’s decision to maintain an independent grid, which limits its ability to import electricity during emergencies.

Governor Abbott's Statements:

Governor Abbott declared after signing the bills that, "Everything that needed to be done was done to fix the power grid." However, subsequent heat waves and cold snaps have tested the grid's reliability, raising ongoing concerns about whether the reforms are sufficient.

Why Is ERCOT Warning Texans About Extreme Weather this 2024/2025 Winter?

From Reuters, NBC Dallas-Fort Worth, and the Texas Tribune:

ERCOT is cautioning Texans about potential extreme cold during the upcoming 2024/2025 winter season due to several key factors:

Increased Likelihood of Extreme Cold Events

Meteorological Predictions: ERCOT's Chief Meteorologist, Chris Coleman, has indicated a higher-than-average chance of severe cold spells this winter, similar to those experienced during Winter Storm Uri in 2021. He noted that while overall winters may be warmer, the frequency of extreme cold events has increased, with five of the past eight winters experiencing such conditions, compared to only three in the previous 25 years.

Strain on the Power Grid

Record Demand: In January 2024, Texas experienced a new winter peak electricity demand of over 78,400 megawatts, reflecting the state's growing energy consumption.

Potential Challenges: Despite improvements in grid resilience since 2021, the combination of increased demand and the possibility of extreme cold could test the grid's capacity to maintain reliable power supply.

Ongoing Weatherization Efforts

Infrastructure Upgrades: Post-2021 reforms have led to enhanced weatherization of power plants and critical infrastructure. ERCOT has conducted nearly 3,000 weatherization inspections since 2021 to ensure facilities are better prepared for extreme temperatures.

Continued Vigilance: ERCOT emphasizes the importance of ongoing efforts to strengthen the grid and mitigate risks associated with severe weather events.

Conclusion

While ERCOT has implemented measures to enhance grid reliability, the anticipated extreme cold events and rising energy demands present significant challenges. The organization is proactively warning residents to prepare for potential severe weather and its implications on the power supply during the 2024/2025 winter season.

What Is an ERCOT Weather Watch?

An ERCOT Weather Watch is an advance notification of forecasted significant weather with high demand. Grid conditions are expected to be normal, but due to forecasted conditions, operating reserves may be lower.

Critical Medical Needs:

• If you have medical needs, we suggest you contact your local electric utility and notify them. Controlled outages are not expected at this time, but it’s always best to have a plan in place.
• Stay Informed
• For the latest information during a Voluntary Conservation Notice:
• Subscribe to TXANS notifications.
• Monitor current and extended grid conditions on ERCOT dashboards.
• Download the ERCOT mobile app, available in the Apple App Store and Google Play.