Cold Messes With Texas (and Its Electric Reliability)

This week’s massive winter storms and frigid temperatures wreaked havoc over much of the U.S. Texas has seen the most outages, with businesses and residences left in the dark and sending spot electric prices through the roof. Observers and pundits have been quick to point fingers at different electric generation technologies, regulatory constructs, energy policies, and even Texas’ go-it-alone electrical grid. Could this happen in Ohio?

The 2014 polar vortex knocked out 40,200 megawatts (MW) of power generation in Ohio and the region. Nothing was spared. Natural gas, nuclear, and renewables all had failures. Coal was impacted heavily, with 13,700 MW of outages. However, Ohio’s power stayed on because the Buckeye State is part of a 13-state power grid market called PJM Interconnection. (PJM is widely considered one of the premier grid and wholesale market structures in the world.)

Like other multi-state grids, PJM allows diverse generators from a multi-state region to bid into the capacity market, resulting in a significant reserve capacity (over 20% more power than needed). There were only sporadic outages in Ohio and other PJM states this week.

In contrast, Texas resisted joining a multi-state grid in favor of a walled-off or island approach so that only Texas generation can supply Texas markets. The Texas grid, operated by the Electric Reliability Council of Texas (ERCOT), is not subject to federal transmission regulations and does not have a capacity market that functions to assure adequate electricity supply, especially during peak events.

During Ohio’s House Bill 6 debate, some state lawmakers expressed condemnation of PJM in favor of a Texas-like model in which utilities and generators win and customers are exposed to considerable risk. But this week has served as another reminder that in times of extreme weather, PJM’s multi-state regional market has kept the power on. 2/18/2021

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