If you haven’t been living under a rock for the past few weeks, chances are you’ll be enthralled by all sorts of new stories and social media diatribes. a fingerprint on the failure of the Texas grid as temperatures plummeted across the Lone Star State earlier this month. And, discouraging injuries, after dealing with black rolls and a plague of explosive pipes during the severe winter storm, some residents were struck. power bills big enough to break them – in some cases over $ 15,000.
So disastrous (and in some cases) deadly) expanded developments, there was no shortage of accusations and blame games to go around, with different groups (erroneously) identifying frozen wind turbines while others blamed the state’s unregulated power grid. Now, as Texas lawmakers launch an inquiry into where the energy system failed, state regulators have also caught fire amid a general feeling of “finger-pointing and swollen motion” at listening to statutory hearings.
While the edges came out as a shock to Texans, as well as the rest of the world watching the news spread on their various screens, the elements that came together are in a storm. complete (so to speak) so that the systemic failures have been in place for years, and in some cases, decades. Texas’ s unique resource market has been blaming its own path for a long time now, having begun its course towards energy independence in 1999, but only when something went wrong. these devices (or “the country’s most widespread test in electrical deregulation” According to the New York Times) will come under scrutiny.
Texas is in a unique position to run its own grid however it sees fit, as 90 percent of state energy extracted on its own grid. And the state has seen fit to run that grid with very little regulation, “transferring control of the entire state electricity delivery system to market-based work of private generators, distribution companies and retailers energy ”as the New York Times reported last week.
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This decision was not a sinister and sneaky backroom deal; it was widely publicized and received equal support from voters and business leaders. “Competition in the electricity industry will benefit Texans by reducing monthly rates and offering consumers more choices about the power they use,” said Texas Governor George W. Bush. called when it became a signatory to the 1999 deregulation legislation.
But while Texans were promised cheap electricity in exchange for a rally around grid deregulation, that did not materialize. Long before long before the $ 15,000 one-month utility bills, Texans have been paying a base price for the same energy they were promised to get at a discounted rate. Unregulated power grid is particularly vulnerable to ebbs and currents, with nearly 60% of Texans now buying their electricity from a retail power company at a market-based rate instead of a facility local. Recently Wall Street Journal analysis based on national data from the U.S. Energy Information Administration, Texans not only did not get the lowest energy bills they expected, they totally paid more than other US consumers – much more. “Consumers of this unregulated energy market have paid a total of $ 28 billion for their power since 2004 than they would have paid if they had been covered by traditional Scottish resources. state, ” Earther report this week.
While the slow money of Texans pockets over the past 17 years deserves news, considering deregulation has been sold to the public to do just that, it is highly likely that the system has charged unchanged without the awful grid and failures caused by this month’s storms – although with changing weather patterns this kind of catastrophic climate event was coming sooner or later. But due to the devastating horrors, the U.S. and Texas energy industries are changing in response as power companies warranty on unregulated grids. “Investors prefer stable shares from regulated resources rather than erroneous profits in America’s voluntary energy production industry,” the Financial Times reported this week.
While there are still many benefits to deregulation – encouraging innovation and coal plant prices are just two examples – this month’s events show that these benefits do not outweigh the risks for many producers. and Texan power consumers.
By Haley Zaremba for Oilprice.com
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