This piece was co-authored by Brandon Charles, a masters student at the Harris School of Public Policy at the University of Chicago who previously worked in the electricity sector.
The experience lived by millions of Texans in recent weeks is a unique and horrific tragedy. The loss of heat, water, and even life due to extreme weather conditions has been shocking. Further economic damage on top of that caused by the coronavirus pandemic is likely as well. The widespread loss of electricity was central to the crisis. Grid operators failed to adequately prepare for an increased need and a collapsing supply due to various weather-related problems: iced wind turbines, frozen coal piles and natural gas pipelines, and power plants left without the winterization needed to protect pipes, sensors, motors and other components from freezing.
If Texas were an anomaly that would be the end of the story. But Texas is part of a pattern of weather-induced incidents with economic, health and security implications. Hurricane Katrina, Superstorm Sandy, and Hurricane Maria all brought the areas they hit to a standstill, knocking out power for weeks; in the case of Maria leaving Puerto Ricans without power for almost a year. Wildfires on the West Coast seem to set new records year after year, forcing grid operators to cut power to avert more catastrophic damages. A historic heat wave sweeping the west last summer created the need for rolling blackouts in California after the power operator was unable to maintain sufficient supply to meet the increased power needs.
Although it is difficult to connect a single weather event to climate change, an increased pattern of extreme weather—more intense heat waves or cold snaps, more frequent extreme storms, dry weather-induced wildfires—are what can be expected from climate change. The use of cleaner sources of energy like wind and solar can be a powerful tool in the fight to reduce climate change’s impacts. But, incorporating these variable sources into the grid is another challenge, as is providing more electricity generation to power a whole new fleet of electric vehicles. By 2050, the nation’s demand for electricity is expected to increase by as much as 38 percent—bringing new risks to the grid, as well as to the economy and national security.
The answer is not to slow down these transitions but to address the risks more aggressively. Step one is to centralize leadership through the appointment of a national Electricity Resilience and Innovation Czar. A centralized czar could coordinate the changes that must be made to ensure the grid is reliable, resilient and prepared to face the extreme weather climate change will bring amid more variable generation and increased demand. The need for this centralized leadership is so important because, while the country has grown and thrived with twentieth-century grid infrastructure and a highly decentralized regulatory system, the complex web it has created has made it difficult to identify where, when, and by whom changes should be made—and who should be responsible for failures.
A little background: For most of the twentieth century, the United States had a traditional system of vertically integrated utilities, highly centralized generation both in ownership and design, and a regulatory system to cope with this industry structure. These pieces fit together nicely. But over the past 25 years the country has been going through transitions in market design to allow for competition, in operation to facilitate multi-state grids run by independent corporations, and in technologies as a wider variety of resources have emerged. The various pieces that once fit together so well now have cracks between them.
In states like California and Texas, an independent, non-profit corporation is tasked with operating the high voltage grid and maintaining reliability. Privately and publicly owned companies own and maintain these assets, including both regulated utilities and other companies. In many other states, privately or publicly owned utility companies perform this role exclusively. State regulators have jurisdiction over the Texas grid operator, the Electric Reliability Council of Texas (ERCOT). Federal regulators with the Federal Energy Regulatory Commission (FERC) as well as state regulators have jurisdiction over other portions of the high voltage grid across the country. State regulators, such as public utility commissions, generally have jurisdiction over resource planning and regulate the utilities that own lower voltage distribution lines. The North American Reliability Corporation (NERC) exists to assure the reliability and security of the high voltage power system.
Though state and national regulators have tried to make their grids more resilient—New York following Superstorm Sandy; both California and FERC (following the Texas crisis) today—the fragmentation of planning, policy expertise and focal areas is limiting the nation’s ability to prepare and adapt. FERC has wide-ranging expertise about multi-state electricity markets and transactions. NERC excels at grid engineering criteria. Grid operators implement market and infrastructure operations. State public utility commissions lead on cost recovery, state-level grid planning and quality of service for customers. Each of these bodies undoubtedly has some expertise outside of their area of focus, and they do communicate to some degree with the other key bodies. Yet, every entity has limitations, and this presents an opportunity for critical issues to slip through the cracks.
An electricity czar would be responsible for ensuring that nothing slips through the cracks. To be clear, this individual would in no way interfere with the proper jurisdictional authority of state regulators. While one might think that FERC could undertake this role—and certainly FERC has significant convening authority—the czar could be a central source of leadership to coordinate and prompt action among all responsible entities without raising concerns about potential FERC regulatory overreach. Specifically, the Biden administration should designate an individual from its national security and economic leadership for this task. This leader should work with state and federal entities to identify best practices and coordinate their implementation nationwide. This leader should also work with these entities to identify where additional federal support, including financial and technical resources, can improve outcomes and translate this information into concrete administrative or legislative actions.
Those leading the Texas electric grid failed Texans. Never again should Americans be left dying in darkness. An electricity czar can work to ensure that no portion of the grid is left behind, vulnerable to climate change, and unprepared for a clean electricity future.