What happened during the winter storm
Texas operates its own grid so couldn’t get help from other states
Unlike other states in the US, Texas relies on its own power grid. This means it isn’t able to borrow energy from other states when they have a state-wide power issue, as Texas experienced during the recent storm. Texas is the only state that’s not part of either the Eastern Interconnection or Western Interconnection, the two main power grids in the US. The Electric Reliability Council of Texas (ERCOT) operates the Texas electric grid and manages the flow of electric power to the state’s 26 million customers. When the storm hit, Texas couldn’t rely on power support from other states.
Cold temperatures created high demand for energy while generators struggled to operate
Texas is no stranger to winter storms, but they typically come and go quickly and mostly affect the panhandle, West Texas and North Texas, while central and south Texas remain balmy. This weather event lasted many days and affected every one of the 254 counties in the state. Every household in Texas needed more power than usual to heat their home.
At the same time, the winter storm caused 40% of the state’s power generation plants to go offline, including gas plants, as well as some renewable sources. This meant there wasn’t enough power being produced to keep up with the record-breaking demand. In response to the plant failures and in order to prevent a statewide blackout, ERCOT tried to keep a balance between the supply and demand. They directed utility companies (who transmit and distribute electricity to peoples' homes and maintain the power lines) to turn off the power for millions of Texans through rolling blackouts. Normally, these outages are controlled, temporary interruptions of electric service used as a last resort to conserve power and meet statewide demand. This time though, the outages were prolonged, often lasting a day or more.
Energy prices increased – a lot
In Texas, a spike in energy prices isn’t a surprise. But it normally comes in the summer months when temperatures increase and more people are turning on their air conditioners. And these price spikes are normally brief, lasting a few minutes or hours.
However, at the worst point of this storm, over 52 gigawatts of Texas’s 108 gigawatt of installed capacity were offline. Generators across the state were affected and gas-fired plants shut off due to freezing conditions. All of this caused an enormous surge in what are called ‘ancillary charges’. These are financial incentives paid by energy suppliers to generators to encourage extra generation when it’s needed.
To give you an idea of how much these charges increased by, take a look at the graph below. That spike at the end shows the increase in ancillary charges.
Supporting our members in Texas
Protecting members from price increases
In the coming weeks, many Texans are going to see high energy bills. But because we buy most of our energy in advance, Bulb Texas members did not see any change to their February rate and their March rate only reflects a small increase, about 5%, which is because the cost of energy typically increases in March.
Bulb won’t pass costs from the storm on to members. But energy suppliers are facing higher ancillary charges which others may pass on to their customers, some of whom are already facing soaring energy bills.
The increase to ancillary charges faced by energy companies are unreasonable – overestimated charges that don’t make sense. We want to understand what’s being done to fix the market to ensure generators aren’t profiting excessively from this emergency and Texans aren’t left without power ever again. We don’t think it’s fair for customers to pay more. We think the system needs to change.
Reducing demand on the Texas power grid
During the winter storm, Bulb protected members from price spikes and took immediate action to reduce the demand on the Texas power grid. We kept our members’ rates locked through February. Plus, we offered to pay our members $2 for every kilowatt-hour of energy they saved on Monday February 15th compared to Sunday February 14th, up to $200.
We also encouraged all of our members in Texas to reduce their energy as much as possible. We got in touch to suggest setting the thermostat to 20 degrees and keeping the heating down, or off, during the highest usage times (7-10am and 4-7pm).
Preventing this from happening again
We’ve filed a petition to the Public Utility Commission in Texas (PUCT) – they’re the state agency that regulates the state’s electric, water and telecommunication utilities and provide legislation. We’ve also written to the Texas Governor, Greg Abbott, urging him to take immediate action.
As Texans begin what will likely be a very long recovery process, many are asking how this could happen in the state that produces the largest share of electricity in the country.
There are no easy answers. And climate change may mean we see more of these surprising weather events. But we can work to be better prepared – and that starts with fixing the problem and making sure the market works for Texans.