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Market fundamentalism should never apply to utilities, as Texans are learning the hard way

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The United States is in the grips of a winter storm that has left millions without power along its Gulf Coast. In particular, the state of Texas, the so-called energy capital of the world, is being ravaged and many are wondering how and why such a thing is happening when energy suppliers knew the storm was coming.

First of all, most of Texas has an independent power grid and, in fact, there is no national US power grid at all. While the country sports a “balkanized” power grid split into several distinct zones, Texas operates a stand-alone grid that keeps it isolated from other markets. That means that during rare times of emergency such as this the state cannot draw from elsewhere, leaving 4.4 million customers without power at one point.

There are a multitude of factors at play in this scandal, but the major point is that operators failed to prepare; for example, equipment was never winterized and this led to a significant portion of the state’s energy generation sources going offline when the freeze hit. As Texas state officials acknowledge, the onus falls on the Electric Reliability Council of Texas (ERCOT), which manages the state’s electric power flow.

Texas’s independent power grid also means that it has been able to avoid federal regulations and opt........

© RT.com

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