Former ERCOT CEO on Texas’ grid: ‘We are much better off today’

Two years after the state’s electric grid was pushed to the brink of collapse in February 2021, former ERCOT interim CEO Brad Jones said the situation looks different now.

“We’re much better off today,” Jones said. “So much has been done in the last few years and continues to be worked on.”

Jones’ confidence in the grid comes from improvements and updated requirements in the equipment’s ability to withstand weather extremes alongside a change in communication.

In the years since the deadly freeze, legislators gave the Electric Reliability Council of Texas the ability to inspect facilities to ensure they meet stringent standards, he said. On first inspections, 98% pass, and the ones that don’t make the grade are turned over to the Public Utility Commission.

The February 2021 snowstorm caught energy providers off guard as temperatures plunged to near zero and several inches of snow fell in many areas of Texas, pushing natural gas demand to unexpected levels. Despite promises of rolling blackouts, ERCOT officials admitted they had no ability to control power outages as the grid buckled and broke amid high demand. Statewide, 210 people died, including 37 in North Texas.

Lawmakers and consumer groups lampooned energy company leaders and industry groups such as ERCOT, who for years touted that a free market would self-regulate and take care of consumers.

After the storm, politicians debated major changes to Texas’ electrical grid including reforming ERCOT and requiring weatherization for power plants, many of which are still being debated today.

Recent winter storms and summer heat waves haven’t caused the same energy meltdowns despite record power demand.

During the 2021 storm event, Jones said groups were talking over each other with differing recommendations as they dealt with different storms. Now, the state and ERCOT have improved communication channels with each of the generators and the retail electric providers, Jones said.

“One message is going out to consumers,” Jones said. “Those things are incredible.”

Energy producers and grid operators have brought on more generation and made technical changes to improve the grid, along with backup sources for periods of high demand.

“What we’ve seen in the last year is eight occasions where if we had not made those changes, we would have been in emergency conditions,” he said.

But Jones knows more needs to be done.

At an Energy Outlook conference busy with industry executives at Southern Methodist University on Thursday, Jones said as companies consider investing in renewable energies in Texas, the state will need enough natural gas power to supplement wind and solar.

“Whenever it’s dark and there’s no wind, and that happens several times a year, we have to have that backup generation that’s always going to be available,” Jones said.

Gov. Greg Abbott signaled his support for a grid redesign last month that aims to improve the system’s reliability by encouraging the construction of natural gas power plants.

The governor’s proposal has faced pushback from grid experts, ERCOT’s independent market monitor and several state senators since it was introduced in November.

“I think what his view is, is let’s keep the renewables coming,” Jim Burke, president and chief executive officer of Vistra Corp., said on Abbott’s proposal. “But let’s make sure we have an adequate supply generation that we can turn on if the renewables for some reason are not performing at the level that we need for natural reasons.”

Abbott’s support of the overhaul comes as conservative state lawmakers blame Texas’ grid troubles on the expansion of wind and solar power in Texas, despite state and federal reports indicated natural gas power plants also failed during the 2021 winter storm that led to widespread blackouts and killed more than 200 people.

To Burke, the debate on the hill questions how energy’s reliability is rewarded and recognized. Most of the country operates in a capacity market, or people get paid when they bring generation into the market, regardless if it produces energy. Texas is trying to take a different approach, he said.

“When you produce energy when it’s most needed, we’re going to reward you for that,” Burke said of Abbott’s and the PUC’s push for reform. “If you don’t produce the energy when it’s needed, and you promised that you would, you’re going to be penalized.”

Phil Jankowski contributed to this report.