Texas dodged a bullet this month when its state power grid, operated under the Electric Reliability Council of Texas(ERCOT), was able to withstand a drop in temperature. But that’s not because state leaders, particularly Republican Gov. Greg Abbott, learned anything from last year’s horrific storm.
As Truthout’s Candice Bernd reported last week, not only did 70,000 Texans still experience power and utility services outages during the recent cold snap, but fracked gas production also saw its biggest dip in production since the February 2021 grid failure, revealing the industry’s continued vulnerability to extreme weather.
Last year, Winter Storm Uri caused record energy demand by blanketing the entire state in snow and freezing temperatures. ERCOT had to instruct energy providers to turn off the power to avoid a complete collapse of the energy system. Nearly 5,000,000 people lost power and at most 246 died in the storm.
The latest freeze was more typical of Texas’ cold front. Local power outages were caused mostly by downed power cables due to trees and snow. Still, Abbott is claiming that the system is more reliable and resilient than it’s ever been.
Experts disagree. “The thing about [this month’s freeze] is, we passed the test, but it was also a really easy test, and we didn’t pass it with perfect scores,” Michael Webber, Josey Centennial Professor in Energy Resources at the University of Texas, told Truthout’s Bernd. “There’s a lot of people who had problems with their power, and there was still the gas production drop, so I think we shouldn’t take away too much false confidence that we’re all good now.”
Texas’s energy system is controlled by a complex mix of public and private actors, including the nonprofit ERCOT, oil and gas companies, the Texas Railroad Commission, and others. The details don’t matter as much as what makes the state’s system unique: It’s independent; not connected to the country’s two other national grids, the Western Interconnection and the Eastern Interconnection; and not subject to federal oversight.
This has allowed it to become one of the country’s most marketized systems, accordingJohanna Bozuwa, Climate and Community Project director. It’s heavily deregulated, designed to allow for intense competition in the retail sale of electricity. As one portfolio manager at an investment firm put it, it’s a “Wild West market design based only on short-run prices.”
Bozuwa wrote in the aftermath of last year’s storm, “There is no requirement for [energy] companies to make long-term investments into the health and safety of Texas’s grid or build in energy redundancies in case one source of energy fails.”
This is the problem. Texans are at risk every winter because they don’t really control their state’s energy system. It’s as simple as that.
As I explain in The Privatization of EverythingThe new book, which I co-authored along with Allen Mikaelian, shows that privatization goes beyond outsourcing public services such as trash collection to private contractors. This can lead to poor outcomes for all except the contractor. Privatization is ultimately about transferring power over our destiny as individuals and as a nation to unelected, unaccountable and inscrutable corporations as well as their executives.
Chicago’s actions during the Great Recession are a shining example. In financial crisis, the city sought out private investors such as Morgan Stanley on Wall Street and a sovereign wealth fund from the Middle East to lease out its downtown parking meters over 75 years. The investors received a lump sum payment of $1.16billion in return. However, the city soon discovered that it had leased meters worth at least $1.16 billion less than their actual value. Worse, Chicago must pay the investors if it makes any changes to its parking revenue, such a replacement of parking spaces by bike or dedicated bus lanes. According to Chicago-area transportation planners interviewed by sociologist Stephanie Farmer, this is tying their hands in efforts to build environmentally sustainable modes of transportation — and will continue to do so for60 more years.
Another example is that universities that had employed corporations to finance, build, and manage dormitories found out the hard way about the rigidity of their contracts after the pandemic. Corvias, a multi-national financial firm, wrote to Wayne State University as well as University System of Georgia warning them to limit the number of students allowed into dorms in order to stop the spread of the virus. The letters stated that the universities did not have the “unilateral right” to institute a policy that would limit the number of students or reduce housing fees due to a shortened semester.
Privatization is essentially a way for private interests to be embedded in the public goods that matter most. This includes the schools that educate us, our children, and the public transportation we rely upon to get about. It also affects the energy that powers our homes, businesses, and homes. These private interests have other goals than the public. Only when profits are increased, is social responsibility and preventing externalities a priority.
That’s why we must insist that, in a democratic society, we get to decide that some things should be free of private interests. We, together, get to decide that some things — like water, housing, electricity — are equally available to all. We can decide to make certain items available to all. public things.
Texas must take control of its power systems, otherwise the risk of being beaten by another heavyweight punch is almost certain to continue. Unfortunately, the leaders of Texas seem to be heading in the opposite direction. Governor Abbott has been aggressively luring cryptocurrency-mining companies to the state, arguing that they will somehow encourage energy providers to build more capacity.
Crypto mining is a very energy-intensive industry. As The New Yorker reported, “Crypto-mining facilities in Texas already consume enough electricity to power several cities. By 2023, it is estimated that ERCOT will account for twenty per cent of the global bitcoin network, and, by the end of that year, the state’s crypto-mining facilities’ power demands may have increased by as much as fivefold.”
It’s clear that Texas’s “free market”-obsessed leaders are irrationally and destructively doing the same thing over and over again and expecting a different result.
But there is hope — for energy democracy and stopping our climate crisis. All across the country, communities are awakening to the dangers of privatized energy and organizing to take back control of their energy systems. Coalitions like We Power DC, Public Power NYAnd Our Power MaineWe are fighting for clean, affordable, and equitable energy. The United Mine Workers of America recently broke with West Virginia’s Joe ManchinAfter the senator opposed climate legislation that would have allowed coal workers to transition into the renewable sector, As Olúfẹ́mi O. TáíwòRecently wrote, “The climate crisis is already here, and its impacts are accelerating. Our choice is in how to confront it, and whom to put in the driver’s seat.”
