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Blackouts raise lots of questions about electricity industry

Last week’s blackouts ought to be a wake-up call to policymakers in Austin that it is time to think differently about the reliability of our electricity supply.

Unfortunately, last week’s extreme weather exposed a number of weaknesses that have occurred before but do not appear to have been adequately addressed in the past.

If our state’s leaders delegate these highly technical issues to industry, which does not always view change to be in its best interest, such issues might not be solved this time.

Here are some hard questions that ought to be asked:

Why did 80-plus generation plants lose power? The fact that so many plants failed indicates a widespread problem that extends across the generation fleet. After the 2003 Northeast blackout, Congress imposed mandatory reliability standards. It needs to be determined if we have the right standards and whether the standards are being enforced.

The issue extends beyond plant failures. Some power plants last week did not have enough natural gas supply to continue generating electricity. While the state relies on natural gas plants to provide the bulk of its power generation neither the Railroad Commission and the Public Utility Commission has responsibility for assuring that these plants receive enough natural gas in an emergency. The same problem occurred in 2003 when natural gas plants were forced out of service and changes recommended then do not appear to have been implemented.

During the blackout, wholesale electricity prices spiked to $3,000 per megawatt hour for several hours. Did prices jump because generation was intentionally withheld? In 2008, similar price spikes bankrupted retail electricity providers. Though this situation was averted, we need to examine whether allowing prices to spike in an emergency simply might result in a windfall to generation companies.

Why isn’t there more emergency backup on the grid? Though the Texas Public Utility Commission established an emergency backup program after the 2006 blackout, the program was opposed by self-interested generation companies and energy traders, who succeeded in neutering the program. As a result, it remains undersubscribed today.

Beyond these issues, questions should be asked whether utilities took sufficient actions to inform and protect customers.

Why aren’t we using the Web, social media and e-mail to notify customers about power outages and restoration times? This technology is available, and it would have provided better information to customers and prevented literally tens of thousands of calls to utilities.

Are we doing enough to protect our most vulnerable citizens? There were news reports of a death in Houston because of medical equipment failing because of the loss of power and of hospitals in Dallas without power. Why weren’t these customers on the lists that prevent disconnection in the event of blackout?

Recently, the PUC tightened requirements for customers on life-support equipment to remain connected in the event of an emergency or in the case of nonpayment.

Policymakers also need to consider what additional actions will ensure that future unexpected circumstances do not result in blackouts. For example, we face serious challenges integrating wind generation into the grid because wind farms do not provide a steady source of power. There has been pushback by wind generation companies to retrofit wind turbines to avoid reliability issues, and, as a result, these issues remain unresolved.

The fact that our system is not well interconnected with other grids makes us susceptible to blackouts. Other parts of the U.S. that are more heavily interconnected are more flexible because they can lean on other systems when they get in trouble. Texas has made the decision to go it alone, which allows us to control our own destiny without federal oversight, but it means we don’t have the ability to rely on other grids to back up our grid. Better interconnection to ensure reliability and stability of our grid is an idea whose time might have come.

This is not intended to be critical of staffs at utilities, the Electric Reliability Council of Texas and the PUC, whose jobs are to maintain reliability of our electric system. But they need additional tools to ensure that we have the most reliable system in the country.

Last week’s blackouts could have a silver lining if they encourage change. Let’s hope that our policymakers in Austin view these blackouts as a wake-up call rather than use excuses to return to business as usual.

Perlman, a commissioner on the Public Utility Commission of Texas from 1999 to 2003, is an industry consultant.