Texas’s Energy Crisis Is America’s Future

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“The electricity would come on and then turn off immediately. Every 30 minutes or hour you would get this moment of hope,” said Paris Moran, of San Antonio, Texas. “I think that was the worst part, mentally.”

Moran and her parents, who both have chronic medical conditions requiring electronic devices, lost power on Sunday. Cell service quickly became spotty, too. Their main source of information was sporadic texts from family in different parts of the city, and message chains circulating sometimes false information. Once they could see their breath inside, they and several neighbors drove to a part of the city that still had power—but by the time they reached it, power was out there, too.

Power is coming on for longer and longer bursts at Moran’s family home, which allows them to try and heat up the house for a few minutes before it drops out again. It doesn’t solve the medical problem. “We’re dealing with that and trying to find ways to ease their pain without using the medical equipment,” Moran, who’s the digital director of the Sunrise Movement, told me. Nearby grocery stores have been cleared out. “We’ve been having one meal a day, just to make sure our food stock lasts for a while,” she said. “If we wanted another meal I wouldn’t even know where to go for that.”

The energy disaster in Texas this week was decades in the making. It’s also a preview for what power grids across the country could face as the climate crisis intensifies. The United States’ patchwork energy quilt will need dramatic reform to meet the challenges of both decarbonization and the extreme weather ahead. And unfortunately, the political response to Texas’s crisis so far shows how hard fossil fuel interests will fight to keep the current system in place.


Why Texas’s grid looks the way it does is a long and winding story. At the turn of the last century, investor-owned utilities struck a bargain with state governments, who were under pressure in the Progressive era to rein in what many saw as a class of robber barons in the burgeoning electricity business. In exchange for having a monopoly over their service area, power companies agreed to be regulated by statewide public service commissions that would set customer rates and ensure companies provided reliable and affordable service. Because the investor-owned utilities depended on regulators for their profits, buying them off, often through campaign contributions to commissioners, or the elected officials sometimes tasked with appointing them, was baked into their business model early on.

Utilities continued to grow and consolidate, and by the early 1930s just three firms controlled half of the country’s electricity through holding companies that could snap up power providers around the country. A seven-year investigation by the Federal Trade Commission begun in 1928 probed these firms’ illicit practices and political meddling. During that time, the $3 billion holding company empire owned by Commonwealth Edison head Samuel Insull collapsed. Having campaigned on the promise of publicly-owned electricity, and at the recommendation of the FTC, Roosevelt supported the Public Utilities Holding Company Act in 1935 over fierce objection from the power companies. Opposition to reform helmed was then—as it is often now—by the Edison Electric Institute, a trade lobby for investor-owned utilities.

Effectively, this law prevented empires like Insull’s, limiting the geographic spread of utilities, and placing constraints on the size and types of businesses they could have a stake in. It placed further limits on companies’ ability to increase rates, and forced them to divest assets including streetcars—to that point operated mainly by utilities. Electricity and natural gas infrastructure that crossed state lines would be regulated by the Federal Power Commission, which has since been replaced by the Federal Energy Regulatory Commission (FERC).

Founded in 1970, the grid operator known as the Electric Reliability Council of Texas (ERCOT)—which covers most all the state besides the upper panhandle, El Paso and parts of East Texas—became the country’s first “independent system operator” (ISO) when the state deregulated electricity generation in 1996. Essentially, it serves as a marketplace for distributing power generated from various plants out to customers. It also plans which of those sources the state will rely on under different conditions. A series of orders from FERC around the same time sought to encourage more regional transmission, and prevent individual companies from limiting which distributors could access power in energy markets. This led to the creation of several ISOs and regional transmission organizations (RTOs) around the country.

These are tasked with the same basic job as ERCOT: making sure electrons generated in different places go where they’re most needed, and are available as cheaply as possible and as reliably as possible through auctions on what’s known as the day-ahead market. Unlike ERCOT, these bodies—including the PJM Interconnection, an RTO in the mid-Atlantic, and the Midcontinent Independent System Operator (MISO), spanning the center of the country—are spread across several states and overseen by FERC. That’s why even though MISO was under stress for the same reasons as ERCOT, it was able to draw power from other areas to help meet demand. Texas relies more on prices than planning to make sure energy gets where it’s most needed, which is why prices have surged so dramatically in the last couple of days when demand soared. Essentially, the system is designed to reward plants with a high price per megawatt hour if they end up being needed. The problem Texans are living with now is that frozen plants weren’t going to work at any price.

Much like ERCOT, other ISOs and RTOs—staffed largely by utility industry insiders—are essentially a black box. They’re not subject to open records requests, and their meetings are often closed to press and the public. Exercising tremendous power over the country’s electricity system, these bodies notably don’t factor explicit considerations about climate change into their planning discussions—in part since FERC hasn’t directed them to. ERCOT reportedly spent more time joking about cowboy boots than discussing the snow storm that’s felled their state this week, but it’s not clear whether other more supposedly responsible grid operators are taking the planning challenges of extreme weather—much less climate change—any more seriously. Utilities themselves, meanwhile, “play the RTOs off of one another,” said David Pomerantz, Executive Director of the Energy and Policy Institute. “If an RTO wants to do something that’s not in a utility’s interest, a utility in PJM can threaten to go to MISO.”

“The RTOs were created with pretty good intentions,” Pomerantz told me. “No single state could take on the responsibilities of an RTO. But that doesn’t mean it has to be this way.”

Another way Texas’s grid management is unusual is its lack of a capacity market, which pays power providers to make sure their power is reliably available. In the current crisis in Texas, power sources ERCOT had counted on being available weren’t, although it’s not clear that incentivizing throughout the year them would have helped all that much. Indeed, paying for reliability in the PJM Interconnection, for instance, often ends up helping to keep sources of power online that may only operate for a few days each year, including coal and gas which could otherwise be shut down. Think of it like a carbon tax in reverse.


Deregulation added further chaos to Texas’s system. Deregulation—in this case, a poor-fit umbrella term for a range of legal changes to the structure of the power sector—isn’t universally bad. It’s forced power providers in unregulated states to turn off coal plants that have become uneconomical, allowing less polluting energy sources to compete. That’s been very good news for renewables, especially in creating an opportunity for third-party solar companies to enter the market. It’s also why wind has been such a success in Texas: not because Texans are all tree-hugging environmentalists, but because wind is cheaper.

Yet deregulation also created opportunities for new layers of middlemen to skim profits off an essential service. The most infamous case of this came from the Houston-based energy trading firm Enron. The company pushed for natural gas and electricity deregulation all through the 1980s and 1990, fostering close ties to the Bush family and Bill Clinton, and launching impressive state-by-state lobbying operations. After California deregulated, Enron executives cooked up a series of schemes that saddled the state with rolling blackouts and sky-high prices. State-level deregulation efforts stalled after that, though fossil fuel interests succeeded in getting PUHCA repealed in 2005, with legislation that built in a loophole exempting fracking companies from the Clean Air Act.

In Texas, deregulation meant (among other things) continuing to protect the grid from federal oversight via ERCOT and, in 2005, creating a system known as retail choice. While not unique to Texas, that’s been especially problematic given other features of the state’s power market. For the most part, retail choice means that customers can choose between long-term contracts with providers that guarantee them steadier rates, or those which pass along fluctuating wholesale prices for a nominal fee. The Public Service Commission, whose members are appointed by Governor Gregg Abbott, initially ordered ERCOT to raise prices to the $9,000 per megawatt hour cap when demand spiked this past week. They’ve since reversed that decision, so that prices can be below the cap too.

In all likelihood, the energy experts I spoke with for this story said, deregulation was not the reason why 4 million Texans lost power. But it’ll make its effects more painful. In the absence of strong consumer protections, consumers’ power bills could swing wildly in the wake of this fiasco. Whether spiking wholesale power prices show up on any particular consumer’s bill will depend on which provider they chose. The wholesale distribution company Griddy, the Daily Beast reported, has already slapped its ratepayers with bills as high as $8,162.73 for the month.

Griddy’s 29,000 customers, in particular, might take issue with former Governor Rick Perry’s assertion this week that Texans would prefer to “be without electricity for longer than three days to keep the federal government out of their business.”


As power failed in Texas, right-wing news outlets and politicians galvanized around an oddly specific narrative: that Texas’s modest embrace of wind power had damned the state to this mess. Simultaneously, ERCOT’s own data was proving that to be a baldfaced lie. It was the state’s fossil fuel capacity that failed most dramatically as infrastructure for natural gas, tasked with providing some 66 percent of power in wintry conditions, froze up. Wind and renewables performed about as well or better than they were expected to in extreme conditions. Given that Texas is a stronghold for both the GOP and the oil and gas industry, it didn’t take long for an anti-renewables narrative to coalesce; for the most part, pundits and politicians picked up the same polluter-friendly script they used after the “Super Bowl” blackout in 2011.

They did update it with a few new phrases. As their constituents suffered for problems disproportionately caused by natural gas failures, the Texas GOP went on a media blitz against the Green New Deal—a wide-reaching framework for fighting climate change that has been discussed by Democratic politicians but not implemented. On Tuesday, Governor Abbott told Fox News’s Sean Hannity that that the blackouts in his state showed “how the Green New Deal would be a deadly deal for the United States of America,” falsely blaming wind and solar in lock step with Tucker Carlson and other right-wing outlets.

“It was quite jarring that on one of the coldest nights—at that point people’s electricity had been off for over a day—to see the governor on television in a warm, well lit home blaming this entire blackout on something that hasn’t been enacted in our state,” Moran told me. “As constituents we can’t go and fix our energy grid for ourselves. And we haven’t had a say in those decisions that have been made about the energy grid for years.”

Like Paris Moran, San Antonio resident Alex Birnel, an organizer for the nonpartisan grassroots group MOVE Texas, has spent much of the last week just trying to stay warm. “It’s been a lot of bouncing around, trying to follow resources and shelter where power and heat may be. Or where water may be,” he told me. His apartment is in an old, uninsulated building. When we talked he was at his parents’ house, where there still wasn’t power but was a gas stove that they can boil water on, per advisories from state officials.

As an active member of the Democratic Socialists of America, which campaigns for grid democratization and public ownership, Birnel found the GOP’s anti-Green New Deal crusade especially galling. Its energy independence fetish is “being put to the test as a concept right now,” not the Green New Deal. And the state’s isolated, fossil fueled and unaccountable grid is failing. “It makes us sick but it doesn’t heat our homes.”

Yet climate campaigners still have to make the case that they can offer something better, particularly to those whose livelihoods depend on the status quote. “The Green New Deal is a non-starter unless politics begin to change in this state,” he says, noting both its outsized greenhouse gas emissions and sway over national politics.

While the Biden administration signaled in its first few days that climate would be a national priority, the president has been relatively quiet about both Texas’s crisis or the flood of misinformation being spewed by Republicans. Though he’s approved aid and been in talks with state officials, the breakdown of Texas’s grid seems like a natural opportunity for him to make a compassionate case for the sorts of massive green infrastructure upgrade he and Congressional Democrats have pledged to push for. As of writing, Biden has no plans to go to the Lone Star State. The country’s most prominent advocate for a Green New Deal, meanwhile—Alexandria Ocasio-Cortez—flew to Houston Friday after raising $2 million worth of relief funds off Twitter and through her email list.

Right now, Texans may be unusually open to seeing the benefits of federal investment in ordinarily unsexy things like transmission lines and grid integration. Those don’t have to be framed as a series of top-down orders from Washington, either. Birnel, for example, has been working to shut down San Antonio’s J.K. Spruce coal plant in the past few years. The push has involved bringing both union workers there and community members who live near the plant to the table. He’s against both “rushing” closures and arbitrary distant deadlines, favoring deliberate and “just” transitions that allow for democratic input. “There’s a petrochemical buildout in Houston and Corpus. We know that’s just leveraging the future. But we also know those towns are economically reliant on those industries and need a replacement. We can’t hope that’ll happen automatically, or think that by 2050 we will have done XY and Z. We need to talk about 2031 and 2032. Otherwise we will leave people behind.”

Where the right has capitalized on this crisis to push its retrograde ideas for more fossil fuel build-outs, the coming days and weeks could be a chance for climate campaigners to articulate what actually avoiding these kinds of disasters could entail. “Grid resilience” can mean jobs—not in new pipeline and drilling projects, but in everything from better backup technologies to weatherizing both power sources and housing. Factors like home insulation, Georgia Tech energy expert Emily Grubert stressed, are key to making sure a system can withstand extreme conditions. There will be times when the grid fails, she added, and it’s important that people aren’t left to freeze or melt when that happens. Making the entirety of the grid more democratically accountable—or even introducing new forms of public ownership—could go a long way, too.

Moran, of Sunrise, likens the Green New Deal to what she’s been seeing from her neighbors throughout the blackout. Mutual aid networks have sprung up in San Antonio and across Texas, offering rides to strangers to warm up and charge their phones, funds for hotel stays and hot meals. “A Green New Deal would create millions of jobs that would pay us to do the thing that we do best: take care of each other,” she says. “If we can invest in a resilient infrastructure package that is modern and will carry us through the next couple decades, it can give us an energy grid that is run for and by the people.”

The Biden administration’s rhetoric around green jobs to date has focused on factory jobs building wind turbines and electric vehicles. Beyond those and the many thousands of unionized jobs to be had building transmission lines, though, there’s also a nearly unlimited amount of work to be done insulating old housing stock or building new and more efficient units decked out with energy-efficient heat pumps. If enacted, participants in a federal job guarantee—a core tenant of Green New Deal ideas, and a bill introduced this week by Ayanna Pressley—could even get paid to do the sorts of critical relief work now being left mainly up to volunteers on shoestring budgets.

To address the chaos in Texas, Democrats could pitch the sorts of big, job-creating investments that Biden promised on campaign trail. Ted Cruz’s excursion to Mexico while his constituents shivered in their homes practically wrote the opening speech for such a proposal.

There may never be a better time to argue that big government can work for Texas—indeed, that it’s necessary to prevent future crises like this one. It’s hard not to imagine that’s exactly why the GOP mobilized so quickly and preemptively against a Green New Deal early this week: They know the system they’re loyal to caused this disaster. Surely a president who campaigned on preparedness, resilience, and green jobs should point that out—and offer something better.

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