Tag Archives: Texas

Mystery of free energy storage apparently solved by Texas retailer offering 100-percent wind power deal

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Michael Giberson

From the PR desk:

HOUSTON, Sept. 4, 2012 /PRNewswire/ – Direct Energy has launched New Leaf Energy, a new Texas brand that offers 100 percent renewable, air-pollution-free energy, 100 percent from Texas wind turbines. New Leaf Energy brings expanded product choice in Texas’ green energy market and a variety of plan options that ease the way for residential customers in Greater Houston, Dallas-Fort Worth, Corpus Christi and beyond to help support long-term sustainability of the region and the planet.

“New Leaf Energy is committed to renewing the future, one household at a time,” said Rob Comstock, senior vice president at Direct Energy and general manager for the company’s Texas residential business. “It meets one of the industry’s highest standards by sourcing only 100 percent Green-e® Certified renewable wind energy, at rates designed to make renewable energy easily accessible for consumers. By choosing New Leaf Energy, they are making a statement to electricity producers that they support and prefer electricity provided by renewable sources. As more people sign up with New Leaf Energy, more renewable energy is produced.”

Consumers signing up for this product are promised their power is sourced only from “100 percent Green-e® Certified renewable wind energy,” and what’s more that power is “100 percent from Texas wind turbines.”

I don’t see any asterisks tagged on to these claims where they explain – hey, the wind doesn’t blow all of the time, the sun doesn’t shine all of the time, and there is hardly any hydropower in Texas even in years without a drought, so once in a while we will supplement your power supplies with a mix of coal, natural gas, and nuclear energy and then we will buy extra wind power sometime later. Nope, in the press release and on the company website the claims are “all renewable, all of the time.”

Therefore, officially, I am amazed. Since Direct Energy doesn’t plan to cut off its “100 percent Texas wind” consumers when Texas wind power production drops off, I can only conclude that the company has solved the complex technical issues surrounding energy storage.

SOMEWHAT RELATED: “Renewable Incentives Spark Debate at Texas Hearing” from the invaluable Texas Tribune.

ADDED: In case you’re wondering, there are not a lot of ski lifts in Texas either.

Smart shopping for electric power just got easier in Houston

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Michael Giberson

CenterPoint Energy, the Houston-area electric distribution company, has launched MyTrueCost.com to help area retail electric customers shop for electric power. Help may be needed: currently 43 companies offer a total of 239 different service options in the CenterPoint service territory according to data from Powertochoose.org, the Texas PUC’s retail power website.

The basic idea is pretty simple: customers sign up, TrueCost accesses their smart-meter based electric power consumption data and estimates bills, the customers provide some information on the kind of retailer and contract they want (low price, environmental characteristics, number of PUC complaints, years in service, etc.), and then the website identifies the contracts that appears most suited to the customer.

TrueCost doesn’t search through all possible contracts, however, just contracts from the several retailers that have agreed to participate. Currently 10 of the 43 companies in the area are participating. Customers should be aware that TrueCost gets paid a flat fee by the retailer for each customer that signs up through the service. (TrueCost noted in the Q&A that the flat fee means that the service doesn’t have an incentive to upsell customers to more costly contracts.)

Simple. Smart. Cool. (And speaking of cool, the young people of Houston would like you to know that a Forbes real estate blogger has named Houston the #1 on its list of America’s Coolest Cities to Live.)

By the way, TrueCost also charts average retail power prices offered in Texas’s competitive retail power markets and provides commentary in an accompanying blog.

One-year plans keep momentum from summer price spike

One-year plans keep momentum from summer price spike (July 5, 2012)

INVITATION: If any of our Houston area readers have tried out MyTrueCost, send me an email and let me know what you think. My email address can be found here.

Nest learning thermostat featured in Reliant’s Learn & Conserve Plan

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Michael Giberson

The Nest smart thermostat made a bit of a splash when it was released (and countersplash from other energy equipment makers who said they offered similar features, and counter-countersplash from folks who said “sure, but not that worked so well for consumers,” etc., etc. We talked about Nest here, here, here and here.). Then, like other geez-whiz gadgets, they mostly disappeared from the energy tech geek press.

But Nest hasn’t really disappeared, it is only that “gee whiz” only gets you so far. Just recently Nest and Texas power retailer Reliant joined together in Reliant’s Learn & Conserve energy contract. Customers signing up for the rate get a Nest learning thermostat and a 24-month fixed price contract. Cool! (See detail at Reliant’s website; see on Nest blog.)

Of course the energy econ geek in me says, “What?? A fixed price contract??? Couldn’t they do something more interesting than that?” But what the heck, it’s a marketplace and if Reliant isn’t more creative with their rate design that just means that there is opportunity for others to innovate. In the meantime the energy econ geek in me says, “Cool!”

Hayek’s knowledge problem as an issue in electric power market design

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Michael Giberson

Recently the Brattle Group submitted a study of resource adequacy issues within the ERCOT power system and the policy options available to ERCOT and the PUC of Texas, the regulatory authority overseeing the ERCOT system. As the Brattle report points out, ERCOT has so far stuck with a so-called “energy-only” market design while the other RTO markets have implemented some form of capacity markets to help assure the market will be adequately supplied with generating resources.

The Brattle report is available from the ERCOT website. The PUCT is taking comments on the report in Project No. 40480, “Commission Proceeding Regarding Policy Options on Resource Adequacy.” A workshop will be held to discuss the Brattle recommendations on July 27, 2012 at the PUCT offices in Austin.

BP Energy Company finds Hayek’s knowledge problem as a key issue in electric power market design. After quoting a segment from “The Use of Knowledge in Society,” BP Energy Company writes:

Hayek’s “Knowledge Problem” and its optimal solution – decentralized commercial markets – provide the best lens for regulators to see the fundamental issue in electricity market design in response to rapid technological change and increasingly diverse groups of willingly innovative buyers and sellers. As the procurement and use of electricity cross a complexity threshold, as a few customer classes are transformed into a multitude of individual market participants, electricity market design needs to move away from centralized planning to a decentralized procurement of resources, to be both sustainable and efficient in meeting the resource adequacy objectives for the bulk power system and society at large.

The unwieldy process of centralized procurement of resources in the organized markets within the Eastern Interconnection is not proving to be a healthy evolution for electricity markets; instead, these interventions have greatly interfered with the natural development of networks among market participants that can lead to a healthier market ecosystem. Utility economist Kenneth Rose, in a recent working paper that highlights the continuing problems of centralized procurement in the capacity mechanisms in the Eastern Interconnect, reprises the “Knowledge Problem” in the following analysis:

“…. They (RTOs and regulators) are attempting to create a final product market for something that is merely one input of many that are needed to generate electricity.

This may explain why the capacity construct that the RTOs are using has become so complex. Every aspect of the capacity market design has to be redesigned and readjusted to fit changing conditions, rather than allowing the market participants to adjust to market information over time, as happens generally in competitive markets…..

The complex mechanism of capacity markets is not self-sustaining since the RTOs and regulators will need to continuously update and fix the apparatus as conditions change…. A truly competitive market, in contrast, changes as circumstances change, without the stakeholders having to agree on changes and without the regulator having to insert its judgment by choosing and approving what it thinks will work. “

The result is that to date, regulators, not market participants, procure virtually all of new resources. Some of those resources, especially “demand resources,” are poorly designed and have questionable value. Incumbent technologies and business practices are favored over innovative ones, to the ultimate detriment of consumers and local businesses.

As might be obvious by the name of this blog, we at KP find Hayek’s identification of the knowledge problem a key discovery in the long history of the study of markets. It is no surprise that efforts to manage the growth of markets run up against knowledge problem issues, and regulators and other market designers would be wise to consider its significance.

NOTES: Hayek’s article, “The Use of Knowledge in Society,” was published in the American Economic Review (September 1945) (ungated here and here). Rose’s report is “An Examination of RTO Capacity Markets,” IPU Working Paper No. 2011-4, Michigan State University (September 2011). I mentioned the Brattle report on ERCOT resource adequacy issues in this earlier post, see also this earlier post on capacity market issues.

Competitive power market in Texas faces supply concerns. Now what?

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Michael Giberson

The question troubling some folks in Texas’s competitive power market: Will Texas consumers want to consume more electric power than suppliers are able to supply? A resource adequacy review by ERCOT, the power system and market operator for most of the state, suggests that consumer demand may outstrip resources available as early as 2014. ERCOT officials have also warned that extreme temperatures this summer could result in reliability concerns, though the most recent review reveals resources will likely be adequate.

The longer-term resource review has attracted a number of media reports, including this morning’s story by Rebecca Smith in the Wall Street Journal, “Power Shortage Vexes Texas: Report Urges Price Increase to Spur Industry to Build More Generating Plants.” See links to other stories at the end of this post.

The “report urging price increases” is that of the Brattle Group, “ERCOT Investment Incentives and Resource Adequacy,” June 1, 2012. ERCOT asked Brattle to study generator investment criteria, the connections between incentives, investments, and resource adequacy, and policy options to support resource adequacy. The Brattle report will bear further study, but for now a few comments about it and the WSJ article.

The newspaper story, following the main thrust of ERCOT’s request and therefore the main part of Brattle’s response, is focused almost entirely on price incentives to potential investors in additional generation resources. The story mentions several of the relevant factors: demand growth, low power prices due to low natural gas prices, ERCOT’s “energy-only” market design, and the lack of significant connections to neighboring grids. The rest of the story plays out as expected: generators say the current offer cap is too low and consumer representatives express horror at the prospect of paying extreme prices to generators who might refuse to expand.  The story entirely misses the possibility that consumers are not complete idiots willing to sit idly by in their air-conditioned palaces and pay 100 times the usual power prices.

Consumers have two easy ways of avoiding any potential $9,000 MWh price: (1) have a fixed price contract with a retailer or (2) simply cut power consumption during pricing peaks. Few consumers actually paid $3,000 MWh last year during February 2011′s few hours of rolling blackouts or the summer’s infrequent emergency conditions. Instead what happened in February and summer 2011 is that retailers who did not secure all of the power their customers wanted by short- or long-term contracts ended up paying the $3,000 price (but just for the additional supplies they needed) AND power generators under contract to supply power who found themselves unable to meet their commitments also ended up paying the $3,000 price (for any committed capacity that they could not deliver). The market risks are divided up between retailers and generators and very little of it is pushed out directly onto the consumer.

Obviously, whatever risks generators take on will be reflected in the prices they’ll seek in contracts with retailers, and whatever risks retailers take on will be reflected in the prices that retailers offer to consumers. But competition among generators to contract with retailers and competition among retailers to sell to consumers should work to do well one thing that the usual rate-regulated monopoly power systems do poorly: competition should shift risks onto the market participant who can most efficiently manage the risks. Consumers typically are not the best able to handle the risks, so competitive markets usually won’t stick them with the risks.

The Brattle report makes a couple of additional valuable points. First, the study assumes only the current level of demand response activity, but additional price-responsiveness on the consumer side of the market would provide additional resource adequacy support. Second, the “1-in-10″ reliability standard typically employed in power systems reliability analyses has rarely been studied from an economic standpoint. The report suggests that overall reliability of delivered power to consumers could be improved and costs reduced by shifting some of the expense away from the bulk power system and toward distribution systems.

So far as I have noticed, the report itself doesn’t recommend a particular policy course, but simply reports on some of the likely advantages and disadvantages of several resource adequacy policy options. The Brattle press release accompanying the report does, however, indicate a clear preference for adding a centralized forward capacity market (similar to that employed by PJM; though note not everyone is happy with PJM’s capacity market).

One last bit of perspective. It is the goal of a resource adequacy study to be excessively cautious. Things probably will not turn out as bad as projected, in part because suppliers, retailers, and consumers will continue to adjust to changing conditions.  But things could be as bad as projected, and that is exactly what the study is intended to highlight.

RELATED:

NOTE: Prices above are all quoted in $ per Megawatt Hour (MWh), a typical price metric for wholesale markets, but consumer bills are usually quoted in cents per kilowatt hour (kwh). Typical wholesale prices in ERCOT have been running between $20 and $50 MWh, the equivalent of between 2 and 5 cents kwh. Typical consumer prices in ERCOT range between 8 and 14 cents kwh. The $3,000 MWh price cap is equal to $3 kwh (so $9,000 MWh is the same as $9 kwh or about 100 times  typical retail prices).

On belief in the possibility of price spikes

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Michael Giberson

Laylan Copelin, reporting for the Austin American-Statesman, documents the power system resource issues currently troubling state utility regulators in Texas: “State set to grapple again with question: How to encourage more private-sector power generation?“

Texas suffered one rolling blackout last winter and narrowly avoided another this summer.

The weather extremes might have exposed an Achilles’ heel to the Legislature’s decade-long embrace of a deregulated market approach to electricity generation: Investors are reluctant to invest in new power plants because they can’t make money despite rising demand that is testing the state’s electricity capacity.

Power generators are urging state officials to tweak the rules to raise wholesale prices, while consumers are arguing that they would face higher prices with no assurance that the new generation would be built. They say let supply and demand work, but that butts heads in some instances with the overriding concern to keep the lights on.

In areas of the country with traditional regulated privately-owned utilities this isn’t much of a problem. The regulator determines a resource adequacy goal and prudent expenses undertaken by the utility in pursuit of that goal get folded into electric power rates. The arrangement is, by design, low risk and profit enhancing for the utility. (And I suppose you could say it works, at least in the sense that none of the major regional blackouts have resulted from a shortage of generating resources. Critics would complain about costs and efficiency, but not the efficacy of the regulated approach.)

In ERCOT’s market only the wires companies remain fully regulated and the state regulator has limited tools available to direct additional generation resources to be built. Instead the theory behind the decade-old market re-design was that prices were to be relied upon to incent investment. As part of the “energy only” market design approach, Texas selected a price cap at about $3000/MWh as compared to the $1000/MWh price cap that most other similar markets impose in the United States. The idea is that the prospect of occasionally earning extraordinary returns would help prompt sufficient investment.

In short, according to one generation company rep, “The ERCOT market requires the developer to believe in the possibility of price spikes.” The problem is, she added, “it is difficult to get banks to finance ‘possibility.’”

Yes, maybe, but in a world in which an Australian cricket player can insure his mustache for £200,000, it seems difficult to belief that no one can figure out how to estimate the likelihood of price spikes. Maybe the banks are not the best financial players to take the action, yet someone should be able to work it out. Right?

Of course, there are a pair of big players in the market that add a further dose of uncertainty to anyone trying to run the numbers: the ERCOT market itself and the Public Utility Commission of Texas. ERCOT is tasked with both ensuring reliable operations of the power system and running an efficient power market. Sometimes actions taken by ERCOT to ensure reliability – like paying uneconomic generators to stay online just in case needed – depress prices in the wholesale market.

The PUCT, just by contemplating a number of policies that could suppress prices in the futures, will inadvertantly cast a shadow over any current investment decision. Generator investments are built to last 20-, 30-, or 40 years. No one counts on 40 years of policy stability in making an investment decision, but the prospect that things may change this year or next in ways you can’t quite pin down will certainly make a prospective investor nervous.

The investment side of the ERCOT power market requires belief in the possibility of price spikes, but it is not at all clear how rational that belief is in a world in which the market operator and regulator feel pressured and empowered to eliminate such spikes. The PUCT should do two things to clear up the matter. First, to the extent possible PUCT should oversee ERCOT market reforms needed to limit the price-supressing effects of emergency reliability actions. Second, PUCT should affirm in the strongest voice possible that price spikes are a natural, infrequent but important part of the commercial wholesale power market environment that generators and retailers participate in, and therefore generators and retailers should get on with the business of managing the inherent price risk.

Texas gaining smart grid buzz

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Michael Giberson

Texas is becoming a recognized leader in smart grid development, and just wait, it is going to get better. One external bit of circumstantial evidence for this claim comes from a meeting last week at the White House hosted by Aneesh Chopra, Assistant to the President and Associate Director for Technology within the White House’s Office of Science & Technology Policy. When Chopra wanted to discuss the smart grid, he called on Texans: Barry Smitherman of the Public Utility Commission of Texas, Brewster McCracken of the Pecan Street Project in Austin, and representatives from Dallas-based Oncor, Houston-based CenterPoint Energy and Houston-based Reliant Energy. In addition, folks from Itron (Spokane, WA), Landis+Gyr (UK), and the Zigbee Alliance (San Ramon, CA) will be participating.

There are two sides to the smart grid world: the wires company-style improvements and the retail customer revolution. Things are happening in Texas on both sides. The wires company developments will come sooner, because it provides a foundation for the customer-side developments and because it is easier for incumbent utilities to understand and deploy. The retail customer revolution belongs to today’s innovators and explorers, who are likely not today’s well-established incumbents. The revolution will be slower, because in general consumers are reasonably happy with their power suppliers and don’t do much active shopping around. Eventually, however, it will be revolutionary.

Lots of places have rolled out smart meters, and utility smart grid investments are happening many places as well. But for the most part a smart meter tied to a customer on a cost-of-service regulated flat-rate tariff is like owning a smart phone connected to the Ma Bell monopoly of last century. There may be a certain cachet for gadget geeks in having such a thing, but otherwise it mostly just sits there.

Texas has, in the ERCOT-linked parts of the state, all of the pieces in place for a customer-driven revolution: the Texas competitive retail market, smart metering, a competitive wholesale market, and use of true interval meter data rather than load profiles to allocate wholesale costs to retailers. Consumers will better understand their use of electric power, that understanding will inform their energy choices, a competitive retail market place will allow creative retailers to work with customers to enhance their energy choices, the retailers will begin to engage the wholesale market differently, and the competitive wholesale market will adapt to the changing demands of power customers.

There is a lot of exciting engineering work happening, in Texas and elsewhere, but when it comes to a dynamic retail market that can make the most of that engineering work, Texas is the only place in the United States with a good foundation.

ERCOT reliability monitor issues report on the February 2 rolling blackouts

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Michael Giberson

The Texas Reliability Entity has issued its report on the ERCOT extreme cold weather events and rolling blackouts of February 2, 2011. Texas RE is the NERC regional entity for the ERCOT power system and contracted to the Public Utility Commission of Texas to serve as ERCOT reliability monitor for the state agency. In this latter role it was asked by the PUCT to report on compliance with ERCOT reliability rules during the cold weather event. (The ERCOT independent market monitor has already issued its report on market issues surrounding the February 2 event. See link to report, related KP post.)

In brief, Texas RE finds that ERCOT and ERCOT market participants took steps to prepare for the extreme cold, but the preparations were  not always adequate. For the most part it appears that parties complied with ERCOT protocols. In some cases, rules may have been violated and Texas RE is continuing to investigate. Texas RE notes it is working with NERC on further analyses of the events surrounding the rolling blackouts.

The report indicates that market participants were quick to learn from the failures of February 2. From the report at page 11:

Similar weather conditions occurred in the ERCOT Region on February 9-10; however, freezing equipment issues did not have the same impact as on February 2. ERCOT and many generation facilities implemented lessons learned from the February 2 event and prevented similar issues during the cold weather that followed on February 9-10. These lessons learned include improving winterization of the power plant equipment, starting combustion turbines further ahead in advance of severe temperatures to keep lube oil warm, and exercising moving equipment to ensure that the units will be available.

As previously noted here, powerful economic forces are already at work that will help avoid a repeat of February 2′s system emergency. Generator companies that did not deliver to the market the power they had committed day ahead suffered significant financial consequences (and similarly for retailers that had not contracted sufficient power in the day-ahead market to cover their customer loads, so ended up topping off at the extreme real-time market rate).

Here is the conclusion of the Texas RE report:

Texas RE’s investigation has revealed that, for the most part, ERCOT’s and Market Participants’ conduct during the Energy Emergency Alert that occurred on February 2, 2011, was consistent with requirements set out in the Protocols and Operating Guides. Loss of scheduled generation due to freezing pipes, valves, and instrumentation, and to a lesser extent issues associated with natural gas supplies, caused a shortage of generation reserves which ultimately required ERCOT to direct firm load shed in order to restore system reliability. Although ERCOT and Market Participants took steps to prepare for the expected cold weather, the actions taken proved to be inadequate or ineffective for the prolonged freezing weather which occurred February 1-4, 2011. However, ERCOT and many generation operators implemented lessons learned from the February 2 event and prevented similar issues during the cold weather that followed on February 9-10.

During the February 2 EEA Event, ERCOT Market Participants committed potential violations of the ERCOT Protocols and Operating Guides in connection with failures to meet Ancillary Services obligations, failures to meet Emergency Interruptible Load Service obligations, failures to execute manual load shed in accordance with requirements, and possibly with the performance of Black Start units. Texas RE will conduct additional investigations as necessary to determine the full extent and implications of non-compliance with the Protocols and Operating Guides, and will forward information to the PUCT for further action, as appropriate. Issues of possible noncompliance with NERC standards are being examined as part of Texas RE’s analysis in its capacity as the NERC Regional Entity for the Texas Region.

Is the deregulated market in the ERCOT region sufficiently competitive?

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Michael Giberson

Two groups of municipal utilities in Texas, long critical of electric power deregulation in Texas and ERCOT in particular, have joined forces to issue a report, “The story of ERCOT: The grid operator, power market & prices under Texas electric deregulation.” The municipals describe the report as examining “governance issues related to ERCOT as an organization as well as deregulation issues related to ERCOT as a region.” In general, they assert that ERCOT has been costly, has suffered some significant episodes of mismanagement, the market hasn’t been as competitive as needed, and that power prices have been too high in the ERCOT region as a result.

Overall “The story of ERCOT” looks like a pretty good effort. ERCOT is a complicated entity, but worth understanding. The report contributes to a better understanding of ERCOT. But in the one section I chose to examine carefully, I was less satisfied.

Among the questions they ask is the one I pulled for the title, “Is the deregulated market in the ERCOT region sufficiently competitive?”, addressed specifically on pages 70-71. Here the report authors have a handful of complaints:

  1. “Questionable trading practices … very similar to those that helped undermine the California market … known as ‘hockey stick’ bidding.”
  2. The largest generator, TXU (now Luminant), was frequently a pivotal supplier in the market – able to set market price regardless of the actions of competitors.
  3. TXU was charged with market power abuse by the PUC in 2005. (A recommended fine of $210 was later reduced to $15 million.)
  4. Another company acknowledged in engaging in practices very much like hockey-stick bidding in 2007, “which has been found to violate market rules elsewhere in the nation.”

Hockey stick bidding, in which a generator offers the last few megawatts of power at a price substantially above the marginal cost of supplying that power, is a problem. If the power market were always competitive, consumers could be agnostic about individual generator’s offers; occasionally conditions will give generators temporary-but-substantial amounts of market power. These brief moments of market power are not always predictable, but hockey stick bidding means that generators don’t have to guess when they have market power, they just use a bidding strategy in which most of their power is offered at competitive levels and the last tiny bit at monopoly prices. The market in effect reveals that the generator has market power by dispatching all of the unit’s power, and having revealed the market power the market then does the generator the favor of automatically exercising it on the generator’s behalf.

There are arguments for and against allowing generators full flexibility in their offers, including allowing hockey stick bids, but on net consumers are right to oppose the practice. (I’m not at all sure what they mean by “very similar to those that helped undermine the California market”; California’s market fell mostly due to a host of other kinds of bad market design choices which exposed the market to manipulation and kept the consumer-side of the market mostly unable to protect itself.)

Luminant remains a large player in the market, with a market share that should continue warranting special attention from the PUC and ERCOT’s independent market monitor. The report doesn’t mention that Luminant has entered into a “Voluntary Mitigation Plan” (VMP) in 2008 as part of the settlement producing the $15 million fine. The point of the VMP was to deprive Luminant of the ability to exercise any market power.  If the municipals have continuing concerns with Luminant then it would be useful to know what is wrong with the VMP.

I tried tracking down the reference to “another company … engaging in practices very much like hockey-stick bidding in 2007.” A footnote points to page 11 in Jay Zarnikau and Parviz Adib, “Will the Texas market succeed, where so many others have now failed?” (Available from Frontier Economics), but I didn’t find an explanation there. Generally speaking, the Zarnikau and Adib paper takes a more optimistic tone than the municipals’ report does.

Overall, in this brief section of the paper, I would have liked a little more analysis and not just a list of complaints. It is one thing to see apparent problems, but much more useful to diagnose the sources of the problem and suggest improvements.

Roundup of news and commentary on the Texas rolling blackouts

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Michael Giberson

A collection of news and commentary on the February 2 rolling blackouts on the ERCOT grid in Texas.

Not a complete list of stories by any means, but plenty food for thought. Some of the above will likely be discussed further on this site.

Also, the ERCOT grid has set another winter record, reaching 57,282 MW on Thursday, February 10. ERCOT managed without rolling blackouts this time, offering support for my conjecture that ERCOT and the industry would not be caught unprepared for such a surge so soon after last week’s emergency.

Meanwhile, outside ERCOT, El Paso is still suffering repercussions from problems caused in part by the blackouts imposed by El Paso Electric Company last week, after two of the company’s generators failed. Because El Paso Electric remains a traditionally regulated public utility, the failures there stand as a challenge to anyone trying to pin the blame for ERCOT’s less-regulated, more-competitive market structure. Because El Paso Electric is interconnected to other utilities throughout the western United States, the failures there also stand as a challenge to anyone trying to pin the blame on ERCOT’s policy of electrical isolation from surrounding power systems.*

(*This second “anyone” implicates me. See my “Cold snap brings rolling power outages to Texas; is ERCOT policy of isolation at fault?“)