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Private Power Utilities Wrecked California in 2019. They Wrecked Texas This Year. Is Your State Next?

There's been guffawing on both sides over the fact that Texas now has its own electricity crisis to match the one California had in 2019. This is because there are a surprising number of people who judge the success of conservatism and liberalism by which state is "doing better." It's a weird little game.

In this case, though, it turns out that both states suffered from the exact same problem: private companies that declined to bother themselves with taking safety seriously.

In the case of Texas, their power operators didn't engineer their systems to fail gracefully in the face of a huge weather event. That's expensive! This left them with only one option when that event finally occurred: they pulled the switch on millions of customers and left them completely without power for days. This was because they didn't want to spend the money to do things right, and Texas regulators let it slide.

California, on the surface, looks entirely different, but is actually nearly identical. The simple story is that the long series of blackouts in 2019 were caused by a manic wildfire season. But why should wildfires cause blackouts? Not because the fires damaged power plants or transmission lines. It was the other way around: faulty transmission lines can cause wildfires. And why can they do that? Because even after a decade of lawsuits, judicial orders, and attention from regulators, PG&E refused to fix its thousands of spark-prone power lines running through national forests. Everyone knew how to do it—better maintenance of transformers, clear cutting areas around transmission towers, etc.—but PG&E just didn't. So when the high winds came, they shrugged and turned off people's power instead. After all, they're already bankrupt thanks to other acts of negligence. They can hardly afford a spate of new lawsuits claiming that their transmission lines destroyed entire towns—as they had the previous year in Paradise.

It doesn't take a degree in engineering to figure out the solution to these twin crises: private utilities need to be regulated in a serious way. They won't spend money on avoiding seemingly rare events unless someone makes them, and that someone is the state legislators, the regulatory commissions, and judges. They've now failed in the two biggest states in the union. Who's next?

26 thoughts on “Private Power Utilities Wrecked California in 2019. They Wrecked Texas This Year. Is Your State Next?

  1. Brett

    At this point, PG&E investors might welcome the state simply taking over the company, since they'd get paid out in compensation and could move on, and the costs of infrastructure and the company would now be the California state government's problem.

  2. MontyTheClipArtMongoose

    Many will think Florida, because, Florida, nut my guess is Georgia. Brian Kemp needs to do some to earn back Movement Conservatives good graces, after his abysmal performance in Stopping the Steal. Deregulating Georgia Power & Light is just the move to do so.

      1. Salamander

        I'm just glad Trump isn't in the White House to order flags throughout the entire country to be lowered for that pile of human garbage.

  3. Daniel Berger

    "even after a decade of lawsuits, judicial orders, and attention from regulators, PG&E refused to fix its thousands of spark-prone power lines" and neglected maintenance.

    Meanwhile, in Texas, blind faith in the "free" market allowed their power company to get away with no maintenance.

    I'm failing to see a difference. Regulate or don't regulate, oversee or don't oversee, nothing got done.

    1. kingmidget

      In the instance of PG&E, which is a publicly-traded company, it is the beauty of the profit-motive at work. In the instance of ERCOT, I'm not exactly sure what their structure is, but I'm guessing it is the beauty of conservative principles at work. On some level, they are one and the same.

      1. iamr4man

        I live about a mile from where the San Bruno gas pipeline exploded. We have friends whose house was badly damaged, but they were lucky in that the house next door to them burned to the ground. You might know that the “for profit motive” extends to executive compensation:
        “ On January 13, 2012, an independent audit from the State of California issued a report stating that PG&E had illegally diverted over $100 million from a fund used for safety operations, and instead used it for executive compensation and bonuses.”
        https://en.wikipedia.org/wiki/San_Bruno_pipeline_explosion

  4. Altoid

    Couldn't agree more that they need to be regulated. From what I've read, in some parts of the country they actually are, and in ways that would matter in Texas now-- requirements on weather-protecting equipment, and adequate backup generating capacity, for instance. These are the two things that seem to be most lacking in Texas.

    I'd quibble about the "failing gracefully" part-- they didn't provide for operating their equipment in sub-freezing temperatures, at any point from getting gas out of the ground to operating the generators, and had no way to bring additional power into the system. That *is* their fault and the result of non-regulation, but it couldn't be localized or announced ahead of time, if that's what "gracefully" means. Maybe in CA they pre-announced where the brownouts were going to be? They can't do that in a grid-wide failure like the one that started in Ohio in 2003 and hit the whole Northeast, or just now in Texas. That's all going to happen in very short order.

    But on the general point, yes! Regulate the hell out of these systems, and don't allow Texas to stay off the North American grids. Both words in the phrase "public utility" need to mean something.

  5. iamr4man

    My memory goes back further than 2019:

    “When a forest fire shut down a major transmission line into California, cutting power supplies and raising prices, Enron energy traders celebrated, CBS News Correspondent Vince Gonzales reports.
    "Burn, baby, burn. That's a beautiful thing," a trader sang about the massive fire.
    Four years after California's disastrous experiment with energy deregulation, Enron energy traders can be heard – on audiotapes obtained by CBS News – gloating and praising each other as they helped bring on, and cash-in on, the Western power crisis
    "He just f---s California," says one Enron employee. "He steals money from California to the tune of about a million."
    https://www.cbsnews.com/new...

    Enron stole billions from California by deliberately shutting down power to manipulate the market. After years of kicking our budget deficit caused by this, Governor Brown raised taxes to pay off the shortfall. My sympathy for Texas is tempered by the fact that Texas pretty regularly celebrates when California suffers any kind of disaster.

    1. Joseph Harbin

      Texas pretty regularly celebrates when California suffers any kind of disaster.

      Back in the day I flew from L.A. to Houston for a meeting with a customer. The first twenty minutes he spent mocking dumbass Californians for failing to keep the lights on, despite news already breaking that Enron was behind the outages. He went on and on with such glee it was truly bizarre. Maybe on occasion someone would joke about a sports team, but I never had anyone else mock the entire state like that. Hardly professional, to say the least. That was an eyeopener. I hope he didn't have to burn all his furniture to keep warm this week.

  6. climatemusings

    While Texas certainly screwed up in many ways, some of these problems are actually inherent to the bizarre way in which power systems are really one large coupled machine... see, e.g., the Northeast Blackout of 2003.

  7. Joseph Harbin

    Let's not forget the California electricity crisis of 20 years ago.

    a. GOP governor (Wilson) signs utility dereg bill (1996)
    b. TX energy company (Enron) manipulates market
    c. Outages and price spikes lead to recall of Dem gov (Davis)
    d. GOP governor (Arnold) elected 2003

    On a larger scale, Texas is more than just an innocent victim of Ol' Man Winter. (Or Mother Nature, as it was with Hurricane Irma.) The unprecedented is happening there now because the planet is undergoing climate change. No country has been more responsible for carbon in the atmosphere than the US, and no state more than Texas. To no small degree, the damage the state is suffering was not just preventable, but is self-inflicted.

  8. JimFive

    What's the solution to PG&E though? They were regulated, they just refused to fix what they were told to fix. (Note, there were 3 dam failures in Michigan for the same reason, the owners refused to make the repairs the State told them to make.)

    What can/should California do? I doubt that they can just fix it and then bill PG&E (That's what they do if you don't mow your lawn). Power line repair probably can't be down without the cooperation of the utility. Can they take the infrastructure away from PG&E and then charge them for it's use and repair? How would that work?

    Regulation presumes that the regulated will do what they're told, or that there will be meaningful consequences that get the desired result. Fining them isn't getting the lines fixed.

    1. J. Frank Parnell

      PG&E is a government sanctioned monopoly. The state and federal governments need to get serious about sanctions. When I worked in the field of FDA regulated medical devices I was always struck that while civil fines had some effect on bad behavior by corporations, what really got their attention was criminal indictments of the management.

    2. dausuul

      "What can/should California do? I doubt that they can just fix it and then bill PG&E."

      Why not? They would have to pass a law allowing them to do so, but I see no reason they couldn't pass such a law.

      "If you fail to perform the required maintenance by X date, the State of California is entitled to do it for you, and bill you for the cost. And that's the cost of the contractor *we* hire, not the cost of the contractor you would theoretically have hired if you'd hired one."

      1. Larry Jones

        "They would have to pass a law allowing them to do so, but I see no reason they couldn't pass such a law."

        PG&E no doubt has bribed contributed to the campaigns of a significant number of legislators on both sides of the aisle, to keep such laws from passing.

  9. NotCynicalEnough

    In the PG&E "No good deed goes unpunished" file, they have redefined "peak" power rates form being 1pm-9pm to 4pm to 9pm. Why? Well, primarily because California is now awash with consumer generated solar power from 1pm to 4pm especially from March to September sometimes so much so, that they sometimes have to pay other states to take it off the grid. I'm sort of surprised nobody has even suggested building a hydrogen generation stations to suck up the excess. Make hydrogen while the sun shines, burn it over night. Even better, the "waste product" would essentially be distilled water which I'm sure California can find a use for.

  10. Pingback: Republicans are determined to learn the wrong lessons from the blackouts – Off the Kuff

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