“In 2011, even though the market was caught by surprise by one of the hottest summers in Texas history, Texans did not experience any blackouts because of reliable generation. Today, however, the reckless rush toward renewables has changed the situation completely. ”

– Bill Peacock, Energy Alliance (below)

Bradley: How did the just-completed Texas legislative session deal with the February Blackout that caused so much damage to life and property?

Peacock: The session had two issues to address here. One was dealing with the aftermath costs; the other was reform to prevent it from happening again. The lawmakers did poorly with both. 

Q: What did the Legislature do wrong in dealing with the aftermath? 

A: The Legislature failed to appropriately address the massive financial costs of the blackout, most of which came from the Public Utility Commission of Texas’s (PUCT) panicked decision to raise electricity prices to $9,000 per MWh and leave them there for three days.

“Other than desperation, why would the commissioners have increased electricity prices to the point that Texans paid more for electricity in one week than they had for the last three years combined?…. At the heart of the PUC’s decision seems to be a belief in theoretical market constructs over actual markets.”

“At the time, the new PUC chairman, Arthur D’Andrea, noted, ‘I think we all expected that when we were in load shed we would be at $9,000.’ In other words, the commissioners did not care what market prices actually were. They were going to impose their vision on the market, regardless.”

The Electric Reliability Council of Texas (ERCOT) is a government agency advertised as a ‘nonprofit corporation.’ It is also a government planning agency, not a free-market institution, under the thumb of state legislators and regulators.…

“Renewables will never catch up to modern, efficient sources of energy. But this hasn’t stopped federal, state and local governments from continuing to force consumers and taxpayers to subsidize renewable energy companies, making energy in America less affordable and reliable in the process.” (- Bill Peacock, below)

Four years ago, after the election of Donald Trump, I contacted the head of the editorial page of the Houston Chronicle requesting a visit with the editorial board to introduce myself, the Institute for Energy Research (IER), and the classical-liberal worldview applied to energy. I got no response.

I then resent the request and got a curt no caps rely from the gentleman as in don’t-have-time-for you. I then responded with the fact that IER was a go-to Trump think tank, and my being the founder and from/in Houston would add interest.…

“This seems a little crazy. During these negative price periods, suppliers are paying ERCOT to take their power…. You could … build a giant toaster in West Texas and be paid by generators to operate it.”

Some 15 years ago, Michael Giberson at Knowledge Problem commented on a strange phenomenon–negative pricing by wind power, where operators with very low marginal costs (the wind is free) were paying takers per KWh to gain big tax credits, mostly federal.

Giberson’s analysis (reposted below) identified the malinvestment and ‘big anti-conservation incentive’. But he did not focus on what cumulatively would result from this distortion: a wounded Texas grid from chronic low prices/margins knocking out thermal generation. The unreliables–via government privilege– knocking out the reliables (what Bill Peacock would call predatory pricing).…