Ed Note: The Great Texas Blackout five years ago, the worst energy debacle in US history, was misinterpreted as a ‘market failure’ by the mainstream press (and faux classical liberal Lynne Kiesling). This repost stands today as it was written three years ago.

Electricity specialists at the University of Texas at Austin recently revisited the Great Texas Blackout of February 2021. The op-ed, “Two years after its historic deep freeze, Texas is increasingly vulnerable to cold snaps – and there are more solutions than just building power plants” (The Conversation), spreads the blame and recommends more government planning, not less.

The authors want to let wind and solar continue to “saturate” the market and regulate (via “smart meters”) usage in your home and business to save the grid.…

Ed. Note: Five years ago, Storm Uri caused Texas’s centrally planned wholesale electricity market (ERCOT) to buckle, vindicating warnings about the state’s wind/solar reliance. The mainstream media implicated natural gas instead, failing to explore the why behind the why. Rather than deregulation, Texas post-Uri has chosen to add wind, solar, and batteries, while subsidizing natural gas plants to counter intermittency. This duplicated grid is now driving rates up in a state that could have relied on surplus natural gas instead.

It was not so much the story of freak weather triggering a market failure writ large. It was a classic application of the political economy of government intervention: the seen and the unseen, expert/regulatory failure, and unintended consequences. Don Lavoie, a preeminent thinker in the field of market-versus-government planning, once warned:

If the guiding agency is less knowledgeable than the system it is trying to guide—and even worse, if its actions necessarily result in further undesired consequences in the working of that system—then what is going on is not planning at all but, rather, blind interference by some agents with the plans of others.” 

Ed. Note: This week features four posts on the Great Texas Blackout of February 2021, the greatest mal-coordination in U.S. energy history. Today’s introduction is followed by 1) a blackout prediction that came to pass; 2) the fallacy of market failure; 3) a 2025 MasterResource blog recap of the debate; 4) a 2025 IER blog recap of the debate.

Market failure or government failure? The Great Texas Blackout of February 2021 (five years ago) is a case study that will forever be in debate. Why? Because the counterfactual–a real free-market in electricity–was not present (versus ERCOT et al. statism).

Still, never before had a “market failure” of this type occurred in the U.S. electricity market, not even in the late 19th and early 20th centuries (the free-market era) when the technology to prevent blackouts was much more primitive.…

Ed. note: The Great Texas Blackout four years ago triggered a social media debate that reconfirmed ‘classical liberal’ Lynne Kiesling as an advocate of centrally planned, highly regulated electricity. It also revealed a cadre of electricity planners who bristled at the argument that government failed, including Eric Schubert and Robert Borlick. The exchanges began a debate that led the author to write a free-market primer, Free Market Electricity, to resurrect the 1960s tradition of such names as Harold Demsetz, George Stigler, Milton Friedman, and Walter Primeaux.

Lynne Kiesling (above) came roaring out the gate on Blackout Day February 16, 2021. But ‘the queen of power markets‘ was wrong. The Electric Reliability Commission of Texas (ERCOT) was government–and at the center of the worst electricity crisis in history.…