Disaster in Texas as regularized power companies fail to cope with severe weather events

The Texas power system collapsed and 4 million people were left without power on one of the coldest days in a long time. The problem is that it happened in the United States, in theory the strongest country in the world economically (in other aspects as well) and in terms of energy as well, since lately with fracking it had recovered its position as an oil and gas extractor, but also as an exponent in the field of nuclear technology, hydroelectric, etc.

Instead a replica of what happened in Venezuela occurred in March 2019 (although the crisis goes back much earlier and still continues). In the case of the latter, it depends on few power plants and is mega-concentrated: thermal power plants and a mega-reservoir (Guri, 10,325 MW)1. The centralized and concentrated system has problems when the supply fails or one of the power plants fails. In this case, in addition to oil depletion, there was corruption, which diverted budgets for the power plants, and also in the case of Guri, something that is recurrent in hydroelectric plants all over the world: due to the climatic emergency, the water capacity of the reservoirs is lower and cannot produce the energy it used to produce under optimal conditions.

And the problem in Venezuela is easily replicable in any other place, because the chosen systems of capitalist electrification have always opted for the concentrated and centralized model. So it was in Puerto Rico also in 2017 when the island spent more than eleven months without electricity because Hurricane Maria devastated everything, including the oil-fired power plants, but especially the power lines, indispensable to transport electricity in a centralized production. It seemed that the institutional solution was going to be to opt for gas instead of oil, which in addition to costs, was going to give continuity to the same model. But in August 2020 the Clean Energy Act was passed, which commits PR to renewable energies in a decentralized way – the ones that were the solution in that crisis.

Also in common now with what happened in Puerto Rico, is that severe weather phenomena increase and are accentuated, in large part, as a cause of the climate emergency. Which, as well, as it’s now broadly accepted, it has been caused by humans, and among others, by the energy model based on fosil fuels.

In the case of Texas, this is also the problem: concentration and centralism. And there is another aspect that must also be taken into account when we talk about energy or electricity management: the ownership of this management. In the case of Texas, it is not trivial that this is the only state in the Union in which electricity is totally privatized (not to mention that nationalization is not a total guarantee of good management – this should be coupled with monitoring, follow-up, transparency, social participation, etc.).

In Texas, the companies ignored the above recommendations to prepare their electrical grid for the winter. Weather forecasts already announced severe conditions at least a week in advance. And the deficiencies of the electrical system have been known for more than a decade. In this case ERCOT and Entergy did not take any preventive measures. ERCOT (Electric Reliability Council of Texas) operates the electric grid and manages the state’s 75% deregulated market.

But we must also add that it is precisely the option of privatization, as in many other cases in the world, that is posed as a solution. The first consequence of privatization was an increase in Texas’ electricity bills. Private utility customers have paid $28 billion more than public utility customers since 2004.

During last week’s crisis, electricity prices skyrocketed to a peak price of more than $6,000 per megawatt-hour. One of the reasons was the state incentive system for power plants to supply more energy that was reflected in bills with variable tariffs.

Another aspect is what is the purpose of that energy, and in the current electricity market, as the name indicates, it is the «market». But the concentration of production and management means the enrichment of a few. This profit aim, together with the production model and other corporate aspects such as large investments in advertising or in supposedly altruistic matters, means an increase in the price of the bill. For example, we accept that a company like Avangrid (Iberdrola) comes out after the disaster announcing “Supporting Texas” with a contribution to the American Red Cross of 50,000 dollars. Although it is also understandable as a publicity coup. Especially considering that it is the electricity companies that are the target of criticism. And their efforts to get us to switch companies!!!! The meteorological disaster, as sad as it may seem, is a fertile ground for them.

We also remember that this disaster does not come alone, but happens at the same time as the Covid 19 pandemic, which is affecting our communities, society and the world. In the USA it is affecting more because of the bad management resulting from the denialism of those who should manage it, and also because of those economic policies we mentioned (privatization, cutbacks, lack of budgets, etc). There are already 500,000 fatalities in the U.S. and as we said, they are victims of mismanagement. The blackout also put at risk thousands of Covid vaccines that are presumably essential and have cost a lot to produce.

Going beyond the current problem caused by the blackouts, we come up against the government that allowed these privatizations, and next to it, the whole international system that promoted it as a solution, as a magic recipe of neoliberalism.

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