Austin at Large: In Control, but Not In Charge
Amid the ruins of the Texas power grid, following two different paths to failure
When I was working in consulting back in 2015, right as Bill Magness was ascending to the top job at the Electric Reliability Council of Texas, I was on the team that developed ERCOT's current logo. It styles the acronym in lowercase forward-looking italics, echoes the shape of Texas without being all Lone Star about it, and features two wavy lines (oscillating at 60 hertz, the U.S. electricity standard) that represent a "perfect balance" of power in, power out. All that intentional visual suggestion is meant to communicate a promise of cool, smart, sophisticated professional expertise from an entity that, we learned as we did our research, wanted people to know that it was in control of the state's unique power grid and market but not in charge of it. This is now pretty much exactly why ERCOT is in so much trouble.
After last month's deadly, destructive freeze, angry and desparate Texans from Gov. Greg Abbott on down searched for a neck to strangle and found Bill Magness, who got fired because utilities are supposed to work flawlessly without the public needing to get involved. In our research, we found that when the few Texans who knew the name referred to "ERCOT," they didn't just mean the state-chartered nonprofit of which Magness is the well-paid outgoing CEO; only wonks knew that. They meant the whole Texas power grid and market, which more engaged audiences knew worked differently from the rest of the country and maybe the world, although they couldn't tell you how or why. They did have a sense that this uniqueness was something Texans should be proud of. Now that people have died, frozen on their own doorsteps, because of those differences, it all hits a lot differently.
Top of the World, Ma!
The folks operating the grid in the cool and dark ERCOT control room in Taylor, many of them guys in shirtsleeves like the ones who put people on the moon, have often been industry veterans for whom the gig was seen as a career pinnacle, a job for engineering savants. Likewise, the operation of the market into which participants buy and sell power literally all the time to keep Texas' lights on is, just like Wall Street, the province of highly skilled labor; there's a reason that the "independent market monitor" contracted by the Public Utility Commission to watch ERCOT was until last year one of the execs running the market at ERCOT, and thus one of the few people on the planet who understood it.
Being a staffer, even a lawyer, at the PUC is not nearly as prestigious or remunerative a gig, and the big players in the very lucrative Texas energy industry run circles around them all the time, and even the commissioners appointed by Abbott are in way above their heads and feel little urgency to use what power they do have. This is all the way it is on purpose; ERCOT, which basically functions as a trade group for the market participants, is supposed to be controlled by the PUC, which is supposed to be controlled by Abbott and his wingmen in the Texas Legislature. We all saw how well that's worked.
But the chaos of mid-February was the final destination of two different paths to failure. One, as we discussed last week, is the basic incompetence of the third generation of Republican white men in charge to run a government, or any large organization, which the state of Texas remains even as they have done their level best to downsize it. "Y'all were supposed to fix that 10 years ago and you didn't even though here, look, we left you detailed instructions" is not a great message to have to take to your next performance evaluation! It doesn't help when one of the people who you've caused the greatest pain through your failures – Houston Mayor Sylvester Turner – is one of the people who wrote those detailed instructions 10 years ago, when he was in the Lege. This is not a hard set of facts to build a campaign around, if you were of a mind to cause the Texas GOP grief during this legislative session and in next year's election cycle. Much of the state's political smart money still seems to think that the Democrats pose no real threat to Abbott and his potential 2022 ballot mates, and that the challengers they may face in the Republican primary are too preoccupied with MAGA posturing and culture warfare to mount a serious attack around the collapse of the power grid. Maybe so, but that's a pretty high-voltage line of attack they're just letting lie there on the ground where anyone can grab it.
The Best of All Worlds
The other path to last month's failure and destruction was that of hubris, the smug sense that the Texas power grid and market – "ERCOT" – was a manifestation of the Texas miracle, a triumph of free enterprise that could not help but gladden the hearts of loyally red Texans, proof that the GOP regime had nothing to fix. That's why its clowns and noisemakers were dunking on California just last year, when its power grid was being shaken by weather extremes that were frankly more intense than what Texas experienced last month. If we didn't already know that Abbott, Ted Cruz, Ken Paxton, and others of their ilk had no capacity for shame, we would expect some regrets now.
But it reminds us how so much of our 20-year-and-counting experiment in increasingly decadent one-party rule relies on this tough talk and image of success and strength that is now tattered. To the many new Texans of the last 10 years, having a go-it-alone power grid with no guardrails and no recourse in a catastrophe is not noble but insane. That's how ERCOT – and Texas – are now being rebranded.