Texas Blackout Crisis Reveals Flaws in For-Profit Utility System
By Jack Kenslea
Intern, Massachusetts Jobs with Justice
In February, as millions of Americans looked on in horror, the failures of the Texas energy system left millions of people in the cold. Homes around the state, disproportionately in lower income and minority-populated areas, were forced to go without power for up to a week straight as a devastating cold front and several storms spread over large swathes of land. This disparity occurred while homes in cities and wealthy suburban areas suffered no power loss at all, despite official announcements of only “rolling blackouts” that would be spread equally to minimize their impact. In New England, stories of Southerners’ struggles with wintry weather often provoke scoffs or chuckles, considering what we have to deal with on a regular basis. But we also live in an area with significant resources devoted to dealing with snow and ice, and insulated homes that keep us warm when we need to hunker down. Due to the infrequent nature of such conditions, such precautions are not always taken in southern states. Nevertheless, there are certain preparations that most of these states are ready to make to deal with it, deciding that it is ultimately better to have something and not need it than to need it and not have it.
Texas, as we have seen, is not one of those states. Over the past decade, officials at the Electric Reliability Council of Texas (ERCOT-yes, that’s really what it’s called) have been warned continuously about the need to invest in protective measures, sparked by a similar cold front that caused blackouts in February 2011. ERCOT controls ninety percent of Texas’ grid, which is able to avoid direct regulation because its territory does not cross any state boundaries. While the rest of the contiguous United States are split into two regional grids that must comply with federal regulations, ERCOT answers only to the Public Utility Commission of Texas (PUC). In 1999, then-governor George W. Bush signed a law which further deregulated the industry, and built off of several other weakening laws in the prior decades. Because of these factors, there was no mechanism to mandate the protective measures and very little was done to protect the grid. The results this winter were not only catastrophic, but predictably deviated along preexisting class and racial inequalities. In wealthy areas where the power stayed on, many had already been working remotely throughout the pandemic and are certainly in more stable financial positions. Meanwhile in lower income communities a week stuck at home without power means a week without wages, and people falling further behind on outstanding debts that have accrued over the course of the pandemic. Furthermore, Black and Hispanic Texans are more likely to live in older homes with structural problems and deteriorating insulation, which leads to higher energy rates when it’s on and worse heat retention when the power does go out; they are also more likely to live in food deserts which makes replacing all the food rotting in their fridge more of an ordeal.
The travesty in Texas represents the vulnerabilities that come with private control of basic needs. While Governor Greg Abbott has made a point of likening these failures to what the Green New Deal could look like, less than 20 percent of Texas’ energy supply comes from renewable energy, and windmills and solar panels can easily be weatherized to prevent freezing. Rather, it was the decision to give control of the state electric grid to a consortium of private companies interested only in their own financials that did them in. In fact, the kind of regulations advocates of the Green New Deal push for are intended to avert this kind of crisis. While the policies within that larger package do pose a significant upfront cost, the standard reasoning behind that is that the cost down the road of doing nothing in the short term will far outpace any upfront preventative costs now. The Green New Deal is all about looking for these kinds of failures and taking decisive action beforehand to make sure we don’t get caught completely unprepared later on. If the Green New Deal had really taken root in Texas, they would have reacted to those dire warnings and decided that preventing losses of power is worth the seemingly steep price tag ahead of time. It is precisely the privatized, neoliberal ethos of governing that decides to wait around until it is clearly too late to take substantive action.
What really drives home the contradictions in that line of thinking is that the initial push for deregulation did not even bring savings to everyday Texas people when it was implemented. In the years following the 1999 deregulation, Texas energy rates rose faster than any other state that deregulated and privatized their industries, even compared to neighboring states with similar reliance on natural gas. Now, as the cold has subsided and power has been restored, customers are seeing energy bills ten times the normal rate as state officials allowed prices to rise following free market supply and demand logic. As local distributors have been unable to collect on their payments, ERCOT finds itself owing over $1 billion to Texas power plants, and a federal bailout may be imminent. The businessmen who made the dangerous and irresponsible decisions that led to this clearly avoidable disaster will thus get enough funds to save their own behinds (which likely will, judging on past experience, come with very few strings attached), while the majority of their victims will have to continue on in the threat of starvation and eviction with only a stimulus check they needed months ago and potentially some expanded disaster unemployment benefits to get by on.
There is a reason we call things like electric grids, sewage systems, and telephone lines Public Utilities: they are for the public to use. In an interconnected world, there are very few people who can go about their daily lives without electricity, phones, running water, and other things we take for granted. People rely on them every day, and collectively fund their construction and repairs. While everyone relies on them, however, some are more able than others to find alternatives and protect themselves when the flow stops. When the power goes out, the impact of deteriorating homes, food deserts, unequal access to infrastructure and public transit, and unstable employment are exacerbated several times over. Decisions that affect so many people with few other options should not be left up to “market calculations” that fail to take proper steps in avoiding crises and price gouge in response to them. A desire to use public need for basic services as a cash cow creates perverse risk assessments like the one that decided weatherization was not important in Texas. The money that companies saved then probably isn't much solace to the ones going bankrupt now, and it didn’t save consumers anything at all. Paying a little more for a well regulated, truly public utility service can save you from paying a whole lot more cleaning up an unruly mess like that which has been thrust upon the people of Texas. They have been abandoned by the government they elected to serve them, and once again it is those already at the margins of society who are feeling the full force of this calamity. In order to avoid these kinds of embarrassments in the future and protect the physical and mental well-being of the people we care about, we must wrest control of our utilities away from the hands of the private companies who will gladly watch us starve to death for another zero in their bank account.
Further Reading:
https://www.nytimes.com/2021/02/21/opinion/green-new-deal-texas-blackout.html
https://www.nbcdfw.com/news/local/since-deregulation-texas-utility-rates-have-soared/2117017/
https://www.bbc.com/news/world-us-canada-56153580
https://news.yahoo.com/electrical-island-texas-dodged-federal-185750419.html
https://www.texastribune.org/2021/02/27/texas-workers-lost-wages/
https://www.texastribune.org/2021/02/19/Texas-winter-storm-suffering-inequities/