RenÃ©e Cross, Mark P. Jones, Pablo M. Pinto, Kirk P. Watson
Winter Storm Uri began to hit parts of Texas on February 13, 2021 and, at its peak, left nearly 4.5 million homes and businesses without power. The preliminary death toll attributed to the storm stands at 111 and the storm’s economic toll is estimated at $ 295 billion. During the week of February 14-20, more than two-thirds of Texans lost power, for an average of 42 hours, and mainly due to power outages, half lost running water for a average of 52 hours, with even more Texans with water not having access to potable water for almost two days on average.
A little over a month later, on March 25, Warren Buffett’s Berkshire Hathaway
The Texas power grid is located entirely within the Texas limits; therefore, it is not subject to regulation by the Federal Electric Regulatory Commission. Two counties in Texas are part of the Western Interconnection power grid while 29 are part of the Eastern Interconnection grid. The lack of federal oversight allowed Texas policymakers to design an electricity system based on market-based incentives that would promote innovation, competition, and lower prices for consumers. The system appears to have produced positive results in these dimensions, but recurring extreme weather events, such as winter storm Uri, have revealed a flaw: the system is not resilient to sudden spikes in demand and declines in demand. supply of electrical energy caused by the fall. in temperature, leading to massive power outages and loss of life and material.
The central problem facing Texas is to identify solutions that would make the system more resilient. Yet building a resilient power system has the typical properties of a public good, which is likely to be under-supplied by the market. A proposal like Berkshire Hathaway’s, which relies on building excess reserve capacity, requires government action. The snag for Texas policymakers is that despite the widespread recognition of the costs of power outages and the demand for corrective action to mitigate the impact of severe weather events, a majority of Texans do not appear willing to pay additional charges to producers. for the necessary investment in a more resilient electrical infrastructure. Maybe these Texans don’t believe it’s them, after being left shivering in their homes, paying an extra price for an investment generators can make to ensure a more resilient electrical infrastructure.
From March 9 to 19, the Hobby School of Public Affairs at the University of Houston conducted a investigation 1,500 adults living in the 213 counties of Texas (containing 92% of the state’s 29 million people) served by the Texas electricity grid, which is managed by the Electric Reliability Council of Texas (ERCOT).
Survey respondents were asked how much they would support a proposal to allow power producers to charge consumers additional fees to support maintaining a more substantial minimum power reserve in order to protect electricity. State of Texas against the effects of inclement weather. affecting its energy supply and delivery. More than half (54%) of respondents oppose producers being able to charge these fees, with 36% strongly opposed and 18% somewhat opposed. Conversely, less than one in four (24%) supports this fee proposal, 8% strongly and 16% somewhat. The remaining 22% neither support nor oppose the royalty proposal aimed at strengthening the state’s reserve generating capacity.
This opposition is very bipartisan, with 57% of Republicans, 50% of Democrats and 58% of Independents all opposing the proposal to allow a company like Berkshire Hathaway to charge consumers a fee to support the creation of a greater reserve power generation capacity in Texas. .
These same Texans were also asked how much more they would be willing to pay on their monthly electric bill to protect the Texas power grid from the effects of winter weather by increasing standby generating capacity and ensuring that power plants were completely wintered. Half (51%) said they would no longer be willing to pay more at all on their monthly bill to meet these goals. The second most common option chosen was $ 5 more, which a quarter (25%) of Texans said they would be willing to pay each month, followed by 14% who said they would be willing to pay 10. $ more per month, with the remaining 10% spread. among those who would be willing to pay $ 20 more (6%), $ 30 more (3%), $ 40 more (0%) and $ 50 more (1%).
Obviously, calculating the decisions of state legislators is much more complex when considering a proposal of this magnitude. other than public opinion. And lawmakers are also facing demands from the public to fix the power grid issues that winter storm Uri has highlighted. That said, the Texan public polled in that poll made it fairly clear that they oppose policies that would require consumers to shoulder much of the burden of increasing standby power generation capacity in order to to avoid another winter power outage of the Texans scale during Valentine’s Day. week of 2021.
Renee D. Cross is the Senior Director of the Hobby School of Public Affairs at the University of Houston. RenÃ©e worked as a district manager in a state representative’s office for two years before joining the staff at the Center for Public Policy at the University of Houston as a researcher. Now at the Hobby School of Public Affairs for 21 years (the Center for Public Policy is one of the many entities housed within the Hobby School since 2016), RenÃ©e is the Senior Director of the School. His academic interests include government, politics, and the history of Houston and Texas; urban policy; and civic engagement and voting. In addition to being the course instructor for the school’s internship programs, RenÃ©e teaches graduate level political science courses such as Texas politics, city politics, government and state politics and premises, campaign politics and participation and democracy in American politics at the University of Houston and the University of Houston-Downtown.
Mark P. Jones, Ph.D., is a political science researcher at the Baker Institute, Joseph D. Jamail Chair in Latin American Studies, and Professor in the Department of Political Science at Rice University.
Pablo M. Pinto is Associate Professor and Director of the Center for Public Policy at the Hobby School of Public Affairs at the University of Houston, and co-editor of the journal Economics & Politics. Pinto is a UH Energy Faculty Fellow, a Non-Resident Researcher in the Baker Institute Latin America Initiative at Rice University, and an Associate Researcher at the Saltzman Institute of War and Peace Studies at Columbia University. . Pinto’s areas of expertise are international and comparative political economy, comparative politics and quantitative methods. Pinto holds an MA from Aoyama Gakuin University in Japan and a PhD. in Political Science and International Affairs from the University of California at San Diego. He obtained a law degree from the Universidad Nacional de La Plata, Argentina. Prior to joining the University of Houston in 2014, Pinto was a faculty member at Columbia University. He taught at the Escuela Nacional de Gobierno in his native Argentina, and at the Universidad Nacional de La Plata, where he founded and headed the Department of Asia-Pacific Studies. He also worked as Chief Counsel at Toyota Argentina.
Kirk P. watson is the founding dean of the Hobby School of Public Affairs at the University of Houston and began his position on May 1, 2020. Watson’s political background spans local and state government. As a senator, he championed education, health care, transportation and open government. During his tenure in the Senate, he was a member and vice-chair of several standing and special committees. Most recently, he served as Deputy Chairman of the Senate Nominations Committee and also served on committees overseeing state finance, education, higher education, and the Sunset Advisory Commission. His peers elected him Pro Tempore President of the Senate in 2019.
Senator Watson graduated from Baylor University and received his first degree in his law class at Baylor Law School. He was named Baylor Outstanding Young Alumnus, Baylor Young Lawyer of the Year and Outstanding Young Lawyer from Texas. Most recently, he was legal counsel to the law firm Husch Blackwell LLP.
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