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Texas Fights Outloud

ERCOT Gets Real

ERCOT is currently rolling out its “market redesign” for our grid. It seems that even they, our unelected, bureaucratic, out-of-state energy overlords, have concluded that we cannot allow Washington D.C. to set our energy policy—we, the rate payers, literally cannot afford it. There is some indication that Pablo Vegas, ERCOT’s new CEO, is trying to atone for egregious past mistakes of reliance on renewables” in exchange for the chunk of change coming from federal government subsidies to entice our generators to bend the knee to D.C.’s global warming religion.

The result of such short sighted zealotry (frankly, greed) has been to take massive amounts of electricity offline, as renewable generators, the pigs at the government trough, could make money even with negative rates. Those who would invest in reliable, on demand generation (natural gas) had to bow out. It just wasn’t profitable.

Enter Snowmaggedon, a wakeup call if ever there was one for sleepy ERCOT. We came within a gnat’s breadth of total grid failure. It is hard for us to imagine what Texas would look like today in the wake of that narrowly avoided eventuality—perhaps like Europe will look like this winter? Many energy experts have said that we would have been in 3rd world status overnight.

Can you then imagine the hubris or stupidity (or both) of ERCOT interim CEO, Brad Jones, saying shortly thereafter that he would double and triple down on renewables? If you had a hard time this Thanksgiving finding something to be grateful for in the midst of the meltdown of Western civilization, may I suggest that Mr. Jones’ exit from ERCOT was cause for jubilation?

New CEO Vegas is touting that, The actions we’ve taken over the last year and a half have positioned us better than we have been.” That’s it? Better than we were at the brink of collapse? I must confess I was looking for something a bit more robust. When Public Utility Commission Chairman, Peter Lake, hastens to add that every year Texas adds a population roughly the size of a Corpus Christi,” I can’t help but feel my expectations are being managed, and in a downward direction.


So to get into a little of the nitty gritty of the grid, of the four scenarios they ran for high demand, only one resulted in forced blackouts. This scenario was directly tied to the failure of wind output under demand. We lack “dispatchable” power. In other words, you cannot rely on wind when it doesn’t blow, and thermal generation (dispatchable power) has been displaced by subsidies to unreliable renewables.


So ERCOT has found the religion of reality (Vegas: “we need to build dispatchable generation”), and plans to address it through market reforms. Lt. Governor Dan Patrick chimes in, saying more natural gas generation can be developed as a top priority for the 2023 Legislature.

All well and good, guys, but you’re a little late to the party. It’s going to take years to bring new thermal generation online, and it’s also going to take an iron will to keep our snouts out of the subsidy trough because D.C. is not going to let up. 

In the meantime, ERCOT proposes what they call a Forward Reliability Market.”  These are financial incentives for generators that perform during periods of high stress on the grid. I personally find this hysterical. It’s a subsidy on the back end to thermal generators to try to compensate for the subsidy on the front end to renewable generators. Anyone remotely interested in free markets realizes that this bears zero resemblance to such. It is, rather, a refraction of multiple layers of distortion in the energy market brought to you by bureaucrats and politicians without even a passing interest in the fundamental market economics of energy.

While Texan’s energy bills are set to at least double in the New Year, due to skyrocketing energy costs across the globe, in tandem with ratepayers absorbing the economic fallout from the colossal grid mismanagement that lead to Snowmeggedon, we have this errant nonsense issuing from one Democratic State Senator, Sarah Eckhardt, who hails from, wait for it, Austin.  Her Senate Bill 254 would double the state gas tax from 20 cents per gallon to 40 cents per gallon. This is a local version of the Biden administration’s openly declared war on oil and gas, meant to bolster the use of electric vehicles and dissuade petrol users at the pump.

But we’re in Texas, for God’s sake. We love our oil and gas, as well we should.

Let’s put this in perspective. Texas Railroad Commissioner Chair Wayne Christian toted up the figure that the oil and gas industry contributed to the coffers of State funds last year—nearly 7.5 billion dollars.

As he said, "Revenue from the oil and gas industry is what’s in the Rainy Day Fund and it accounts for billions that go to the State Highway Fund. It also contributes to state funds that pay for schools, universities, and first responders.”

This is The Texas Energy Miracle, and only the Democrats would want to kill the goose that lays that golden egg. But of course, nowhere in Eckhardt’s policy priorities (Covid-19, public education, climate change, and racism in law enforcement) are figured affordable energy, job creation, a reliable grid or a robust economy.


Instead, the Dems would have us pay more at the pump and more in our homes during a time of record breaking inflation, to continue at our expense their assault on our homegrown Miracle. So Lt. Dan Patrick’s legislative priority to “level the financial playing field between renewable and thermal sources of electricity generation” is a welcome guiding light to the Lege in the upcoming session, late in the game as it is. The truth is, you can have The New Green Religion, or you can have reality. Either or. Pick one.




This week we are asking our House Representatives to put forward a proposal to use a portion of our flush revenue surplus to grant relief to Texas ratepayers.  The residents of this great state should not have to pay for the mistakes made by unelected bureaucrats who made a hash of our grid through failed policy. The resulting looming burden of doubling electricity rates is particularly onerous in tandem with historically high inflation rates nationwide.


We find this outcome completely unacceptable; and it is, fortunately, within the power of the Austin purse strings to apply some of our robust Rainy Day Fund to amend this grievous fault.


We call on our duly elected officials in Austin to do just that.


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