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Texas Blackout: Experts forecast cascading financial failures
'I fear the dominos are starting to fall and we are going to see billions if not tens of billions of dollars in losses and bankruptcies because of the fatally-flawed Texas electric market that was set up by the Texas legislature,' said analyst Robert Bryce.
HOUSTON - Financial after-shocks from the Great Texas Winter blackout are wreaking havoc on many of those participating in the state's power market.
In the wake of the Brazos Electric Power Cooperative's bankruptcy filing, Austin-based Energy author and analyst Robert Bryce is forecasting a cascade of failures.
"I fear the dominos are starting to fall and we are going to see billions if not tens of billions of dollars in losses and bankruptcies because of the fatally flawed Texas electric market that was set up by the Texas legislature," said Bryce.
Houston-based power generation executive Don Hooper calls the post-blackout financial environment "precarious".
"We are seeing a lot of retail electric providers who suffered incredible losses based on their exposure to what is summer peaking prices," said Hooper.
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While the weather crisis has passed, Bryce predicts Texans residents will continue to suffer for months to come.
"Particularly, I think ratepayers are going to see a triple whammy. First, they are going to see higher electric costs immediately in their monthly bill because of the electricity they used during the blizzard. Second, ERCOT has made it clear that they don't have any money, any failures or defaults by any of the market participants in ERCOT will be socialized among all the ERCOT participants which means ratepayers and, in particular, residential and low-income ratepayers are going to get hit the hardest. And also ratepayers are going to pay for the grid upgrades that are going to be needed, the weatherization that wasn't done, all of the things that weren't done over the last 20 years," said Bryce.
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Power generation executive Hooper is far more hopeful, solutions will be found to cushion Texas consumers.
As for hardening the grid against the next polar vortex, Hooper believes the solution will not be found in renewables, like wind or solar.
"The real issue is how are we going to provide power in really cold events in the middle of winter without a winter fleet of quickstart, natural gas power plants?" said Hooper
Hooper says Texans should also know that many of the natural gas-powered generators which didn't respond in the severe cold were never designed or mandated to provide power outside of our state's hottest months.
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