To The Nation's Utility Companies: Quo Vadis?

A reader sent this very interesting article from The New York Times. I like it for several reasons; as usual, all these articles have multiple story lines. The story focuses on a proposed way to manage utilities going forward ... at great cost to the consumer. The article puts the blame on the glut of natural gas, but in fact, the problem first surfaced in Europe, precipitated not by a glut of natural gas, but a glut of central government planning leading to wind and solar energy projects that a) were not viable financially; and, b) destroyed the ability of conventional utilities to cover their own costs.

The New York Times reports:

The “polar vortex” that swept across much of the nation early this month knocked two North Texas power plants offline just as residents began turning up the heat and revving up power use. Grid operators fixed the problem, but not before warning consumers that they were a step away from resorting to shutdowns.

With that, the weather added fuel to a debate about the state’s electricity market and the demands of its soaring population.

“With low temperatures earlier this week, we narrowly escaped rolling blackouts,” a group of electric utilities warned in a full-page advertisement in the Austin American-Statesman just days afterward. “We won’t be so lucky in the years ahead if we don’t take action now.”

As utility companies and big energy users like manufacturers spar in Austin over how best to encourage the building of new power plants, another important question is getting less public attention: How can Texas curb its energy use?

Utilities are pressing regulators to shift the state’s “energy only” market to a “capacity” model, which would pay power plants to maintain reserves and be ready to meet demand peaks — a multibillion-dollar proposition. The utilities say that low natural gas prices have eroded the economic incentive to build plants.

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