Milton Ezrati Weakening Electric Grid

The nation’s electric grid has become less reliable, more fragile s more and more irritated customers become certain that power shortages and blackouts have become more common, the electric grid’s problems receive more attention. They should. Shortages and blackouts have in fact become much more common than they once were. The electric power grid has become increasingly fragile and considerably less reliable. This is especially troubling because, at the same time, Washington and several states plan to burden it further with electric cars and an increase in the use of electric appliances. In part, the power problem reflects the increased reliance on inherently intermittent wind and solar sources. But this straightforward fact of life is only part of the story behind the electric grid’s problems. Matters are much more complicated.

Evidence of failure is irrefutable and has sometimes appeared with great drama. A 2021 cold snap in Texas, for example, led to widespread blackouts and the deaths of 250 people. California has for years regularly imposed rolling brownouts and blackouts on utility customers. Just this past Christmas season, unusually cold weather across the country prompted utilities from Massachusetts and New York across the Midwest and into the South to beg their customers to turn down their thermostats and delay their use of appliances. Millions lost power for days in North Carolina and Tennessee. Downed power lines caused some of the problems, but in many cases, electric utilities simply had to cut off power to some in order to avoid a total crash of their systems. The incidence of prolonged blackouts has doubled since 2013.

The green lobby, predictably, blames the problem on how climate change has created more severe weather. The fossil fuel industry and its allies in Congress, equally predictably, blame the problem on the unreliability of wind and solar. No doubt there’s truth on both sides, although many of these points are debatable. However, one point isn’t: The wind doesn’t always blow, and the sun doesn’t always shine. Even in the face of this reality, these problems would seem to be something engineers could find solutions to and investors could then implement. But there’s a complication, because most of the country uses regional transmission organizations (RTOs) to buy and sell power. blows and the sun shines, wind and solar charge the lowest prices, not least because the federal government and several state governments subsidize their operations. During those times, wind and solar crowd other fuel sources—fossil fuel and nuclear—out of the competition. But when the wind isn’t so strong and cloud cover obscures the sun’s rays, the RTOs look to other fuels. That sudden rise in demand necessitates a quick scaling up by fossil fuel and nuclear providers. But fossil fuel and nuclear produce are best and at the best price when they supply on a steady basis. Scaling up is difficult and can’t always happen as quickly as demands change. What’s more, the on-again-off-again nature of demand puts an added strain on generating and transmission infrastructure.

RTOs are a relatively new entrant in Americans’ electric power equation. Before they were authorized by the Federal Energy Regulatory Commission in 1999, huge regional utilities managed the nation’s electric grid. Regulated monopolies owned all the parts of the process— from the generating equipment to the fuels used to power them to the transmission lines and the wires that led into customers’ homes. Regulators controlled pricing to allow these firms enough surplus to maintain and upgrade facilities and return a reasonable profit to their shareholders. RTOs changed things radically.

Now, for most of the country, these regional bodies buy power from anywhere they can get it at the lowest price they can get. When the wind

During the past 20-something years during which these arrangements have been in place, a lot of fossil fuel and nuclear has closed, not because of green preferences but because they simply could no longer operate profitably. The electric grid’s infrastructure has deteriorated under the on-again-off-again strains and because providers lack the surplus to upgrade their equipment. At the same time, the reliance on natural gas has grown, because it has become more plentiful and seems able to respond more flexibly to variations in demand than can other fuels. It’s hardly surprising, then, that natural gas use has risen in tandem with wind and solar preferences.

The upshot is an increasingly inadequate electric power grid, one that’s less flexible, less resilient, and more prone to breakdowns than it once was. Worse yet, the political class in Washington and some states seems to have little interest in the problem, even as it makes plans to place still more burdens on this weakening grid.

ANDREW MORAN has been writing about business, economics, and finance for more than a decade. He is the author of “The War on Cash.”