Photo credit: Jake Dean

Texas energy disaster another reminder of the need to plan for catastrophe

Article originally published in the Philadelphia Business Journal on March 8, 2021.

In mid-February, during a severe winter storm and freezing temperatures, the Texas power generation system failed, depriving electric power to over 4 million customers. It’s a lesson in what can happen when a mission-critical system is not designed to handle an extreme adverse situation, even one that has a low probability of occurrence, but can result in a catastrophic outcome. 

Texas’ coal, oil and natural gas power plants as well as wind turbines, were not designed to operate in severe cold weather conditions, unlike power plants and turbines in other parts of the U.S. and around the world.

The Electric Reliability Council of Texas (ERCOT), the organization that manages the power distribution grid in most of Texas, instituted rolling blackouts as power generation plants shut down to avoid losing the entire grid, which would have taken months to repair.

The ERCOT power grid is independent. There is a cost, however, for this independence. The power grid is not interconnected to the power grids outside Texas, so when it lost power supplied by the state’s power plants, it could not call on outside power grids as back up. 

Why did this happen? Texas operates an energy market unencumbered by regulation, as a path to low-cost electric power. However, according to a study by The Wall Street Journal, since 2004, customers paid $28 billion more for electric power due to deregulation.

Electric power is the backbone of modern civilization. Due to the system’s failure, there was insufficient power to keep pipelines operating to deliver natural gas from the wellhead to power plants during and after the winter storm. 

Homes had no electricity, leaving them without heat. There were people who tried to keep warm in their cars, and tragically some died of carbon monoxide poisoning. Others froze to death in their unheated homes. At least 80 people have died as a result of the storm. Food stores and pharmacies were forced to close, interrupting the ability of people to obtain the basic necessities of life – food and medicine.

Many residential electric customers were in variable rate plans with their power suppliers, purchasing power at the wholesale rate, which constantly fluctuates. With the shortage of power due to the storm, the monthly bills of customers on variable rate plans who didn’t lose power saw their bills skyrocket, being charged at one point $9,000 per megawatt-hour, resulting in monthly bills of many thousands of dollars. Those customers who permitted automatic payments of these bills saw their bank accounts drained.

The Brazos Electric Cooperative filed for bankruptcy on March 1 because of the high cost of scarce electric power it purchased from ERCOT with little to no hope of being paid by its customers. The financial and legal fallout of the power disaster is just beginning.

A winter storm in 2011 caused a less severe disruption in power supply. Had the power companies winterized their generating facilities after that storm, the blackouts caused by this storm would have been avoided. Will they now winterize their facilities? Time will tell. 

Photo credit: Jake Dean

In an interview on Fox News, Texas Gov. Scott Abbott blamed green energy  – wind and solar power – for the disaster. Abbott said, “Our wind and solar got shut down … they were collectively more than 10% of our power grid, and that thrust Texas into a situation where … [we lacked] power on a state-wide basis.” 

Abbott’s statement was not factual. He didn’t state the brutal facts of reality. That hurt his credibility.

Abbott should have acknowledged that the disaster was caused by oil and gas fired power generation plants not being winterized. He should have also acknowledged that the decision to operate the Texas power grid independently from the national power grid prevented the ability to provide backup and prevent the energy disaster.

The lessons of the Texas energy disaster for all political and business leaders are the same lessons relearned over and over again after many disasters and scandals. Always face the brutal facts of reality. When a service is mission-critical, design it to protect against a catastrophic situation. We shall see if Texas faces the brutal facts of reality moving forward so that a shutdown of the electric power system doesn’t happen again.

Stan Silverman is founder and CEO of Silverman Leadership and author of “Be Different! The Key to Business and Career Success.” He is also a speaker, advisor and widely read nationally syndicated columnist on leadership, entrepreneurship and corporate governance. He can be reached at

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