We Got the Power - With New Reliability Rules, Is Texas Ready for an Extreme Uri-Like Winter?

The energy landscape in Texas has undergone significant changes in the two years since the calamitous events of Winter Storm Uri in February 2021. The extreme weather wreaked havoc on the state’s electric generation and natural gas systems, and subsequent investigations resulted in two reform bills — Senate Bill 2 and Senate Bill 3 — aimed at installing new leadership at the Electric Reliability Council of Texas (ERCOT), the electric grid operator, and requiring state regulators to develop rules and standards to address the points of failure in electricity and natural gas infrastructure and operations. Since the bills were signed into law in June 2021, oil-and-gas, electric-grid and utility monitors have adopted a number of requirements, some more prescriptive than others. In today’s RBN blog, we highlight what has changed and where there are still potential gaps.

This blog is based on extensive discussions at the Texas Energy Symposium a couple of weeks ago about emergency preparedness and winter reliability in the Lone Star State. The Symposium — which was hosted by the Energy Bar Association and the University of Texas Law School, partly sponsored by RBN, and organized by Rick Smead, head of our Advisory Services Group — brought together industry and regulatory experts to provide clarity on where things stand. Given Texas’s role in power markets, as a leading producer of natural gas, a key player in the global gas market as an exporter of LNG, and a huge source of wind and solar power, the changes being made will have impacts far beyond the state’s borders.

As freezing weather descends on Texas this week, no doubt many Texans can’t help but flash back to Uri’s devastating impact. Reams of reports and articles have been written in the past couple of years to unravel the confluence of factors that led to just about every domino in the electricity and natural gas delivery mechanisms falling, or at least teetering on the brink of collapse. So, we’ll refrain from yet another blow-by-blow. However, it’s important to remember that it wasn’t just one thing that triggered the event but that many elements of Texas’s extensive gas and electric infrastructure failed to perform — a Perfect Storm of factors, as we described it in a blog written just as the worst of the storm was behind us and Texas was starting to thaw.

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