Tuesday, March 30, 2021

Postmortems on the Texas electricity market failure

 The weather related failures of the Texas electricity market have prompted a number of fairly rapid postmortems (if that's the right word for a market that has since been restored to working order for normal circumstances).

Perhaps the most authoritative of these is by Peter Cramton, the veteran market designer who was vice chair and an independent director of the Electrical Reliability Council of Texas (ERCOT) board before resigning on February 24, 2021, at the request of Governor Abbott, along with the other non-Texan directors. 

Last Monday he posted a paper with his views on what happened and what improvements deserve consideration. A summary of the paper appeared in Utility Dive on Tuesday. The long piece covers more ground; the short article hits the highlights.


Here's  a Q&A at the Yale School of Management, which goes intro some of the history of the market:

Why the Texas Power Market Failed, Q&A with Ed Hirs 


Here's an op-ed from the Dallas Morning News, asking why the emergency prices weren't ended as soon as adequate supply was restored:

Why didn’t ERCOT put a stop to the massive electricity price spikes during the outages? Rather than allow power markets to return to normal, regulators kept prices at emergency level.  By Rob Snyder


And these two posts, with different perspectives by different commentators, the first by a sociologist and the second by a geographer and a political scientist, appear on the University of Chicago's Stigler Center blog Promarket:

The Texas Blackouts and the Problems of Electricity Market Design  BY GEORG RILINGER, March 24, 2021


The Texas Power Failure: How One Market Model Discovered Its Natural Limits  BY EVE VOGEL, STEVEN K. VOGEL March 25, 2021

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