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Actions to Get Reliability and Resilience in Balance

Geoff Roberts Chair, Beyond Storms Infrastructure Network Resilience Task Committee

View & download the full report at www.TexASCE.org/beyond-storms

In the early morning hours of February 15, 2021, most Texans were sleeping soundly, resigned to the reality of the extreme winter weather from Winter Storms Uri and Viola were battering every corner of Texas, but comforted in the belief that the electric system was reliable with service available at the flick of a switch. In reality, reliability and resilience were not in balance, it was teetering on the edge. A series of problems overwhelmed the fragile balance and turmoil cascaded through every sector of the essential infrastructure serving Texas.

The scale of the tragedy that emerged in the storms’ aftermath included more than 200 Texans who lost their lives and substantial and lingering economic impact to the entire region that has been estimated to exceed $200 – $300 billion[i] in addition to disputes and securitizations. The economic impact of Uri and Viola was greater than the impact from either of the two most costly hurricanes[ii] in US history, Harvey ($145B) or Katrina ($161B). In comparison, in 2019 Texans spent around $37 billion on retail power during the entire year[iii]. Regardless of the metric, from public safety to economic impact, Uri and Viola deserve a comprehensive response to prevent recurrence. Starting during the peak of the storms, the members of the Texas Section of ASCE volunteered to begin work to unravel what happened and develop such a response—the ASCE Texas Beyond Storms Infrastructure Network Resilience Task Committee.

There is no effective tool to allocate specific responsibility of what impacts were directly from the weather itself, what was directly impacted by the failure of the electric system, and what were indirect impacts. However, ASCE believes that the failure of the electricity grid was directly and indirectly a material contributor to the economic harm and human tragedy experienced from the Winter Storms. This Committee also determined that the problems uncovered by the severe storm extend well beyond storm related issues. Texas has a substantial and growing electric system reliability and resilience problem.

A reliable and resilient electric system in an increasingly electrified economy is critical to the safety and economic health of all Texans. There is a view that reliability deterioration is an inevitable part of the “cost of transition” underway in the energy sector. Due to the extreme costs of reliability failure, it is reckless to believe that the energy market transition should somehow be used as justification for reliability declines and extended load shedding events. For energy transition to work effectively and be accepted, it must occur without any sacrifice to reliability and resilience. ASCE Texas Section’s urgency is driven by the conclusion that the failures that caused overwhelming human and economic suffering felt last February will increase in frequency and duration due to legacy market design shortcomings, growing infrastructure interdependence, and economic and population growth drivers, even if the frequency and severity of weather events remains unchanged.

Critical infrastructure requires large, routine capital expenditures to support expansion, maintenance, and operations to meet demand, also known as Revenue Sufficiency. Policies, regulations, and market actions that distort, constrain, or negatively impact the flow of capital to needed investment starves reliability through deferred expansions, delayed maintenance, and reduced reliability investment. This pattern of deferral and avoidance, results in a costly “run to failure” outcome followed by surprise that reliability and resilience was somehow compromised. It also answers some of the most troubling questions identified during the analysis:

  • Why did the critical fail-safe fail to perform when needed?
  • Why did most natural gas fueled electric generators rely upon some combination of interruptible gas supply and/or transportation to serve winter peak demand?
  • Why did the gas industry experience wide-spread production declines?

To understand the root cause of the Winter Storm Uri and Viola and Viola problems, it was necessary to look beyond (1) the physical infrastructure and include (2) the impact of regulations that apply to the use of the infrastructure, and (3) the markets themselves. The energy infrastructure system works or fails by how well these three legs of the energy market work together. In analyzing this “Energy Market Stool,” ASCE identified two related problems: 1) a failure to support reliable dispatchable power generation and 2) the negative impact from sources of intermittent subsidized electric power generation. This assessment concludes that:

  • revenue insufficiency from ERCOT’s energy-only market model, influenced by federal and state subsidization of intermittent resources, fails to adequately pay for reliable dispatchable generation, and
  • these market model deficiencies are the leading contributor to making the ERCOT system less reliable.

The next most consequential contributor to reliability degradation is the relentless creep of interdependence between infrastructure sectors, which contributes to increasing the fragility of each system(s) and sets the stage for cascading failures across sectors. Interdependence occurs when the reliability of one sector is mutually dependent on the reliable performance of another sector. The impacts of interdependence will continue to deteriorate reliability without action – but proactive steps can be taken. It can be mitigated, fragility improved, and reliability enhanced by implementing a series of actions that are:

  • relatively modest in scale,
  • focus on enhancing reliability of ERCOT, and
  • mitigate the interdependence risk between infrastructure sectors.

The two remaining key contributors to reliability degradation work in more subtle ways. These two contributors include rules, policies, and regulations that create negative impacts to reliability instead of enhancing them, resulting in a legacy ERCOT philosophy and culture that has prioritized low cost to the detriment of reliability.

Determining the costs to rectify these problems is a very complex issue. However, a simplified, approach[iv] considered an existing capacity-based power market structure that explicitly pays for reliability for an indicative answer, expects < 5% increase to prices in ERCOT. This relatively modest level of notional investment for the benefits of improved reliability and resilience compared to the recent cost of failing to prioritize reliability is overwhelming.

There are five (5) Network Recommendations for focused improvements:

  1. Invest in black start generation to ensure reliable and fail-safe dispatchable back-up power.
  2. Restructure regulatory flaws negatively impacting dispatchable generation reliability.
  3. Mitigate growing interdependency between infrastructure sectors.
  4. Prioritize reliability focused regulations and incentives and eliminate regulations that include the unintended consequences of creating negative impacts to reliability.
  5. Replace process and model bias and failures and the narrow pursuit of short-term price reductions with a reliability and resilience driven culture and prioritization at ERCOT.

These 5 recommendations along with a summary of recommendations for the water and wastewater, telecommunications, transportation, electricity, and energy sectors are included in the Executive Summary and a full report now available for download on at www.TexASCE.org/beyond-storms.

[i] The Perryman Group (2021), Preliminary Estimate of Economic Costs of the February 2021 Texas Winter Storm, February 2021. (low case = $197.2B, High case= $295.8B)

[ii] The Perryman Group (2017), Preliminary Estimate of Economic Costs of Hurricane Harvey, August 31, 2017 ($145B). and NOAA.gov Office of Coastal Management, Fast Facts – Hurricane Costs

[iii] US Department of Energy, Energy Information Administration: https://www.eia.gov/electricity/state/

[iv] T Popik and R Humphrys (2021). The 2021 Texas Blackouts: Causes, Consequences, and Cures. Paper and presentation The Journal of Critical Infrastructure Policy, spring/summer 2021

Actions to Get Reliability and Resilience in Balance

February 10, 2021

Grades across 12 categories range from a “B+” for energy to a “D” for levees and wastewater

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The Texas Section of the American Society of Civil Engineers (ASCE) today released the 2021 Texas Infrastructure Report Card. Texas civil engineers gave 12 categories of infrastructure an overall grade of a ‘C,’ meaning the state’s infrastructure is in mediocre condition. This is an improvement from the ‘C-‘ the state received in its 2017 report.

As the 9th largest economy in the word, Texas infrastructure is crucial to the economy. Energy infrastructure systems have received significant attention, with Texas emerging as a leader in renewable energy production, meeting demands as the population continues to grow. Conversely, the wastewater and levee networks need additional support as the population grows and to withstand increased severe weather events. Civil engineers graded aviation (B-), bridges (B-), dams (D+), drinking water (C-), energy (B+), flood risk mitigation (C-), levees (D), public parks & recreation (C-), highways & roads (D+), solid waste (B), transit (B-) and wastewater (D).

“The ASCE Texas Infrastructure Report Card is a critical tool as we assess our needs and measure progress in actively building Texas into a better place to live, work, and raise a family,” said Representative Dennis Paul PE. “We must continue to work together with all levels of government, community leaders, industry partners, and universities, using this invaluable resource to help keep us better informed about the issues facing Texas.”

Energy infrastructure received the highest grade of a ‘B+,’ with advancements in oil and gas infrastructure helping maintain the state’s stellar reputation as a leading energy producer and provider. The equivalent of the ninth-largest economy in the world, Texas leads the U.S. in oil and gas energy production at more than a fifth of nationally produced energy. The state has experienced dramatic growth of oil production in recent years, from 1 million barrels per day in 2011 to over 5.4 million barrels per day in 2019. Texas is also the leading wind power generator in the nation.

There were several notable successes among the transportation sector as well. The Lone Star State has done well to accommodate significant population growth through meaningful attention to its aviation (B-), bridges (B-) and transit (B-) sectors. Texas is a critical aviation hub for the nation’s domestic and international passenger travel and air freight—boarding 90 million passengers and moving 5.8 million tons of cargo in 2019 alone. Providing 1.1 million jobs and contributing $41.8 billion to local payrolls, the aviation industry delivers an overall economic impact of $130 billion to the state’s economy. On the ground, Texas maintains the largest bridge inventory in the nation at nearly 57,000 bridge structures with an astounding 737 million vehicle crossings a day. Despite significant usage, Texas’ network boasts the smallest percentage (1.3%) of structurally deficient bridges in the nation. In 2018, TxDOT classified 82% of bridges as “good” condition or better, and zero crashes occurred due to poor bridge conditions. Public transportation continues to experience significant innovations, including Austin Cap Metro’s recently approved $7 billion program known as Project Connect, which will add Light Rail and Bus Rapid Transit.

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Mark K. Boyd PhD, PE, DWRE, reveals grades from the 2021 report

“In this Report Card, our Committee of strong civil engineers and leaders, has succeeded in describing the current condition of our infrastructure and predicted funding needs,” Mark K. Boyd PhD, PE, DWRE, M.ASCE, Chair, ASCE Texas Section Infrastructure Report Card Committee. “Throughout the process, we as civil engineers, reminded ourselves of the organization’s mission and how our efforts support it: To build a better quality of life across the street and around the world—leveraging smart infrastructure maintenance and design.”

Wastewater and levees received the lowest grades in the report, each earning a ‘D.’ Unlike the state’s drinking water infrastructure, Texas wastewater infrastructure is in steady decline, facing a funding shortfall of more than $200 million. The number of sanitary sewer overflows has more than doubled in the last 4 years, increasing from 2,500 to almost 6,000.

Levees and dams are each hindered by a lack of condition data and insufficient resources to ensure these structures are able to protect local communities and residents. More than 1 million Texans and $127 billion dollars’ worth of property are protected by systems of levees—manmade structures that provide hurricane, storm, and flood protection. Texas has yet to establish a state levee program to begin building a clearer picture of the 327 levee systems extending a combined 567 miles – more than 75% of Texas levee systems have not received a screened risk classification.

A noteworthy grade improvement, flood risk mitigation received a ‘C-,’ marking a grade jump from the steady improvement over the previous four report cards (‘D-‘ in 2004 and 2008 and ‘D’ in 2012 and 2017). Texas has had the most weather-related deaths in the U.S. over the last five years. Since Hurricane Harvey, the state legislature has secured resources for flood mitigation and preparing systems for the omnipresent threat of severe weather impacts.

The report also includes calls to action to raise the grades, such as:

  • LEAD WITH VISION. Leaders from all levels public and private must come together to ensure investments are spent wisely and mechanisms in place for maintenance, rehabilitation, and inspections.
  • EDUCATE THE PUBLIC. Promote public education and improve stakeholder involvement with all planned infrastructure projects.
  • PREPARE FOR THE FUTURE. Utilizing material reuse, higher standards, and emerging technologies ensures Texas infrastructure is resilient and sustainable.

The Report Card was created as a public service to citizens and policymakers to inform them of the infrastructure needs in their state. Civil engineers used their expertise and school report card-style letter grades to condense complicated data into an easy-to-understand analysis of Texas’ infrastructure network. ASCE State and Regional Infrastructure Report Cards are modeled after the national Infrastructure Report Card, which gave America’s infrastructure an overall grade of ‘D+’ in 2017.  

To view a summary of the report card and all 12 categories, visit www.infrastructurereportcard.org/texas.  

For more information on the ASCE Texas Section, visit www.TexASCE.org and follow us on Twitter, @TEXASCEtweets.

Contacts: Jenni Peters (512) 910-2272  |  [email protected] or Kevin Longley (202) 701-8768  |  [email protected]