Tonight: A deep freeze sends Texas electricity prices soaring 10,000%; Citibank can’t fix a $500 million oopsie; and vegan KitKats are now a thing. Let’s get into it.
Electricity prices spiked more than 10,000% when the winter storm hit this week. There are blackouts across the state. More than 4 million Texans were without power early Tuesday.
It’s striking that these power outages are happening in mighty Texas, the energy powerhouse of America. A bit of context:
- Texas produces more electricity than any other US state — generating almost twice as much as Florida, the next-closest, according to federal statistics.
- Texas is the No. 1 state in both crude oil and natural gas.
- Wind power is also booming in Texas, which produced about 28% of all the US wind-powered electricity in 2019.
So how did such a powerhouse get knocked so thoroughly offline?
We may not know the full definitive reason for a while, but a few things are clear:
- Obviously, Texas winters ain’t usually this cold. The state’s infrastructure is simply not prepared for a deep freeze.
- Critics of renewables will try to blame wind turbines, but experts note that wind makes up a small share of Texas’ energy consumption.
- It’s also worth poinitng out that a lot of chillier places have wind turbines that don’t buckle in the cold — hello, Iowa; hej hej, Denmark — they just need to be winterized, a step experts said Texas has skipped.
- The Lone Star State is … all alone. Texas made a conscious decision to isolate its energy grid from the rest of the country. That means that when things are running smoothly, it can’t export excess power to neighboring states. And in the current crisis, it can’t import power either.
In other words: “When it comes to electricity, what happens in Texas stays in Texas,” said Dan Cohan, associate professor of environmental engineering at Rice University. “That has really come back to bite us.”
QUOTE OF THE DAY
To believe that Citibank, one of the most sophisticated financial institutions in the world, had made a mistake that had never happened before, to the tune of nearly $1 billion — would have been borderline irrational.
— US District Court Judge Jesse Furman
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