Texas’ electric grid is being overwhelmed by unreliable and unaffordable electricity from wind and solar farms. On this week’s Liberty Cafe, I talk with energy expert Robert Bryce about how Texas can get out of the mess our politicians have gotten us into.
Bill Peacock 0:17
Not only are Texans facing uncertainty about the reliability of our electric grid, we’re also facing much higher costs for the electricity that we buy. In fact, according to a new report, Texas could be on the hook for an additional $10.5 billion
in in costs related to winter storm Yuri, we’re going to talk about all that and more on with the author of that report, Robert Bryce, on this week’s episode of the Liberty cafe.
Hi, my name is Bill peacock. And thank you for coming and joining us on The Liberty cafe. It’s always a blessing to have you here with us. And it’s also a blessing to be here because we’re sponsored by Texas scorecard. It’s a great group of men and women over there fighting for liberty at your local government level, at the state level, and really just across the nation. And so please go over to Texas scorecard.com and see what you can do to join the fight for liberty here in Texas.
So we’ve all went through here most of us in Texas went through winter storm Yuri, it was a unprecedented event in Texas history and really United States history. I haven’t gone through and looked at all the blackouts in the history of the United States. But I’ve looked at some of them. And really, frankly, I can’t find any that are as bad in their totality as the blackouts we faced here in in Texas during winter storm Yuri, certainly the geographic area was probably larger than anything we’ve ever seen, which in part has something to do with Texas being a very large state. But nonetheless, it was really bad. And there’s a lot of reasons why people think we went through that, and we’ll talk about some of those on our show today. But why ever that happened and whatever happened, it costs a lot of money. And even why it costs so much money is subject to a lot of debate. But what’s not up for debate is that Texans are going to be paying the bill for that for a very long time. We have with us today, Robert Bryce, who’s written a recent couple of articles on this topic, and and has dug through all the information so that you and I don’t have to and come up with a number that he suggests that we’re going to be facing $10.5 billion in costs when it comes to winter storm Yury Texas consumers, Texas electricity, consumers and natural gas consumers if I read his work correctly, you’re going to be facing those kinds of bills, and we’re gonna be paying out for a long time. So I’m really blessed to have Robert Bryce with us today. Let me just give a little bit of background on him. He’s an expert on energy. And he has written a lot about that he’s an author. He’s a journalist, and he’s a public speaker. And he goes about talking about this issue, which is so complex, but yet so central to the wealth and prosperity that we have in their lives. And so it’s really valuable to have somebody like Robert, who is breaking down all this information, so that we can better understand how to maintain our wealth and prosperity by having a reliable, affordable electric grid. Among other things. He’s the author of a book a question of power, electricity, and the nation’s, and the Wealth of Nations. And you can find that book, and a lot more about Robert and his website, Robert bryce.com. So Robert, welcome to the Liberty cafe.
Robert Bryce 3:42
Thanks a lot. Happy to be with you, Bill.
Bill Peacock 3:47
I’ve been on your I guess you have not a podcast, but you have a video podcast. And I was on that a while back and was was pleased to be there. And so I’m glad that we can have you on on here. But although we’re
Robert Bryce 3:58
Glad to be back and Yeah, happy to dive in. I was just before we started, we were talking about this what you pointed out the 10 point 5 billion, and I’m still working through it. Yes. You pointed out I’ve gone through some of the data. I published some preliminary data in Forbes last month, August 25. I think it was and I just done my own calculations based on published data and I didn’t realize there was an inner NRG Energy and put out a report friend of mine that had pointed me to it so anyway, I wrote two pieces in two days, which is something seldom but that I’ve done in the past. But the yes, you’re right. The punch line is about 10 point 5 billion and its consumers in Texas, their consumers in Oklahoma and in Kansas are also facing increased utility costs that will last will will continue for decades in the future because of the damage caused by winter storm Yuri and the unpreparedness of the individual utilities both in power and gas for what happened and the behind the on the enormous costs that they incurred because of the storm. So yes, in Texas alone, it’s 10 and a half billion dollars, but you have Bill means more, I think what is it 2.8 billion in Oklahoma and Iowa, Missouri, other states are having somewhat similar but nothing on the order of magnitude, the orders of magnitude we’re seeing here in Texas overall.
Bill Peacock 5:12
Well, we all recognize the unprecedented just nature and magnitude of that storm. I’ve lived in Texas, all my life and never seen anything like that. It was obviously kind of a 100, or maybe one or 200 year storm, that kind of thing.
Robert Bryce 5:29
Except we happen next year, it could happen in three months. Right? Well, right. Yeah. It’s not that it can’t happen again.
Bill Peacock 5:35
Yeah, exactly. But but so that was part of it. And there were reasons that, you know, we weren’t prepared for it, obviously, for whatever reason, but why did it cost me why did the cost get up to $10.5 billion, this electricity, really that expensive that digit over a period of one week or so that we would incur that higher cost?
Robert Bryce 5:59
Right? Well, remember, it’s not just electricity. And in the Forbes article that I published on this, it was out August 26. I’m just looking at it. It’s called update in our G funded report says Texas ratepayers on hook for 10 point 5 billion due to URI. And Oklahomans face 2.8 billion in debt. It’s not just the power utility. So I’m looking at that list now. So you have oh for Atmos Energy and centerpoint, both gas utilities seeking a total of $3 billion, at most, 2 billion and centerpoint. 1 billion, because they had hedged some of their their their forward risk on power, but not necessarily for gas. And then they were short gas when the prices were high. And that didn’t have anything to do with their cut. But it does have something to do bill. And you know, you’ve looked into ERCOT it’s the way that the the grid in Texas has evolved to be so dependent on renewables and natural gas and the renewables went away. They weren’t available. When the grid was about to collapse, wind and solar went to Cancun with Ted Cruz, they’ve gone they weren’t here.
Bill Peacock 7:02
But as a matter of fact, it’s kind of a design, because all this happened at like, one o’clock in the morning. Yes. And it’s kind of a design feature that solar is not available at one o’clock in the morning. Right?
Robert Bryce 7:12
Exactly. So they weren’t available. And then the grid is on the verge of collapse. And there’s not enough natural gas to go around. So there’s all you know, all this, this, the the overlap of the electric grid, and the gas grid became obvious. And in the hindsight, no one’s talking about the fact that we closed six gigawatts of coal. So we made the electric grid inordinately excessively dependent on one fuel and left us vulnerable, because we didn’t have enough baseload generation that had on site fuel. So there was a basic lack overall of the understanding of the need for energy security across both the gas grid and the electric grid. And that that what we see now is the consumers, of course, they always end up paying the bill. Right. But the the key question is, how do we, you know, what’s the policy that’s going to cure this because the system is still being flooded with weather dependent renewables. And I’ll end by just saying, which makes absolutely zero sense if we’re facing more extreme weather because of climate change. We don’t want our system our most important networks to be dependent on the weather. But yet, that’s because of the way that its subsidies are distorting the capacity of the the amount of generation in Texas. That’s exactly what’s happening. So we face of the grid is becoming more and more fragile. I guess I’ll end with that point, Bill. But you and I’ve talked about this before.
Bill Peacock 8:27
Yeah. So that makes up a really good point. I mean, so we’ve got these renewables coming in. And and to the state of Texas and large part, it seems, because of these subsidies, now there’s subsidies both at the state level and the federal level, and which are part of the part of this whole problem. What What kind of I mean, what kind of magnitude are we talking about when it comes to how much investment there’s been in renewables in Texas over the last 20 years or so?
Robert Bryce 8:56
Right. So my, my figures, well, that’s actually not my data, it’s data directly from the Wind Energy Association, their own numbers put it at about 66 billion? Well, there are numbers about 60 billion total for wind, and then another six years or more than that for solar. But that’s not that’s only part of the story. And that’s the investment that was made in the years before the blackout.
Bill Peacock 9:59
13 property tax abatements. Yeah, right, which are, you know, any almost any kind of business can get those types of payments. You know, the cat in the case of chapter 313, it’s a school district said, Hey, come invest in our school district and, and we’ll cut your property taxes in half for 10 years basically as what they say. But more and more that is being used to buy renewable energy generators. And I was looking at the data for this. And there are now so this this program is going away at the end of December. And so everybody’s piling in to try and get their their cut of this this government money or actually taxpayer money by getting getting their their taxes cut. And there are about 400 projects trying to get under in under the wire 300 of those are wind or solar. And the overwhelming number of those is solar. I know when wind is seeming to take a back seat now to solar when it comes to new generation in Texas. What Why is that going on?
Robert Bryce 11:07
Well, I think it’s there’s more there has been more clarity on the investment tax credit. I also think that this is simply the evolution of the industry that it’s harder and harder to cite wind. And I think the industry is turning more to solar. And I think that in the there’s, as I said, a little more clarity in terms of the future of the EITC. Although now that has been made clear with mentioned Schumer. But nevertheless, I just I want to make sure I’m citing your numbers here, Bill because they are yours in about 66 billion was spent on solar and wind in Texas in the years before the blackouts. And they got 21 point 7 billion really 22 billion in state and federal subsidies. And those are that 21.7 Is your number from a report that you published for the for the Energy Alliance. So that’s a massive amount of subsidization. And, you know, they call it tax credits, whatever you want to do. But that’s what is driving this change in the makeup of the of the ERCOT electric grid, and there is no new thermal generation new gas generation being built in the state five gas fired large gas fired generation instead, it’s all wind and solar. And by the end of next year, wind and solar could have more capacity than all natural gas for our generation in the state.
Bill Peacock 12:17
That’s a pretty good return on investment. I’d like to get that where I you know, put in you know, $1, you know, $1,000 on something, and I get $333 back before I even worry about the market is going to pay me right
Robert Bryce 12:30
Count me in. Absolutely.
Bill Peacock 12:33
Robert Bryce 12:33
I’m opposed to subsidies bill unless I’m getting them. So yeah, go ahead. Amen. That’s all I have solar panels on the roof of my house.
Bill Peacock 12:56
It’s a pretty nice deal if you can get it. So yes, yeah. Well, let’s get back to the cost a little bit. So one of the things that I mean, again, this was a bad storm systems went down, obviously, there’s going to be cost to this. But one of the costs that drove it up to this this level of $10 billion. And that’s just I think we got to put this in context, right that that $10 billion is just the 10.5 or whatever it’s going to be ultimately it’s just the debt that we’re going to have to pay off. That doesn’t account the higher electricity bills that that we had to pay during the storm in after the storm and things like that, right
Robert Bryce 13:37
And that we’re paying now. I mean, we’ve seen dramatic increases in utility prices all across all around the state. I’m here in Austin and Austin did really frankly, just incredibly well during the storm. They made money $54 million, something Austin Energy Did you know, CPS and San Antonio lost a billion dollars, browses electric 1.8 I although it appears they’ve settled in bankruptcy for something like 1.4. But let me just run through if they don’t mind, I’ll just hit on a couple of these numbers. So ERCOT itself has requested recovery of around 2.1 billion. And then Brazza Selectric 2.1 roughly and these are directly from the NRG report. Atmos Energy 2 billion Centerpoint 1.1 billion CPS a billion and then some of the others Oh Rayburn country and Rayburn country Electric Co Op has already securitized about $908 million in debt. And they’ve said that that REIT defeating that or defeating that debt or paying it off will be take something like 27 years so a lot of these bonds that are going to be issued that are implicitly backed by the state they will be paid off over the next 30 years and it will be uneven as I said you know if you don’t do an all electric home you won’t be paying off debt that was incurred by a gas utility but some of these other things you will be in it depends on on where you are but right now reading this list I’m glad I’m a customer captive customer of a of a monopoly utility Austin Energy
Bill Peacock 14:59
It’s the whole system is really confused. We’ve got competition on the one side for most Texans when they’re buying their electricity, but but some of us are still captured by either a Muni in your case, or I used to be, but now I’m out in the hill country. And so I’ve got whatever cooperative is it is out here that
Robert Bryce 15:22
Peacock you should know your coop, you’re an owner there, come on now. One of the living remnants of the New Deal, I’m a big fan of coops. I’m a big fan of publicly owned power and electric and gas utilities.
Bill Peacock 15:37
Well, that’s good, except when you’re captured, and you can’t get it from anywhere else. But anyway, that’s it. But so there’s
Robert Bryce 17:20
Okay, so but fair enough, but but no electricity, they heard a great quote the other day, and I was talking about it with a friend, apparently from someone who worked at FERC. And I don’t know the origin. But natural gas is a commodity electricity is a phenomenon, which I truly did like because it is a phenomenon. And you know, this idea that this system is beating at 60 cycles per second, right in the electrons aren’t just bouncing back and forth. I mean, it’s truly astonishing, the whole thing, but the network is different. And I’ll anyway, we we take more than an hour if we wanted to follow that Bill. So there’s a lot.
Bill Peacock 17:51
No, I know that. Well. Here’s another thing kind of related to that, in some sense that, that the so this, this $10 billion in the cost of electricity, electricity during that one week was I mean, some people have estimated it up to be close to $30 billion or more, the actual purchased, prices of electricity was purchased during that week. $30 billion, perhaps some, some people say 16, you know, you know, lots of different numbers. I don’t think it was 30 because not all of the providers were paying the $9,000 a mega Right. Right. All right. But so But why was the price of electricity at $9,000? Because if you know if I look on my phone today, well, matter of fact, I’ve got my phone, right here. So if you’ll give me just a second, I’ll pull up my little ERCOT app, and look at it and the price of electricity. Wholesale price of electricity today in Texas, is averaging about 70 bucks per megawatt hour. Now
Robert Bryce 18:50
Significant increase, because the system is so dependent on gas now and that gas prices have gone up. And because they let the market supposedly take over we have a flood of natural gas and more natural gas dependence than we should have, then that’s right. And consumers. And so anyway, that’s an issue, because that’s a fairly high price. 70 bucks, but it’s
Bill Peacock 19:08
yeah, it’s a it’s a fairly high price. But compared to what was going on that week, it was chicken feed right 1000 Yeah, we’re getting the 9000. But when the market was collapsing, or after it had collapsed, the price of electricity was trading at about $2,000 per megawatt hour. The market had come to that. It only went to 9000 when the bureaucrats the commissioners at the Public Utility Commission looked at economic theory and said oh, well, if if the market is in failure, and we have this, this supply of electricity, we can’t meet the demand. Obviously prices should be at the market cap which is $9,000. And so they said obviously the market is not working properly, so they arbitrarily raise the price from $2,000 to $9,000 per megawatt hour
Robert Bryce 20:02
That was one of the big human blunders here in real time human blunders, right. I think there were longer term blunders in terms of how the market was set up. And you and I can differ on those issues. But all I agree with you, the fact that they enter the Public Utility Commission, and I don’t know why there’s a lot of speculation around the governor and who called who and why they did it. But the the notion to raise it to 9000, then leave it there. I mean, it could have been justified if they’d done it for a few hours. But that was the problem. They left it at 9000 for nearly what was it three days or more than three days, whatever it was. And so there was this implied huge costs, which wasn’t all that it not all of those, and I’ve made that mistake, and some of them I math, but that was a big mistake. And it was one that was done by you know, let’s call it out. Dan Walker was the chairperson of the PUC, then why did they leave it there was there’s we still haven’t had a good explanation of why that was done. So I’ll agree with you that this tampering with the market and hooting, this price setting was a big failure. And one of the the myriad other things that were contributing to this, as well, including some blame on, you know, weatherization for the gas guys in lalala. You know, all these issues?
Bill Peacock 21:09
Yeah. And I think one of the points I like to make about this is that the problem there was that they refuse to let the market work. Instead, they decided to apply market theory that belongs in academia to a real live operating market, because they’re thinking, Oh, if we just boost the price of electricity, then that will incentivize more electricity to come online, more generation to come online. But there was a problem with that theory in that there was no more generation to come online, it was, it was frozen, or it was broken, or it was out of natural gas, whatever it was, there was nothing left to incentivize anybody else to come online.
Robert Bryce 21:48
And that should have been understood quickly by the people running the system say, well, we’re not seeing any more new generation, we need to, you know, take the cap down, and they didn’t do it. So I think to me, you know, Bill, what’s important is to think about okay, well, what’s next? Okay, so we were getting a better and better post mortem of the winter storm Yuri to me, what’s the question as we look at the future? Well, I think we the Texas grid has become too dependent on on gas and renewables. We need more baseload power, I don’t think we’re going to be building any more coal fired power plants, even in Texas, right. I don’t think there’s much of a future for coal in the US because of the political headwinds, particularly under this administration. That’s it? Well, if that’s the case, then I’m going to repeat what I’ve been saying for many years, which is we have to embrace the atom, we need to do more nuclear. And we need to get started. I think it could work in Texas, but you’re going to need some kind of market reform in Texas, it’s going to value that asset in a way that makes it sense for customers or for investors to come in. And it’s a problem now, even with gas fired generation, it’s going to be perhaps even more difficult with nuclear. But I wouldn’t take the lead here, I think we need to be, you know, embracing the future and looking at well, how do we make sure what’s the priority priority isn’t necessarily just have an open free market, let everybody play? You know, the most important thing is we have a dependable, reliable, affordable source of power that we have 24/7 that will not fail. And we need that if we’re going to continue growing. And right now. It’s just not working. We’re not incenting, enough new reliable generation in the system. So we need reform, will it happen?
Bill Peacock 24:05
the what there’s, I’ve read enough about that, in the papers that it seems to be that there are people who are working really hard on innovating new technology when it comes to nuclear energy, but they never build it. And that seems to me to be the problem because because there are regulatory barriers that that either just flat out prohibit the building of it, new generations of nuclear or it’s so prohibitively expensive to get past all the regulations that people just don’t build a deal to kind of understand. I mean, those
Robert Bryce 24:39
Regular problems in the white array inventory thicket around nuclear is just incredibly difficult. I mean, it just flat is and there are many people working around it and I have been very critical of the NRC, the Nuclear Regulatory Commission because of the way they have they rescinded some licenses in January that they had already granted under the Trump administration. You got me going here, peacock, I’m not I haven’t even had that didn’t have one cup of coffee this afternoon. But your
Bill Peacock 26:14
Well, that’s great. This is really good conversation. And it kind of leads back to your book that you wrote. And it’s a question of a question of power. And in that book, you you looked, I mean, you didn’t look just the United States, you looked at a worldwide issue of reliable electricity. And you know, it’s here in Texas, we actually experienced some third world conditions for about a week or so, when, you know, we didn’t have electricity, a lot of us didn’t have electricity or water. You know, in my house, I was fortunate enough to live next to a right around the corner from a nursing home. So I never ran out of electricity. But I didn’t have water for about a week, I was melting snow, I had fish tanks outside catching snow off the roof, you know, dry, run off off the roof, all these kinds of things. I mean, you would never expect to experience here. Yet. Those kinds of experiences are not that unexpected in different parts of the world. Ken, can you kind of explain to us why America is so far ahead of the rest of the world. When it when it comes to having a stable, reliable electric grid?
Robert Bryce 27:23
Sure. Well, I liked that question, Bill and something I’ve thought about quite a lot because I have for the last six years, I’ve been all over the world. I’m a very fortunate man. I mean, let me just be clear, I’m grateful I you know, I get to go around the world and talk to people about the most important issues in the in the world today, you know, energy and power systems and going around the world and looking at the world through the lens of electricity and the ice on Lebanon, Puerto Rico, what did I understand what is to me clear, electric grids provide almost a perfect reflection of the societies they power. So in Beirut, the because the system is because the entire government, the whole government, everything is corrupted in Lebanon, right? It’s very factional between the Shia, the Sunni, and the Maronites. And so they all have one thing that it’s the corruption is everywhere, so the grid doesn’t work. And so because the grid doesn’t work, nearly everyone in Lebanon pays two electric bills, one to the generator mafia, and the other two electricity do livan, which is the state owned utility. But EDL can’t provide power all the time. So people have two bills, they pay the generator mafia when the main power plant goes out, which it’s almost always out now, because Lebanon is in an ongoing crisis that is absolutely crippling the whole country that they do whatever they have to do. So what is clear to me is that you have to have a spritely grid, you have to have a society in which people believe in the system, and they have to pay for their own electricity, they can’t steal it, otherwise, the whole system degrades. So, you know, it’s a very difficult thing to make it to establish and to make work, electric grids at scale. And the US and advanced countries have done it because they have the rule of law, they have people that respect the law, they you know, and in places where you don’t have that rule of law where the system the society doesn’t work, the electric grid isn’t gonna work.
Bill Peacock 29:09
What distinguishes, I mean, how did we get to the place where we can have this kind of a grid? Because one of the reasons I’m asking this question is so we got this nice sought electricity grid, but as we saw just a year or so ago, sometimes that can be a danger. How did we get here and and then, how did how can we sustain that and not turn back into a third world country?
Robert Bryce 29:32
Well, I think first it takes a I think some sobriety on the part of the policymakers to to sit back and say, Wait a minute, we can’t monkey around with this system. This is too important. We can’t just leave it to the market. We can’t have overbearing government we ain’t wait but we need sobriety and we need the finally balance that that that tension between government and and and private in
Bill Peacock 30:51
And well, I’m all for stable governments and civil society. I’m not sure that seems like over history that over winning governments have, in fact, led to less stable governments and societies,
Robert Bryce 31:06
no doubt about it. But let me do I’ll just finish one point on that, because I was in Chicago last week. And I’d love Chicago. I hadn’t been there. And sometimes, Samuel Insull, who’s one of the most famous and most vilified titans of the electric age, was really a great innovator and knew that electricity was a natural monopoly. And so he actually sought regulation from the government because he said, Look, we’re in natural monopolies, it makes no sense for everybody to string wires to every house won’t work, right? We’re a natural monopoly, you got to, you know, we need proper regulation. So, again, I mean, this is tricky. And I’m not.
Bill Peacock 31:48
Well, here’s here’s my problem in Texas is that so was entirely against the interest of consumers, and the average tax and so I don’t know the exact way to fix that. But it always makes me cautious when I see government messing up things to think that government is the solution to all that.
Robert Bryce 34:52
Well, look, you haven’t heard me say that. I’m not saying it’s the solution to all that but what we are going to find and you know, back to where we started, you know,
This idea of 10.5 the reality of the 10 point 5 billion in debt that is going to be securitized in one way or another and will be repaid by consumers from both gas and electric utilities. One of the key issues that’s looming now is not just the 10 point 5 billion bill, but is the other civil litigation against are caught and the big utilities for the failures of the for the failure, the power failures. And then that leads to my point here, the key question is, is are caught a state entity because they’re caught has been claiming sovereign immunity? And so far, they have not been the courts of saying no, you’re not a sob. You don’t, you are not a part of the state. So what is it that again, this goes back to one of the fundamental problems, and the belief in where we’ll disagree? Is this idea of the RTO and the regional transmission organization and the restructuring of the market that was favored by Enron, i My first book was on Enron, that oh, well, we’ll just treat electricity like a commodity. And well, okay, it worked for a while. And you know, a lot of independent power producers made a lot of money, and a lot of traders made a lot of money. That hasn’t been good for the consumer. And I would argue still, again, that it is not and this couldn’t have billion is going to be paid by the consumer. And if ERCOT is found liable in the courts, and doesn’t have sovereign immunity, the 10 point 5 billion could be down payment. I mean, it could be significantly more than that. So just because there’s a broader skein of issues here, they’re in courts now that is going to take a long time to resolve. We’re just kind of in the second or third inning now in terms of what is this final cost going to be?
Bill Peacock 36:31
Yeah, and I’m glad you brought us back to that. Because I took I took your article and started doing some pulled the numbers out of that, start doing some research on my own, and then started trying to come up with some kind of annual costs to this thing. And my take on all this is that
You know what it costs on an average residential bill, and I’m estimating about $341 a year. And that’s going to go on to see those numbers, because I’ve been trying to get some numbers on that as well, because I was in fact talking to some guys about this yesterday, some lobbyists, the reliability unit commitment that’s different from the or DC or DC stands for wet again. operating reserve demand curve. Yeah. That’s the ruck you’re talking about. And that’s what I that’s what I was talking about as the price setters. You know, that’s one of the price matters out there. And it’s mainly the stuff that’s running on the ancillary market. Now we’re kind of talking back and forth, like we’re having coffee instead of talking to our to our audience, but but I think this is all important stuff. Right?
Robert Bryce 39:06
Right. Well, I’ve just pulled up the other piece that I wrote about Forbes, and this is from January. And to me, it’s interesting. My brothers in the insurance business, my father was in the insurance business, and they’ve had some success at it. And my brother is great. It’s wonderful in business. And I talked to him about this after I saw this first article about it, and I wrote about it, but 131 different insurers are facing, have sued or caught 131 insurers, so but you also have individual property and casualty and, you know, put slip and fall and other kinds of and tort claims against ERCOT. So, but these insurers are suing because they lost money, and they have people coming to them. And they say, Well, hey, it’s not as the ERCOT is the one that’s that’s responsible here. So just bring it back to this again, to just reinforce the 10.5 billions a lot of money. But if our code is found to be liable, and the legislature doesn’t grant sovereign immunity, well, what is that going to look like? I mean, because it’s going to be a mass tort claim. Not seeing it work so well here.
Bill Peacock 40:23
It’s a mess and you’re right, these lawsuits against ERCOT if they’re allowed to proceed, or either or not really against ERCOT they’re either against Texas ratepayers, or Texas taxpayers. That’s who’s going to be on the hook here.
Robert Bryce 40:36
Yeah, well, and there’s a lot of overlap between the ratepayers and the taxpayers
Bill Peacock 40:39
It’s the same the same bunch of folks right one way or another we’re gonna get it
Robert Bryce 40:44
I guess we will I don’t know whether my I guess my kids were you know even young kids with their pet bags um, they are they are taxpayers because they’re paying sales tax at the at the grocery store at the you know, here I’m going to date myself at the five and dime
Bill Peacock 41:24
And don’t forget you can go to Robertbryce.com and find out all you need to know about electricity and I really highly recommend his book that he wrote a question question of power right like like,
Robert Bryce: A question of power electricity and the Wealth of Nations and I’m on Twitter at power hungry PW are hungry and now bill I’m on Tik Tok. Yes, right? Tik Tok. I’m on PW are hungry on Tik Tok. I’m on YouTube. I’m omnipresent in my podcast is the power hungry podcast. So Oh, in my film, my documentary juice how electricity explains the world. Yeah. multiple properties. Peacock, I’m selling the soap.
Bill Peacock: All right. Well, thank you, Robert, for being here. And thanks to all the listeners for coming in and listeners today. And also once again, thanks to our sponsor, Texas scorecard.
Robert Bryce 9:16
And but why did that happen? It was because they got, as your numbers point out, I need to follow, I need to just pull it up real quickly. But over $20 billion, no, it’s more than that. The massive amount of subsidies was what motivated all of that spending. So the and I want to point out that there are numerous reports that would McKinsey and the Texas section of the Society of Civil Engineers had pointed directly to the problem of over dependence on weather dependent renewables. And that is one of the fundamental problems until ERCOT cancelled that the grid is going to remain I think in in a difficult position and consumer is going to pay the cost.
Bill Peacock 9:55
Yeah, I was just up to the Capitol testifying last week on Chapter
Robert Bryce 12:42
What I write about this business, and I got solar panels, why because I got big fat subsidy from the feds from the city. And then for a while they’re paying me $100 A megawatt hour that will shoot I’m getting 24 times the wholesale price in Texas for a while.
a philosophical argument about monopoly versus free market, and I don’t, here’s the thing, well, I’ll cut to it on the free market, I just hit electricity is different bill, and we talked about it as a commodity, electricity is different. It’s not a molecule, it’s a service, it’s not a commodity, and we can’t let the service fail. And I think that’s where some of the policy, a lot of the policy jumps and rails, right? Because, no, you can’t allow this network to fail. And yet, we’re treating it as a commodity and intend treating it rather cavalierly. And I think that’s the, the root of a lot of the problems we’re having in the system, and I’m just gonna throw that steak down in the sand.
Bill Peacock 16:19
I get that point. And I’ve heard that argument quite a bit. I would just respond to that by saying, I’ve also heard, you know, I’ve been around this business for a little while. And I’ve worked on a number of issues, where people have come to me and said, because I work for a free market think tank, and politicians, on the Republican side, at least want to be seen as champions of the free market. So when I’m going up there, not not that all of them are. And they get kind of angry at me when I can point out that they may not be that, but then they come to me afterwards and say, Look, Bill, you know, I’m as free market as the next guy. But free markets just don’t work in this industry. And they’ll point to homeowners insurance or electricity or wherever they title insurance, wherever it is. And so I’m a little skeptical when and I get your point. But I’m a little skeptical of arguments to say that free markets work everywhere except here.
Robert Bryce 23:20
I wish it would. But I’m not so hopeful because of the entrenched interests and the frankly, the complexity of the system as it exists now and whether it can be even and I say that humbly, because I look at it all. I’m thinking it’s a miracle even worse as it is.
Bill Peacock 23:37
Yeah, and I’m glad you brought up nuclear because that’s something I don’t spend a lot of time a lot I don’t understand very well, it’s not talking about just how it functions within the system, but just the building of nuclear generation at all. Obviously, it’s been a long time since anybody’s built nuclear in the United States, or probably around most of the world, I would guess. But it seems to me that
Robert Bryce 30:00
Enterprise and there’s that lie, I think to turn it back to nuclear, then Bill is there in lies the part that is going to require real finesse. And I don’t use that word very often. But I think it’s the right one is that, okay? If we’re going to incent nuclear energy to be built, what are the what’s the way to make it happen, and I think that eventually, the US government is going to have to have some kind of a national champion, similar to Ross atom, or in Russia, or SK power, I think in South Korea, that you have companies that are have strong government backing, and the government is bought in so that they’ll will handle the waste, for instance, which is an issue that only governments really, you’re gonna be qualified or be able to say, Okay, we’ll manage the waste or will govern the waste. There are a lot of supply chain issues here. They’re just require. They require stable governments and civil society. And that is a big requirement.
There’s a nuance here between this, but unbalanced. And I think it’s a difficult one. And I understand take your point about you don’t want too much government, but you don’t want too little either. A five and dime anymore at 711 While they’re buying a slushie or a bag of potato chips
Bill Peacock 41:05
Well, I think that’s a that’s a good place to bring our conversation to an end Robert and I really appreciate you being on the Liberty Cafe this week.
Robert Bryce 41:13
Always happy to do it Bill there’s much to talk about I wish you the best of luck always happy to talk about our car and start shaking our heads about darkness uncomplicated