Winter Storm Uri: A Disaster for Texas and its Economy

Weeks after a massive, treacherous winter storm resulting in power outages, burst pipes and food shortages, Texas struggles to recover.

Winter Storm Uri brought snow and frigid temperatures upon Texas from Feb. 13 until Feb. 17, leaving Texas with a difficult recovery. In some counties, temperatures fell below minus 15 degrees. 

Record-low temperatures caused the state’s electric grid to lose control of the power supply and ultimately fail. Millions of people were left for days without access to electricity and heat, stuck in cold homes and facing water and food shortages.

Long lines wrapped around blocks as people were waiting to enter supermarkets. Many grocery stores were closed or couldn’t restock because of the storm, causing food shortages. (Source: New York Post)

Many Texans and officials were quick to question the cause of these power outages and demanded accountability for the disaster. Due to the increased use of heat in homes during the frigid temperatures, the power grid was unable to withstand the demand for electricity. 

However, the Electric Reliability Council of Texas, controlling 90 percent of the power grid in Texas, was unprepared for this massive, disastrous event. During winters, and in this winter particularly, the ERCOT had difficulty obtaining natural gas, the resource that the grid relies on the most. Frozen wind turbines also made it increasingly difficult to obtain energy. Because Texas operates on its own power grid, no measures were set in place by the federal government to prevent the grid from failing or force preparedness for events like these.

ERCOT controls 90 percent of the power grid in Texas. (Source: Texas Comptroller-

Regardless of these obstacles, ERCOT prioritized getting Texans their power back at an efficient speed. Over 4 million households reported that they lost power during the beginning of the storm. In less than a week, reported outages were decreased to approximately 537,000 homes and offices. The ERCOT accomplished the feat by encouraging people to reserve their power and purchasing additional wind, solar and thermal energy outputs.

“We should be able to restore some customers this afternoon due to the additional wind & solar output, & additional thermal generation that has told us they expect to become available,” ERCOT tweeted. “But the amount we restore will depend on how much generation is actually able to come online.”

Though seemingly ideal at the time, the actions taken to restore power to Texans by the ERCOT are now seeing financial consequences in Texas’ electricity market. According to ERCOT, $2.12 billion, about 17% of the total amount owed from last week, has not been paid by electrical retailers yet. A further issue arises with the  ERCOT having paid $800 million in revenue to power plant operators, but now owing $1.32 billion, due to the lack of funds having been paid back by electrical retailers. 

Another problem on the horizon is if some retailers aren’t able to pay, it’s unclear how the debt will be paid to the generators,” ERCOT Chief Executive Officer Bill Magness said. “The agency is currently trying to determine how many won’t be able to pay so it can come up with an answer.”

Struggling to recover, the ERCOT has come up with possible solutions to address their financial concerns. One proposal suggests that if the participants are unable to pay what they owe, they can split the cost that’s owed to the generators with other electricity companies and retailers. However, this could be taxing on some retailers that are already struggling financially.

Along with these concerns, ERCOT is also being subjected to multiple lawsuits. One from Denton, a city in Texas that their power costs went sky high during the storm, argues that the additional payments were “an illegal and unconstitutional raid by [ERCOT] on the credit of cities that operate electric utilities.”

The first page of Denton’s lawsuit against ERCOT. (Source: Denton Record Chronicle)

These financial concerns that the ERCOT faces have yet to be resolved and addressed. Regardless, the repairs of all the damage from Storm Uri are estimated to be extremely costly and time-consuming.