Spooky Threats to the Electric Grid

sunAn increased risk from Islamic terrorists and multiple assaults on U.S. companies from places like China and Russia show that risks to the electric grid are on the rise.

“A widely circulated white paper by Symantec in June cited an “ongoing cyber-espionage campaign” against the energy sector by a shadowy hacker group known as Dragonfly. The report added that energy grid operators, utilities, oil and gas firms were at risk—not just domestically, but abroad as well. Additionally, others say the industry has far more work to do in the face of rapidly multiplying challenges to U.S. interests.”

In September and October of 2014 a large solar storm coming from heightened sun activity had scientists spooked that the electric grid could be compromised,

“A “strong” solar flare that launched off the sun Wednesday afternoon could cause some fluctuations in Earth’s power grid and slight disturbances in satellites and radio transmissions on Friday and Saturday.

Major disruptions are not expected, even though the flare was on the high end of the solar flare scale. Wednesday’s flare followed a weaker flare late Monday.

“We expect geomagnetic storm levels in the G2 (moderate) and G3 (strong) range,” said NOAA space weather forecaster Bill Murtagh.”

The scary aspect to a solar flare storm if destructive enough is that it could permanently take out the electric grid and would require months of rebuilding.

Hacking into the electric grid for the purpose of disrupting electric supply to critical internet infrastructure has been reported on multiple occasions.

“There were two separate physical breaches at a Pacific Gas & Electric (PG&E) Silicon Valley substation that have heightened security fears within the industry. A PG&E spokesman told CNBC that the utility company plans to spend $100 million over the next three years “to enhance security at our critical facilities.”

These are just some of the scary things the electric grid has to deal with this Halloween and the threat is real and may one day affect all of us.

America is Using Less Electricity Even With All the Gadgets

opowerWe have a lot of gadgets and gizmos in America these days and I have heard of some parents even installing TV’s in all their kids rooms.

You would think of all the TV babysitters, iPads, iPad mini’s, Kindles, etc that somewhere along the way we would be consuming a ridiculously large amount of electricity.

What the energy information administration has discovered is that we will only see a 0.6% a year rise for industrial users and 0.7% rise for households.

These small demand increases will continue at about this same pace all the way until 2040 as far as government estimates can foresee.

Why is it that we are seeing demand slowly creeping up instead of the 8 % yearly consumption increase that we are used to?

According to the Wallstreet Journals findings, a lot of this has to do with the manufacturing sector really decreasing the amount of electricity and other energy that they use in the production of goods.

Some of the decrease is directly related with the recession as can be seen in years 2008, 2009, small increase in 2010 and down again in 2011.

It isn’t all about the recession though. We are using some spectacularly efficient appliances, light bulbs, and cars these days. We simply don’t have to use as much electricity to cool our house, warm the house, light the house, wash and dry clothes, etc.

The interesting downward trend in electricity consumption is causing less pollution but making it hard for electric companies to turn a decent profit. Since virtually all of our electricity is created on demand and not stored electric companies have a lot of capital tied up in electricity infrastructure.

Much of the electric utility infrastructure has been partially government controlled and regulated since it went into existence. The government basically called the shots on the infrastructure even though companies like TXU previously known as TU Electric and other such companies like Houston Power and Light built and owned the equipment.

If the regulators said they had to build it they built it and there was usually some type of reward, subsidy, or something to go along with it to make sure these companies kept pace with demand and the state had a reliable electric grid.

smartThe government in a way has come to the rescue for these electric utility companies as they are regulating and enforcing the upgrades necessary to move and replace old 50’s technology to today’s smart grid high-voltage transmission lines. In just the last couple years the US has spent over $35 billion on these superhighways for electricity.

So even though electric utilities may not be making much money any more from the consumer in generating electricity they are still darn well making a decent bit from the government subsidies that they get paid in building out the new US smart grid.

The government regulators have set up the upgrade network for utility companies so that they can offer these companies large returns far greater than what they get selling retail electricity. The utilities can then charge excessively for these upgrades to the electric utility customer. The government in a way is adding yet another tax to the consumer through the TDSP portion of an electric bill. Electric utilities are encouraged to further upgrade and build out the electric grid and deal less in competitive retail sells. They will do this so long as the government is there to pay them for building out a bigger more upgraded electric grid.

You may start to notice new fees like, government service fees, TDSP add-ons, distribution surcharges, smart grid upgrade service fee, etc. in the transmission and distribution section of your electric bill.

These additional fees and charges are creeping up on many peoples bills to a degree that is overtaking their actual electricity costs. You may soon find yourself paying more for that electric pole, transformer, wire, and smart meter than you are for the electric service.

Companies like Energy Future Holdings have both a regulated side (Oncor Electric Delivery) and deregulated side (TXU Energy). I would assume as have many electric companies already that Energy Future Holdings may start putting most of their new investment energy in upgrading their electric grid equipment, poles, wires, etc. as they are guaranteed an above average return by the federal government.

Unfortunately the average electricity consumer is not guaranteed an average electric bill as can be seen by the people living in New York City who pay more for their transmission and distribution charges than they do for the cost of electricity.

Being in the federally regulated electric utility business seems to be good business as these regulated utility companies will make 11.7% to 12.9% return as set by the Federal Energy Regulatory Commission. This return is guaranteed and it isn’t based on load growth that has small room for error.

In summary I think the drop in demand for electricity is related to more efficient appliances, lights, etc. but I also believe it is related to a long lasting recession that will likely continue for a good 10 years.

What I think is going on in the electric utility industry is hand writing on the wall. I believe that the investment in the electric grid at this pace and using this many dollars has to do with the government attempting to prop up the economy with government created projects.

Don’t get me wrong, updating the electric grid is very good and needed but I just see the all at once strategy as a sign of something else. I truly believe that the government knows that the economy will be in the dumps for many years out. They are using this time to create the illusion that we are moving out of the recession and promising it will stimulate the economy when in reality we have a long hard road ahead of us. We have the new gadgets and efficient appliances but the jobs and consumer consumption are shrinking and they will continue to do so for many years.

Perplexing Problem of Electricity Outages, Brownouts, and Blackouts

What a Nuclear Power Plant Looks Like From Several Thousand Feet

So why don’t the electric utilities simply put more power on the grid so as to prevent the shortage of electricity in the first place?

For the average electric service consumer this is a common and reasonable question to ask but really you should be asking a different question.

The question should be, “Why isn’t there more power “Available” to put on the grid than there is currently in order to prevent a blackout?”

Try and think of electricity like water going through a pipeline. Just as you can only force so much water down a pipeline at one time so is the case for electricity. In the pipeline there is more than enough water to meet the demand and you simply turn on the faucet and take what you need.

Try to think of the flow of electricity through the electric grid as you would think of the flow of water through pipe lines. At a set voltage (pressure) it’s impossible to make any more electrical current (volume) go down the line than is possible to flow through the end appliances (valves).

Electric power travels down the grid in a similar manner as in your water line, we take what we need from the power that is made available on the line at a certain voltage.

Back at the power plants only once more electricity is being demanded can the power be generated and more made available on the power lines. If a few power plants go down or a hot summer days estimates are off it could be too late to turn on another power plant in time.

Nuclear plants are very expensive and hard to shut down and start up so when less energy is demanded the first power plants to turn off are hydro and gas plants.

If there is a hot summer day in Texas the following day the gas plants get turned back on again to meet peak demand during that day. The trick the grid operators have to achieve is in creating just the exact amount of electricity as is demanded during the day and sending it down the power lines.

When demand estimates are off and businesses and residences are in danger of having a power outage Texas works a program that involves businesses who have prior agreed to turning off their facility during peak times in the day to keep the flow of power going in order to prevent a brownout or blackout.

Often these facilities have backup generators that create electricity while they remain off the grid and so their facility still runs with the electricity they create on site.

The electricity demand curtailment programs available in Texas are listed below.

Load Resource Participation: Customer load curtailment offers can be bid into a number of different ancillary services markets. Participation requirements and compensation depend upon the particular market, and all programs require that customers have real-time telemetry installed. For the Responsive Reserve and Non-Spinning Reserve markets, capacity payments are made regardless of whether the customer is called upon to curtail. click here for more info on LRP

Voluntary Load Response: Participants get compensated for curtailing electricity load at their will, in response to the actual or projected hourly MCPE. click here for more info on the VLR program

Emergency Interruptible Load Service (EILS): Participants bid to provide electric load reductions. The program is for helping in emergencies rather than simply high price conditions on the ERCOT grid. click here for more info on EILS

If you would like to participate in one or more of these demand curtailment programs with the state of Texas our group of energy consultants can assist with all the details. Please use our contact page to let us know if you would be interested in this unique way to receive money in exchange for turning your power off for a short interval and running on generator power.

Another Free Market Failure Accusation About Texas Electricity Deregulation

Clean Coal Power Mike Norman with the Fort Worth Star Telegram hits on the topic of if Texas deregulation is really working. I assume he places blame on deregulation as the reason for the Texas power supply failure because the title of his article states, “The Texas free market for electricity just isn’t cutting it“. Maybe he is just meaning that as good as deregulation is it can’t stop the EPA and other non-governmental organizations from halting all oil based energy production thereby raising consumer costs. Deregulation being a failure is a popular argument because any time prices go up or supply capacity is reached we hear about it from the political side that benefits the most from this view.

Is deregulation to blame for every time something bad happens in the deregulated Texas electricity market? No you can’t always blame it on deregulation but it is a piece of the puzzle so yes it is to blame sometimes. The main problem with deregulation isn’t inefficiencies building electric grid infrastructure and power production as this gets approved by the state and then shutdown by the EPA and federal government, not deregulation. Texas has broken up the generation companies and such away to allow new investors to come in and build power facilities but not many have filled this hole left open for increased competition. I think new investors have not come in because you are talking about investing in and building highly federally regulated things like coal, natural gas, and nuclear power facilities.  What new investors want to do what TXU just got shutdown by the EPA for trying to do? I see problems with how some retail providers try and use tricks to market their electric rates but regarding power supply being built out the bottleneck seems to be in government regulation still being in the mix too much.

Even if the market was regulated again under one monopoly per electric utility area you would just as easily be able to blame brownouts and blackouts on the monopoly regulated electric utilities just like deregulation gets blamed for things now. I don’t think Mike is trying to place all the blame on deregulation but he is pointing out that you will see an electric bill increase regardless of the provider you choose because of some recent failures in the Texas deregulated market. You see you very likely will find more non-negotiable ERCOT related fees on your electric bill eventually because of lack of electric supply available to meet demand but who is really to blame for this?

Mike explains that a free market should work in theory because investors are encouraged to place their money where the highest return will be received and in so doing offer just enough electricity to cover the demand as well as spikes in demand. In a perfect system the investor is rewarded a maximum profit for producing just the right amount of power with very little waste left over.

The problem Mike sees with the current deregulated market in Texas is that power plants break down or have to be shutdown to fix or maintain it resulting in loss of supply. If Murphy’s Law is in effect and a power demand spike occurs around the same time as a maintenance shutdown all of a sudden there is not enough power to go around for everyone.

These imperfections are problems that political powers bring up in order to fault the great electricity deregulation experiment of 2002. Will this blame game reverse deregulation in Texas? I really doubt that deregulation can be reversed anytime soon. There is huge public support for energy choice in Texas. Many people can show you on their electric bills how they have saved money because of deregulation simply from using our Electricity Bid website.

Is Deregulation to Blame for Lack of Sufficient Power Supply in Texas?

The problem we are faced with in regards to electric power supply in Texas for 2012 is unreliable power supply due to not enough power plants in operation. Is deregulation responsible for this lack of power?

No! In fact TXU was approved for and planning to build 11 new coal fired power plants that utilized clean burning technology and significantly reduced pollution from these plants compared to the old mothballed coal plants from the past. The prior mayor of Houston and Democratic nominee for governor of Texas, Bill White complained in 2010 that these plants were unnecessary but now they seem all too necessary. ERCOT predicts very tight power supplies this summer and this has politicians frantic but I’m sitting here wondering why we didn’t just get started on those 11 coal plants in 2010?

I think what Pat said has a lot to do with our problems…..Pat Ennis with Priority Power Management said, “”I’m not the smartest guy around, but I’d be willing to bet that… we’re not going to have any coal plants built here in Texas for a long time — between the EPA and the environmentalists, coal is kind of a no-no.”

The state of Texas has been contending with attacks from the Environmental Defense Fun and the EPA in regards to an argument that is mainly about the states CO2 emission levels. Instead of focusing their argument primarily on pollution like mercury levels and other scientifically verifiable pollutants they were able to stop 11 new coal fired power plants from being built by TXU because of a global warming argument.

Many scientists and climate scientists non-affiliated or backed by the United Nations IPCC organization disagree that global warming has a negative environmental impact or that man has anything to do with it. Over the last decade their has been a decline in average global temperatures and so to even argue CO2 levels to prevent Texas from expanding their power capacity only serves to hurt these environmental activists causes.

What Can Texans Do to Increase Power Supply?

Does anyone remember back a few years ago when TXU proposed building multiple state of the art clean burning coal power plants? These power plants would have significantly updated the power infrastructure in Texas but the plan was shutdown because of environmental nut jobs. Even though the power plants would have been state of the art cheap coal power with significant reductions in pollution compared to current coal power plants in operation the plan did not go through. The state of Texas must fight the EPA and federal government politically where it hurts and take back our state and its ability to provide power to our citizens.

Even with an unsatisfactory amount of power generation plants built in Texas we have seen a steady increase in large commercial and industrial facilities building on-site power grid infrastructure that are little mini power generators for their companies. These miniature power generators also known as distributed generation systems account for a large portion of the overall electricity consumption in Texas. During peak demand periods in the day these generators can turn on resulting in no need for the state to start rolling blackouts in residential neighborhoods.

The Texas demand curtailment program has been a huge success. Companies are paid to enroll in a program that they do not even have to participate in when and if they are asked to turn off their power for maybe only 20 – 30 minutes in the span of 1 month. The program is enrolled to it’s limits each time Texas opens it back up. What does this mean? There are likely more than enough large commercial and industrial facilities that would jump at the chance to shutdown production for a short interval in exchange for being paid by the state of Texas to do so. Consider that many large companies like this shutdown once a month anyway to test their back up generators so why not get paid to do this?

Solar generation at this time is not a good option for solving the states problems but has limited uses.  As we have seen, large federally backed companies like Solyndra have not even been able to stay a float because of the expense it costs to produce cheap affordable power using solar. Hey I am a fan of solar but like most people I can’t afford to build a solar off the grid system on my home or business. If I can’t afford the system like most of us why would you think the federal government can? We are at record breaking tax deficits in the beginning stages of an economic collapse and those tax dollars are to be used for things that are considered affordable and have at least a 10 year return on investment. Wind power is a partial option but is only viable to use in combination with natural gas power generation as it can share in the control systems and connections to the grid.

The smart meters, and energy efficiency programs utilities across the state offer continue to assist in teaching home owners how to make their homes more efficient and lower their monthly energy bill. These programs should continue to be encouraged and promoted through local electric utilities that control the power infrastructure.

Amarillo, Texas Benefits from the New Nodal Market Structure

amarillo texas electric rates

Xcel Energy Services Inc. on behalf of Southwestern Public Service Company is headquartered in Amarillo Texas and is a fully integrated investor-owned electric utility that generates, transmits, distributes, and sells electric energy to approximately 386,000 energy consumers in the Panhandle and south plains of Texas and eastern New Mexico. Amarillo is not within the Texas Electric Reliability Council of Texas footprint. Amarillo Texas is outside the main electric grid that is used by the rest of the state of Texas.

Because Amarillo Texas is a part of the Southwest Power Pool and not ERCOT they are not subject to participate in the advanced meter program ERCOT is doing or the nodal market system that is revamping the ERCOT electric grid.

A new wholesale market structure will bring positive changes for consumers outside of Amarillo, Texas. The Electric Reliability Council of Texas (ERCOT) is set to change the current zonal market to a more efficient nodal market. You may be wondering exactly what this is and what it means to you.

In essence, the transmission grid in a zonal market is divided into different zones. The electricity in all of the units within one zone is dispatched at one price. A nodal market is laid out to match the transmission grid instead of breaking it up into zones. The value of electricity for every location, outside of Amarillo, Texas, is determined by various factors.

As confusing as this sounds, the benefits of a nodal market include more efficient dispatch, better price signals and the ability to “lock in” prices for electricity the day before it is actually delivered. The nodal market is much more precise and advanced than the zonal market.

If you have not compared electricity rates for Amarillo, Texas lately, now would be a good time although because Amarillo does not participate in the competitive Texas electric market you will not be able to change providers. The new market is sure to bring changes in the rates of area providers surrounding Amarillo. If you have a few minutes to spare, you can compare rates with our comparison chart but keep in mind if you are in Amarillo you can compare but you cannot switch to a new electric provider because Amarillo Texas has not opted into electric choice at this time.

Our unique comparison chart lists area electricity providers and their current rates outside of Amarillo Texas. You can see at a glance who has the lower rates and we even connect you to each provider’s website for further investigation.

If you prefer you may also call us at 1-800-971-4020

Take advantage of the new nodal market being implemented in Texas by using our comparison chart to find the provider that fits your electricity needs and budget outside of Amarillo Texas.

Electricity Bid helps you find an electric rate and provider to save you money and keep life simple.

Get in touch with us!