Ed Hirs - Energy Fellow, University of Houston Joins Houston's Morning News

Episode Transcript

Speaker 1 (00:00):
Yeah, I like our fires live. Six twenty three is
our time here in Houston's morning to do is that
means the electricity is flowing through. Doctor ed Hurs joins
US Energy fellow at the University of Houston. I get
the impressions sometimes that Urkats maybe out of either abundance
of caution or just after all the flack they took
for not being transparent with us during URI when we

(00:21):
had so many power problems, that maybe this is why
they are reacting with these premature what I would call
premature warnings about losing power this winter. They seem to
be concerned about the grid. Are they concerned about the grid?
And if so, why I thought we hardened the grid.

Speaker 2 (00:37):
Well, we hardened the grid, we just didn't expand the grid.
You know, Urkat said prior to URI, there was a
five percent chance of rolling blackouts in the event of
a storm like Cury. This year, it's an eighty percent
chance of rolling blackouts in the event of a storm
b like Cury. And the reason is we haven't added
any power plants to the grid since twenty twenty one.

(01:01):
You know. The RKOTT management is directed by the Public
Utility Commission which is directed by the governor, and Uricott
ordinarily doesn't make investments. It's unlike other grids which will
go out in advance and contract for power. Rkott doesn't
do that.

Speaker 1 (01:21):
And so we.

Speaker 2 (01:24):
Texas leadership has to provide the incentives for companies like
NRG or Vista Orcalpi to build new power plants, and
we haven't done that. We remember last March, Blackrock was
in town. The governor and the Lieutenant governor went to
Blackrock asked them for ten billion dollars to build natural
gas power plants, and Blackrock said, no, we're not going

(01:45):
to do it. We can't make any money the way
you've got your market set up. And in twenty twenty one,
Berkshire Hathaway Energy and star Ward Energy Capital both proposed
bringing nine thousand to ten thousand mega loots a power
plant to the grid. Those would have been operating by now.
All they asked for was a nine percent rate of return,

(02:05):
and the state leadership said, no, we don't believe in
paying for people to stay on the bench. You know,
the challenge is the Texas electricity market. The aircut market
is electricity only, and so only those generators that are
actually in use today are getting paid. If the Texans
were paid that way, only those guys taking the field

(02:27):
yesterday would have been paid. Those who stayed on the
bench wouldn't get paid. And you know when we have
peak in the winter and peak demand in the summer,
that's when we need all power plants there. Well, today
we don't have enough power plants to service us in
you know, cold winter night.

Speaker 1 (02:45):
Well, and the last time I checked Doctor Hurst, we
are still adding population, and we're adding a lot of businesses,
and we're adding a lot of businesses that use a
lot of power. So there's a real disconnect here. We're
living on borrowed time unless we get some more power plants.

Speaker 2 (02:59):
No, you're absolutely right. And as soon as we can
get any end. If you and I were to start
today with the Jimmy and Ed Power Company, it would
be maybe two years. If we could find the equipment,
probably four years and then get the connects. You know,
this is going to be a real challenge. You know,
we've got long duration batteries that are joining the grid

(03:21):
very quickly, but you know, we don't have enough of them,
and so in the meantime we need natural gas power
plants to spend up, and to be fair, nobody wants
to do it because they can't make any money CPS.
The city owned utility of San Antonio bought two relatively
new power plants for fifty cents on the dollar. Earlier

(03:42):
this year, n our G sold off one old unit
for about forty cents on the dollar. So building a
new one is not a good economic objective for anybody
on Wall Street. They're not going to give you the
money to do it, gotcha.

Speaker 1 (03:58):
So it's going to have to come up on the state,
is what you're saying.

Speaker 2 (04:01):
It's going to have to do that, or we as
a state are going to have to guarantee people a
rate of return. And you know in the old days,
that's what happened. The chairman of the board of URKAT
last week said, well, this ain't your granny's grid. Well, no,
granny had a grid that actually worked. It was in
the end reliable, it was a direct supply chain. And

(04:24):
today what we're left with granny's old generators and they're
breaking down.

Speaker 1 (04:28):
Is nine percent affair return? Or is that asking for
too much? Is black Rock guys asking for too much
for a nine percent return?

Speaker 2 (04:34):
I you know nine percent rate of return when everybody
else is given you fifteen, twenty and thirty or or less.
You know it's stable. It's what needs to happen. You know.
Without power, we can't stay in the twenty first century.
We can't talk on the radio, we can't have our
cell phones, we can't microwave our bacon. We're we're in

(04:56):
deep trouble without electricity. And for what electricity provides, the
cost of it is really just a small fraction of
the value.

Speaker 1 (05:05):
All right, doctor Hurris, as always, thank you, appreciate it.
Denners you fellow, University of Houston, doctor Ed Hears,