Another stitch we have made is resisting the temptation to deregulate the power system in Georgia. We are still a “regulated” state meaning that from the power plant to the meter behind your house, the power company, with PSC oversight, is responsible and has complete control of ensuring reliability. Like most states, Georgia asks its utilities to do reserve margin studies and plan for the worst event that could happen in any given decade. ERCOT — the Electric Reliability Council of Texas — is a deregulated energy-only market. In general, deregulation can lead to a lower standard of preventive maintenance at plants and lower reserve margins — both driven by a desire to save money.
In Georgia, we have sewn into our fabric a winter planning reserve margin approaching 26 percent. In fact, the Georgia PSC reviewed the level of contingency in 2020, and allowed Georgia Power to substantially increase their planning strategy for moments just like Texas is experiencing. Why? Because in 2019 we noted a small “tear” that identified a key winter reliability risk.
To fix this, numerous stitches were made, including the narrowing of the difference between summer and winter weather-normal peak loads, higher volatility of winter peak demands relative to summer peak demands, cold-weather-related unit outages, the penetration of solar resources, increased reliance on natural gas, and market purchase availability.
But we are not perfect. There is no doubt that if we experienced single digit temperatures — especially for an extended period, it would stretch the fabric. Throw in some freezing rain that brings down pine trees on power lines, and it probably gets worse. But the attentive stitching that me and my colleagues do alongside our staff and the utilities has proven to be a stitch in time.
We’re not perfect, but we have a proven strategy. And once Texas digs out of this storm, I am sure Georgia and all states will draw on the lessons learned from their experience. In the meantime, prayers for Texas as they recover.
Tim Echols is vice chairman of the Georgia Public Service Commission.