Thread by @MichaelEWebber

It is very costly for the TX power producers (wind, solar, nuclear, coal, and gas) to underperform.

But for TX gas suppliers it is very lucrative to underperform. TX gas production down dropped 50% (80% in the Permian!) yet profits skyrocketed.

bloomberg.com/news/articles/…

This is the heart of the problem: Wind, solar, nukes, coal & gas power providers have a strong $$$ incentive to winterize & improve reliability b/c their lack of production was costly.

Gas suppliers made a handy profit from the flimsiness of their system. So why winterize?

BTW, I need to be clear here to differentiate local gas distribution companies (your gas utility) who delivered gas consistently to our homes (saving lives) and the gas industry that extracts and moves gas from wells/storage to the customers (including those gas utilities).

Oh, and Twitter needs an edit button. I wrote "down dropped" which is apparently a phrase I just invented. I'm good at writing English. Anyway, you know what I mean.

Wind & solar underperformed b/c of bad weather forecasting, frozen equipment, ice formation, snow cover, etc. -- that's bad and the renewables industry should fix that. But, they were also punished financially for that performance as they left a lot of $$ on the table.

Gas suppliers underperformed for the same reasons but were rewarded for their poor performance. Why would they care if production drops 50% when prices soar 300x? Losing half your production doesn't matter if the other half prints money. It is a moral hazard & a market failure.

There are many ways to fix it -- one way is to require a certain minimum safety performance standard like we do with auto safety, food safety, elevator safety, aviation safety....we mandate minimum safety standards and then those who meet the standard participate in the market.

Those who can't meet minimum performance requirements do not get to be part of the market.