After the Texas Winter Storm, a Clarion Call for Investing in Energy Efficiency

Photo: A street in Wills Point, outside of Dallas, during the Texas Winter Storm of February 13-15.

At 4:00 am on Monday morning, February 15, everything stopped and then started to grow cold. The text from Austin Energy said it started rolling blackouts that would last a maximum of 40 minutes. Minutes turned into hours that turned into days. But we were lucky. In 2011, our house had been fully renovated, including energy-efficiency investments in insulation and new windows. It never dropped below the 50s in our house. Those in older or low-income homes across Texas weren’t so lucky.

The effect of the blackout at home

A lot of people are talking about what went wrong, how Texas’ deregulated market and the lack of proper planning — especially in the face of a changing climate — failed its citizens. Power generation infrastructure and transmission should have been weatherized. In 2015, I worked with others on HB 2571, a bill in the Texas House introduced by now-Dallas Mayor Eric Johnson. The bill would have required state agencies — including the Public Utility Commission of Texas, which regulates the Electric Reliability Council of Texas (ERCOT), the state’s electric grid operator — to include the latest climate data in their strategic plans. It was killed on the House floor.

The state leadership has resolutely refused to admit that climate change is already wreaking havoc on the state, from droughts to floods, hurricanes to the latest Texas winter storm. They claim they could not have predicted a storm of this magnitude. They also didn’t think Hurricane Harvey would wreak such havoc. The problem is: When the latest climate data isn’t used to plan future resource needs, it is not adequate planning. Using past climate and weather data for long-term planning is like driving down the highway while looking in the rearview mirror.

But that’s at the generation and transmission level. What about in homes? Long before the Texas winter storm, the state has been resisting effective energy-efficiency and weatherization policies. It’s not alone in that either: Many states, especially across the southeastern and midwestern U.S. do not prioritize energy efficiency. The Alliance for an Energy Efficient Economy ranked Texas 29th in the nation in its latest energy efficiency score card, and its relatively high score is based on some state programs aimed mostly at commercial and public buildings.

Despite being one of the first states to implement an Energy Efficiency Resource Standard (EERS), Texas has among the lowest targets in the country, despite having the highest potential. The balance between a competitive market and protecting consumers weighs heavily on the market side with many consumers literally being left in the cold.

Texas weatherization for multifamily housing

The American Reinvestment and Recovery Act of 2009 jumpstarted weatherization in the state, including infusing a revolving loan fund for public buildings with much needed resources. But antiquated policies, market barriers and ineffective marketing prevented widespread uptake of energy efficiency in the residential sector, especially multifamily housing.

Not tackling weatherization upgrades for multifamily housing is a perennial problem. It’s the classic case of a split incentive: the owners of the building are not the ones who pay the electric bills. This is further compounded by the fact that in a city like Austin, which has a booming population and a housing shortage, there is never a shortage of tenants who just need a place to live with reasonable rent. According to the American Housing Survey, in 2013 (the most recent data), Austin had 184,000 multifamily units, which does not take into account the building boom that has been going on subsequently. If the apartments going up near my house and downtown are any indication, many of the new builds will be out of reach of people who struggle to pay their bills.

Photos of people freezing in their apartments during the Texas winter storm shocked people beyond the state’s borders. But, unfortunately, they were not surprising. Energy efficiency is often promoted as a luxury add-on for environmentally-minded consumers, but it is a necessity, especially in a state that suffers from increasingly extreme weather. After Hurricane Irma hit Florida, the buildings built to a more stringent code put in place after Hurricane Andrew fared much better than those that were not.

The Lone Star State’s deregulated market

Energy efficiency seems like a no-brainer, but in the deregulated Texas market, (Austin Energy is a municipally-owned utility, and therefore not subject to the competitive market), it often struggles to gain a foothold. Time after time, energy efficiency proposals brought to the retail electric providers (REPs), which are the customer-facing electricity players in the deregulated areas of the state, are shot down on the grounds that they would have to pass the costs on to the customer, especially if initiatives went beyond the very-limited available programs and funds provided by the transmission and distribution utilities.

However, there are a couple of issues with that argument. First, while energy efficiency does incur some upfront costs, it has a high return on investment and those costs can be combined with savings to so that the overall bill remains the same (or lower). Second, in a deregulated market, the priority is profit, and if the business model is set up that more electricity you sell, the more money you make, you have a disincentive for people to use less electricity. Several policy solutions exist to address this issue, but there has to be a will to implement them. Third, while Texas likes to brag about low energy prices, in the deregulated areas of the state, add-on fees abound to make those bills unaffordable, and in instances like last week, price spikes lead to outrageous bills. Further, a more energy efficient home demands less from the grid, which would have helped leading up to the blackouts during last month’s Texas winter storm. 

After the Texas winter storm, we can and should do better

No one should freeze in their house, or become overheated, as is the more common problem in Texas. Energy efficiency shouldn’t be a luxury, but a necessity, especially for people in multifamily homes. Low-interest loans exist to help owners, but they need incentives to undertake them, and not at the expense of their renters. Policies to incentivize energy efficiency, both in weatherization and better building codes, will drive the market to respond, creating jobs as well as homes that are more comfortable in any weather.

February’s Texas winter storm should act as a wake-up call. Doubling down on the same failed policies will not improve reliability or resilience of our grid or our homes. Investing in energy efficiency is a resilience strategy that reduces carbon emissions and water demand while protecting people when extreme weather hits. It may not feel as urgent as demanding answers from ERCOT, but it is critically important.

Image credit: Matthew T Rader/Unsplash