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Historic blackouts push Texas to consider something new: Regulation

5 ERCOT board members resign
5 ERCOT board members resign 06:31

Austin, Texas — All the groceries spoiled and the water was out for days. Then Melissa Rogers, a believer in the Texas gospel that government should know its place, woke up to a $6,000 energy bill before the snow and ice even melted.

"The roads were awful, but we were running around town trying to get money from every single bank we could possibly think of," said Rogers, 36, whose Fort Worth family of four was left with $80 after the charges drained her accounts and took her husband's paycheck.

Now, the emerging response to a winter catastrophe that caused one of the worst power outages in U.S. history is not the usual one in Texas: demands for more regulation.

On Thursday, managers of Texas' power grid, the Electricity Reliability Council of Texas, are expected to receive a lashing in the first public hearings about the crisis at the state Capitol. There, the belief that less government is better is reflected in a part-time Legislature that meets just once every two years, and only for 140 days. The current session ends in May.

That leaves Texas little time to make last week's plunge into freezing darkness that touched nearly all of the state's 30 million residents one way or another — including grocery shelves left bare and miles of busted water pipes — produce tougher regulations that the state's GOP majority has resisted for decades. Many are skeptical, as a prior Texas deep freeze, in 2011, seems to have left the state no better prepared for an extreme weather event.

Texans hit with skyrocketing utility bills 09:26

Republican Governor Greg Abbott wants to force power plants to winterize after nearly half of the state's generation capacity was knocked offline by subfreezing temperatures. There's also new support for guardrails on Texas' deregulated electric market to prevent astronomical energy bills that financially devastated homeowners like Rogers, who frantically emptied her savings after wholesale prices, which are typically as low as a couple of cents per kilowatt-hour, spiked to $9 per kilowatt-hour.

At $9 a kilowatt-hour, the average U.S. home would have a monthly electric bill of about $8,000.

Free-market victims

"In a lot of respects, we're victims of our own attempt to let free market forces work," said Republican state Rep. Drew Darby, who sits on the House Energy Resources Committee that is digging into the outages.

His rural district includes two or three homes in the Texas oil patch that burned down as the power lurched off and on, and he heard of plants that couldn't burn piles of frozen coal outside. Even before the storm dropped six inches of snow as far south as San Antonio, generators in Texas were required to submit safeguard plans for cold weather. Darby suspects enforcement was scant.

"Typically, you know, the Texas Legislature pushes back on overregulation," Darby said. "However, my view on something as basic to human survival and need is we need to have reliable power and water."

At least six board members of the Electric Reliability Council of Texas, which manages the state's power grid, resigned this week ahead of likely calls for their ouster at the hearings. Officials in Houston have opened their own investigations into the outages, and prosecutors in Austin say they will investigate potential criminal wrongdoing.

President Joe Biden is set to fly to Texas on Friday, a trip that marks his first visit to a disaster site since taking office. Just weeks before the outages, Abbott had ordered state agencies to look for ways to sue the new administration over energy regulations that he said would hamper the state's biggest industry.

Abbott has put much of the fault on ERCOT, which he accuses of misleading Texas about the grid's readiness. But Abbott's hand-picked appointees govern the state's Public Utility Commission that oversees ERCOT.

Texas governor blames power grid operator for... 01:38

A federal report after the 2011 outages urged hardening electric generators against extreme cold, but neither the commission nor ERCOT required plant owners to do anything more than file the weatherization plans. There are no standards for what must be in those plans.

ERCOT staffers conduct spot checks at a small portion of power plants every year to, among other things, check on their progress at protecting equipment. But, ERCOT president Bill Magness said, "These are not inspections." There is no regulatory authority to issue fines or penalties.

Failed experiment?

"I'm personally willing to declare that the 20-plus year experiment in the ERCOT market is not up to the task — it can't do it," Karl Rabago, an electricity and climate consultant who served on Texas' public utility commission in the 1990s, told CBS News. 

He added that preventing a future grid freeze would require a range of changes, including better linking Texas' grid to the rest of the U.S., adding more distributed power such as small-scale solar and batteries, and hardening energy facilities against winter weather. Still, he expressed doubts that Texan energy regulators would learn from the devastating blackouts.

"There's a limit to the benefits that thorough hindsight can provide, if you're not going to honor your mistakes by making the changes to prevent them from happening again," he said.

Texas utility board members resign 06:05

Democratic state Representative Rafael Anchia said it often takes a crisis to push through transformational regulation.

"Regulation is a four-letter word in this building at times," said Anchia, who sits on the House energy committee. But "four million people without power and 12 million people without drinkable water, right, that gets everybody's attention."

In Houston, Mya James' diabetic grandmother was rushed to an emergency room as she struggled to breathe. The power had gone out two days earlier. Nurses at another hospital were collecting rain water in buckets to flush toilets.

James, 38, is a beauty product entrepreneur with customers overseas. When the outages began, clients in other countries were baffled: How could Texas, the state built on energy, not have any?

"It was very hard for people to comprehend," James said. "If we're known for one thing, let's be good at that one thing."

CBS News' Irina Ivanova contributed reporting.

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