Hurricane Beryl exposes Houston’s fragile power grid

Hello and welcome to Energy Source, coming from Houston.

When I presented last Tuesday’s newsletter, Hurricane Beryl had just passed through this part of the world.

I wrote then that the industrial fallout appeared to have been contained; for the most part, drilling rigs continued to pump and refineries continued to operate. That remains the case: the energy complex appears to have escaped largely unscathed.

For Houstonians, it’s a different story. A week later, nearly a quarter-million homes in the area are still without power. For the fourth-largest city in the United States, and the so-called “energy capital of the world,” that’s pretty embarrassing.

As recovery efforts drag on and complaints mount, my column today examines what this says about grid reliability in America’s energy hubs.

I look forward to hearing from my readers, especially if you’re in Houston. As Texas ramps up its efforts to attract coastal businesses, could a substandard power grid be hindering the state’s world-conquering ambitions? If you have any thoughts, feel free to contact me at [email protected].

As always, thanks for reading. — Myles

Beryl Exposes Fragility of US Energy Capital’s Power Grid

It’s been more than a week since Hurricane Beryl hit Houston. But for many residents who still don’t have power or air conditioning, the effects are still very much present.

In the fourth largest city in the United States, frustration is running high.

“It’s absolutely crazy,” said Seán Glynn, 53, a marketing manager in the city, who was without power for a week, forcing him to repeatedly postpone job interviews.

“This is a city that’s often in the path of hurricanes… and we’ve seen some pretty big ones. But this wasn’t a major hurricane. This was a Category 1 hurricane. And to have a million people without power for over a week? That’s a total lack of preparation.”

There were nearly a quarter-million customers, or households, still without power last night, according to poweroutage.us, which analysts say likely equates to more than a million people as a heat wave pushed temperatures near 100°F (37°C).

While that’s down from 2.7 million customers last Monday night, the pace of recovery amid scorching heat has been too slow for many. CenterPoint, the city’s main electric company, has been particularly criticized.

“The failure of power companies to provide electricity to their customers is completely unacceptable,” Texas Gov. Greg Abbott said at a news conference Sunday. “CenterPoint appears to have been caught off guard by Hurricane Beryl’s arrival in Houston.”

As the situation calms, uncomfortable questions are being raised about the resilience of the power grid in America’s energy epicenter, where demand for electricity and the risk of hurricanes are only increasing. Two months ago, another storm knocked out power to nearly a million customers.

In a world where climate change is driving increasing numbers of extreme weather events, the ability of power grids and utilities to cope is increasingly under scrutiny.

Warren Buffett, whose Berkshire Hathaway Energy is one of the nation’s largest owners of utilities, has said the accumulation of liabilities for these companies is killing the business case for investing in the sector.

In Texas, memories are still fresh of the 2021 energy crisis, when a series of winter storms triggered the worst energy infrastructure outage in the state’s history amid frigid weather. Nearly 250 people died.

Today, as Texans’ hunger for electrons grows, the state’s failing power grid is a major obstacle to the state’s rapidly expanding economy. Ercot, Texas’s power grid operator, said in June that demand for electricity could double by the end of the decade because of the rise of artificial intelligence.

The data is concerning: According to Whisker Labs, which monitors power outages and blackouts across the United States, the Houston area’s grid has been the least resilient and unreliable in the country for the past two and a half years.

“During this time period, homes in the Houston area are 2.5 times more likely to experience a power outage than the average American home,” said Bob Marshall, CEO of Whisker.

CenterPoint said it was working “around the clock” to restore power to more than 90% of homes Monday night. It called in more than 12,000 workers, including linemen and tree trimmers, from across the country to help speed restoration efforts.

Lynnae Wilson, CenterPoint’s senior vice president, insisted yesterday that the company had restored power “at a faster pace than we’ve ever achieved during any hurricane in our history, despite the challenging conditions.”

But Beryl won’t be the last hurricane to hit America’s energy capital. Scientists have warned that the number of storms will be particularly high this year, with researchers at the University of Colorado describing Beryl as a “harbinger of a hyperactive season.”

According to forecaster AccuWeather, sea surface temperatures are already at levels typically seen before late August or early September, which could trigger particularly intense hurricanes in the coming months.

“I’m concerned that we could see more Beryls — more storms that intensify rapidly — throughout the season,” said Alex DaSilva, AccuWeather’s senior hurricane expert. “We’re very concerned about a very active season.” (Myles McCormick)

Power Points

Energy Source is written and edited by Jamie Smyth, Myles McCormick, Amanda Chu, Tom Wilson and Malcolm Moore, with support from the FT’s international team of journalists. Contact us at [email protected] and follow us on X at @FTEnergy. Find previous editions of the newsletter here.