Paper short abstract:

This paper examines recent extreme winter weather events in the US that have heightened scrutiny of deregulated electric utilities built around futures markets. Blackouts and surging fuel prices in storms have been linked to such systems’ high dependence on natural gas fuel.

Paper long abstract:

Deregulated electricity in the United States was driven by a 1990s free market lobby that joined forces with conservative politicians, proponents of deregulated natural gas and some environmental organizations. Despite promises of lower rates and sustainable power, both goals became sidetracked in reformed utilities by the rise of shale gas, which emerged as the fuel of choice for new US generation plants. Recently, reliance of large deregulated systems on gas fuel has been shown to be a major cause of two grid failures – the Texas “Freeze” of February 2021 and Winter Storm Elliot which hit the mid-Atlantic region in December 2022. I will draw on research on both storms to discuss new evidence on the ways that deregulated systems heighten both economic and social risks during high demand periods, as well as emerging evidence from investigations of these storms on gas price manipulation and other vulnerabilities of gas plants and their fuel supply systems in cold weather. I will discuss consumer advocacy and the politics of reform and oversight. The findings have serious implications for many countries given the widespread adoption of components of deregulated electricity globally and the current export juggernaut that has boosted reliance on Liquified Natural Gas (LNG) for electricity since the Russian invasion of Ukraine.