Hurricane Beryl exposes Houston’s fragile grid

Hello and welcome back to Energy Source, coming to you from Houston. 

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

Writing then, I said the industrial fallout seemed to have been contained; on the whole, rigs were still pumping and refineries were still cracking. That remains the case — the energy complex seems to have come through largely unscathed. 

For regular Houstonians, however, it is a different story. A week later, roughly a quarter of a million households in the region remain without power. For America’s fourth-largest city — and the self-styled “Energy Capital of the World” — that is something of an embarrassment. 

As recovery efforts drag on and recriminations fly, my dispatch today looks at what it says about the reliability of the grid in America’s energy heartlands. 

I’m keen to hear any reader feedback, especially if you’re in Houston. As Texas steps up its drive to lure companies from the coasts, could a subpar grid impede the state’s world-conquering ambitions? If you have any thoughts, please get in touch at myles.mccormick@ft.com.

As ever, thanks for reading. — Myles

Beryl exposes a fragile grid in the US energy capital

It has been more than a week since Houston was pummelled by Hurricane Beryl. But for many residents still without power — and air conditioning — the fallout is still very present.  

Across America’s fourth-largest city, frustrations are running high. 

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

“This is a city that is commonly in hurricane path . . . and we’ve seen some really big ones. But this was not a major hurricane. This was a category one. And to have a million people out of power for over a week? It’s a complete lack of preparation.”

There were almost a quarter of a million customers, or households, still without power last night, according to poweroutage.us, which analysts said likely equated to more than a million people as a heatwave has pushed temperatures close to 100F (37C). 

While that is down from 2.7mn customers last Monday night, the pace of the recovery amid baking heat has been too slow for many. CenterPoint, the city’s main utility, has come in for particular criticism.

“The failure of power companies to provide power to their customers is completely unacceptable,” said Texas Governor Greg Abbott at a press conference on Sunday. “CenterPoint appeared to be caught off guard by the arrival of Hurricane Beryl in Houston.” 

As the dust settles, awkward questions are being raised about the resiliency of the grid in America’s energy epicentre, where power demand and the risk of hurricanes is only set to rise. Two months ago, another storm left almost a million customers without power.

In a world where climate change is driving a growing number of extreme weather events, the ability of electric grids and utilities to cope is increasingly coming under the microscope.

Warren Buffett, whose Berkshire Hathaway Energy is one of the biggest utility owners in the country, has said the liabilities racking up for such companies is killing the business case for investment in the sector.

In Texas, memories are still fresh of the 2021 power crisis when a volley of winter storms triggered the worst energy infrastructure failure in the state’s history amid freezing temperatures. Almost 250 people died.

Today, as Texans’ thirst for electrons increases, the creaking grid poses a major hurdle for the state’s rapidly expanding economy. Ercot, the Texas grid operator, said in June that electricity demand could double by the end of the decade amid the rise of artificial intelligence.

The data is concerning: according to Whisker Labs, which monitors faults and power outages across the US, the grid in the Houston area has been the country’s least resilient and reliable for the past two and a half years. 

“Over that time, Houston area homes are 2.5 [times] more likely to experience a power outage than the average US home,” said Bob Marshall, Whisker chief executive. 

CenterPoint said it was working “around-the-clock” to get customers back online and that it had restored power to more than 90 per cent of households by late Monday night. It has brought in more than 12,000 labourers, including linemen and tree trimmers, from around the country to speed the recovery effort.

Lynnae Wilson, CenterPoint senior vice-president yesterday insisted the company had restored power “at a stronger pace than we have been able to in any hurricane in our history, despite the difficult conditions”.

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

Ocean surface temperatures are already at levels usually not seen until late August or early September, according to forecaster AccuWeather, which could trigger especially intense hurricanes in the months ahead.

“I’m worried that we could see more Beryls — more storms that rapidly intensify — throughout the season,” said Alex DaSilva, lead hurricane expert at AccuWeather. “We are 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 global team of reporters. Reach us at energy.source@ft.com and follow us on X at @FTEnergy. Catch up on past editions of the newsletter here.