The Ad Hoc Gist: Why Can’t California or Texas Keep the Lights On?

The Ad Hoc Gist: Why Can’t California or Texas Keep the Lights On?

March 2021

Welcome back to the Ad Hoc Gist!

Since our last edition, we have a new President, millions of Americans have received COVID-19 vaccines, and the lights literally went out in Texas for days in the middle of an arctic freeze. But the Lone Star State is hardly alone in struggling to keep the power on.

In this quarter’s Gist, we focus on the flawed approaches of our country’s two largest states - Texas and California. We review why each has failed to keep the power on and what changes are needed -- in policy and attitude -- to ensure this doesn’t happen again. Last year saw 22 separate weather-related events that each caused more than $1 billion in damages, the most on record in any given year in the U.S. And extreme weather is only going to get, well, more extreme.

In AHG news, our team has grown. We’re very excited to welcome Brian Kooiman, formerly of OhmConnect, as well as new regulatory advisors Michel Florio (CA), Kevin Gunn (MO), and Brien Sheahan (IL), and early stage investor Avra Durack, formerly of National Grid Partners. We’re also hiring a summer marketing intern: apply here.

Have feedback on the Gist or an idea for our next one? Drop me a line at And if you know someone who might also be interested in this content, please forward this email to them (they can also sign up right here).


March 24, 2021


How California and Texas Both Got Grid Regulation Wrong

Go to Texas regulators and use California as an example of anything, and you’ll get a deep eye-roll. Talk to Californians about the Texas open electricity market and get reminded of what Enron “did” to California in the early 2000’s. For all the philosophical differences, in the last 8 months, both states have suffered crippling power outages with profound human and economic consequences.

But it’s not just the weather that’s extreme; it’s the regulation in both states that have left each vulnerable. We now know that Texas under-regulated power providers by not ensuring that their natural gas plants and wind turbines were weatherized for winter, that Texas’s deep independence streak has kept its electricity market largely disconnected - literally - from its neighbors; and that the “wild wild west” nature of the Texas market has left a lot of customers with $5,000 to $10,000 electric bills.

We also know that California’s over-regulation of demand response sources meant that a large potential release valve could not be fully pulled when neighboring states stopped exporting power due to their own record demand for air-conditioning. Instead, California repeatedly asked companies and residents to “pretty please” use less power, hardly a market-based solution.

Here are a few must-need changes in both states:

Open up markets to distributed resources that can flexibly manage demand:

Invest in efficient forms of electric heat and update efficiency standards:

Protect customers from exorbitant bills and pay them to curtail:

4 Big Policy Decisions to Watch:

  1. California’s impending Final Order in its Emergency Reliability proceeding comes out on ~March 25th.
  2. The Texas legislative session will rage until May 31st and will reshape the future of the market; follow Doug Lewin’s twitter feed for the play by play.
  3. FERC announced on 3/14 that it would both allow demand response to fully participate in distributed aggregations and launch a Notice of Inquiry (NOI) that could further transform the demand response market.
  4. The Biden Administration Infrastructure package could include provisions to spur more investment in climate tech, including distributed resources.

News from Our Network

From our clients:

Dandelion Energy closed their Series B round with $30 million in funding led by Breakthrough Energy Ventures, more evidence that the geothermal revolution is coming.

Singularity was selected for Urban-X’s ninth cohort to build out its Carbonara platform, which provides real-time carbon data. See their charts on the Texas power crisis here.

Radiator Labs is hiring for Finance, Sales Development and other positions to help decarbonize large steam-heated multifamily buildings (there are 50k+ in NYC alone!).

Copper Labs, which recently closed $2 million in funding led by NG Partners, is hiring a VP of Sales.

Aquifys water monitoring system found a significant leak in Elk Grove Village, IL, saving tax-payers a bundle. With millions of Texans recently under ‘boil-water notices’, water-infrastructure risk is a huge problem.


From our friends and colleagues: 

The Clean Fight New York, an accelerator supported by NYSERDA, is hosting a Buildings Summit on April 8. Come meet their inaugural cohort that are poised to decarbonize buildings in NYC and beyond.

BlocPower closed their Series A round with $63 million in funding and announced the launch of a Climate Impact Note to crowdfund projects. Check out CEO Donnel Baird’s interview on the Energy Gang!

Arcadia announced the acquisition of Texas-based Real Simple Energy to deliver cheaper clean energy to customers.

Climate50 released its list of 2020 top investors in the sustainable energy transition. Lots of friends in here!

Reasons for Hope, Reasons for Despair

Hope: Excited to see so many fantastic friends and colleagues head from cleantech land and beyond joining the Biden Administration, kudos to: Melanie Nakagawa, Phil Giudice, Dan Feldman, Varun Sivaram, Elliot Diringer, Josh Sawislak…and counting!

Despair: Wood Mackenzie’s decision to shut down Greentech Media whose coverage of the clean energy sector is critical to the transition to a low carbon economy. Read Jeff St. John’s farewell note here.