Understanding the Texas Blackouts

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Brett Archibad, whose home was without electric power following winter weather, tries to entertain his family as they try to stay warm in their home the BlackHawk neighborhood in Pflugerville, Texas, February 16, 2021. (Ricardo B. Brazziell/American-Statesman/USA Today Network via Reuters)As the Lone Star State shivers in the dark, it’s worth considering how we got here.

NRPLUS MEMBER ARTICLE A s practically every Texan and much of the rest of the country now knows, Texas’s electrical grid is managed by the comically misnamed Electric Reliability Council of Texas. To the extent that its reliability is the issue, what it is is reliably incompetent. As Texas shivers in the dark, there’s plenty for everybody to hate in this story. But it does present an opportunity to consider three concepts that can shape our public policy for better and for worse.

Hedging Risk

Hedge investments are investments meant to mitigate risk. The original idea behind hedge funds was that they would provide a place for …

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