BG Reads | News You Need to Know (February 18, 2021)
[BINGHAM GROUP]
NEW // BG Podcast EP. 129: Discussing Austin's Tech Community with Jason Fernandez, Managing Partner & COO, Quake Capital
Continuing a series of conversations the firm is having around the recent and continued media hype of tech flight to Austin (and Miami), Bingham Group CEO A.J. spoke with his friend Jason Fernandez, Managing Partner & COO, Quake Capital.
Jason is a Miami native who moved and established Austin roots in 2010. He maintains business and personal ties to Miami. The two dig into his impressions on moving to Austin, the tech community here, and also the appeal of his hometown.
You can listen to this episode and previous ones on Spotify, Apple Podcasts, and SoundCloud. Please like, link, comment and subscribe!
CITY OF AUSTIN
Today’s Austin Council Meeting has been cancelled due to the emergency issues facing the city.
THE 87TH TEXAS LEGISLATURE
LINK TO FILED HOUSE BILLS (2,183)
[AUSTIN METRO]
With energy, water recovery slow, Austin leaders look for answers (Austin Monitor)
With the city’s energy and water utility systems vastly over capacity, local leaders are pushing for immediate solutions to improve residents’ safety and looking at how the state can prevent a similar statewide failure in the future.
As of Wednesday night, Austin Energy had restored power to 16 grids that had gone days without power, with utility officials saying rotating outages in circuits without critical infrastructure could take place in the coming days. That uncertainty came with a citywide boil notice issued by Austin Water Utility after power was lost at Ullrich Water Treatment Plant and water pressure dropped below minimum standards.
Temperatures are forecast to dip back below freezing until Saturday, which is expected to put continued strain on utility systems crippled by a historic winter storm that began last weekend.
Mayor Steve Adler said state officials have provided unclear information on why the state power grid wasn’t prepared for the freezing temperatures, ice and snow. Gov. Greg Abbott added reform of the Electric Reliability Council of Texas (ERCOT) as an emergency item for this year’s state Legislature, a move that could fast-track changes to the body in charge of regulating the state’s energy infrastructure.
“Everybody deserves better answers from state leadership as to why this happened as well as how we’ll ensure it doesn’t happen again. Our system was not hardened around the state sufficiently to withstand an extended period of time with a temperature of 18 below freezing,” Adler said. “We hardened the system to be able to withstand hot temperatures with lots of air conditioning and high loads, but the low temperatures we have not hardened ourselves against.”
Abbott’s Wednesday press conference suggested that another 2 million residents out of three million total without power are expected to get service restored in the coming days. There was no new estimate on Wednesday of how many Austin residents are still without power, a factor Adler said exacerbates stress on the city and its populace that is expected to conserve water for at least the next several days.
“On top of Covid we have this once-in-a-generation storm then on top of that we have the power situation and now on top of that we have a developing water challenge,” he said. “Of all of those things it’s mostly the water challenge that is in our control. We can’t let ourselves create another challenge that goes on top of all the others, so everyone has to conserve water.”
The city had opened a rotating set of warming centers around the area to provide some help to impacted residents. Adler encouraged anyone who is able to help to visit the Austin Disaster Relief Network website to find the best opportunities closest to them.
Council Member Leslie Pool, who chairs City Council’s Austin Energy oversight committee, said there will be a special called meeting of that group next week to begin investigating Austin Energy’s role in the power failure and how it was impacted by ERCOT’s instructions early Monday morning to cut power to more than 200,000 customers.
“My goal is to be as honest and clear as possible in my communications and where Austin Energy is at fault I will say, and where they are not at fault I will also say. We are at the mercy of directives we cannot ignore, disobey or otherwise flout. When ERCOT told us to start shedding at 1 a.m. Monday morning we had to shed 100 percent of everything they told us to shed, just like every other community across the state,” she said.
“The statewide grid has been neglected, underfunded and under-resourced for decades, and this calamity rests on the shoulders of the state’s elected leadership and ERCOT. Period, full stop. By next week we will have moved beyond this crisis where power is restored 100 percent and people can start moving on and looking at how it happened, where we can fill the gaps, what resources are needed and what we can do to close them.”
Council Member Paige Ellis echoed the call to conserve water so the Austin Water Department can fix main breaks and fix low pressure that could lead to boil notices.
“What’s important for people to know is that in situations where you end up with low pressure, you need time for the infrastructure to catch and that’s the situation we’re in now,” she said. “The ability of the machinery to produce clean water has been affected … things are getting into a place I don’t know anyone would have predicted even recently. People are rightly in emergency mode; try to make sure they have what they need to keep their family safe.”
The statewide failure and outages drew national attention as well as outrage on social media, including posts that highlighted downtown Austin as mostly illuminated, including high-rise office buildings with lights on throughout.
Adler said the downtown circuits had to stay on to ensure energy service for critical facilities such as the Dell Seton Medical Center, but shared in frustration over the lack of energy conservation by many downtown businesses.
He said talks in recent days with the Austin Chamber, Downtown Austin Alliance and Real Estate Council of Austin were leading to progress to get those buildings darkened with lowered thermostats… (LINK TO STORY)
Citywide boil water notice issued by Austin Water due to power outage, winter weather (Community Impact)
Austin Water has issued a citywide boil water notice after it lost power at the city’s largest water treatment plant.
According to Austin Water, the Ullrich Water Treatment Plant does not currently have power, resulting in a drop in water pressure that pushed the Austin Water system below the minimum standard. As of 8:45 p.m., the city is working to restore power at the treatment plant.
The notice directs residents to boil water collected from pipes and faucets for at least two minutes and then to cool water before using it to drink or cook. Austin Water will update residents when the boil water notice is lifted.
Earlier Wednesday, Austin Water Director Greg Meszaros said that the public utility was unable to meet customer demand as a result of residents dripping faucets, storing water and water main breaks in the region.
Even when power is restored to the Ullrich Water Treatment Plant, Austin Water is asking residents to conserve water by limiting water use to essentials.
“We’re going to need a lot of community help here,” Meszaros said at a Feb. 17 press conference. “We're really in a decision-making mode of trying to restore water to hospitals and for fire protection and other essential services and really need customers to cut back on things like dripping faucets, and managing appliance use like dishwashers and washers if at all possible.”… (LINK TO STORY)
Austin again ranks as a 'best-performing' city (Austin Business Journal)
Austin can continue to tout a high ranking on a prestigious national list.
For the third year in a row, Austin took the No. 3 spot on the Milken Institute's Best-Performing Cities report.
Milken's index ranks cities on a variety of metrics, including jobs, wages, salaries and technology output. It's designed to help the public and private sectors evaluate and compare cities throughout the nation. It is particularly handy for Realtors, job recruiters and site selectors.
Austin was put in the "tier 1" category. It's the first time Milken has broken cities up by tiers.
Milken ranked the top tier 1 cities this way:
1. Provo, Utah
2. Palm Bay, Florida
3. Austin
4. Salt Lake City, Utah
5. Raleigh, North Carolina.
No other Texas cities were in the top 10.
Milken noted the Austin presences of major tech companies such as Apple Inc., Samsung Electronics Co. Ltd., IBM Corp. and Round Rock-based Dell Technologies Inc. The report added:
Despite a tumultuous 2020 globally, the large public sector has helped stabilize the economy. The federal, state, and city governments each employ over 6,000 people, contributing to a 16th place rank in short-term job growth. Housing affordability, however, will continue to be an issue beyond the pandemic, especially with the growth in housing costs in recent years.
California loses steam
Municipalities throughout the San Francisco Bay Area — known lately for sending thousands of new residents to Texas — took a beating in the Milken report.
San Francisco, which took the top spot in last year's breakdown of U.S. cities, fell 23 places. San Jose, which was No. 5 last year, came in at 22. And Oakland dropped 48 spots, going from 17 to 65.
But the biggest declines in the country came from some of the Bay Area's outlying cities. Salinas suffered the largest drop of any U.S. metro area, falling 90 places from 41 to 131. The Santa Cruz-Watsonville metro area went from 52 to 124, a 72-point drop.
"A notable common characteristic of the cities that dropped the most is their proximity to larger 'superstar cities,'" according to the report from the Milken Institute, which is based in Southern California. "Most of these metros also have low levels of high-tech industry concentration and extremely high housing costs. In Oakland’s case, these pressures have displaced many residents and decreased socioeconomic diversity." To download the full report from the Milken Institute, click here… (LINK TO STORY)
Planning Commission recommends rezoning for East Austin townhome project (Austin Monitor)
The Planning Commission last week backed a request to rezone a vacant East Austin tract at 4908 Lott Ave. to allow 62 townhomes – including five income-restricted units.
Michael Whellan, who was representing the applicant, said that because the current zoning only permits “McMansions,” the rezoning “would make it feasible” to provide “missing middle” and affordable housing.
Some neighbors spoke at the Feb. 9 meeting to oppose the project, even though two neighborhood associations, the neighborhood’s contact team and city staffers support it. Commissioners ultimately sided with the latter group, voting 8-0-3 to recommend changing the current Family Residence (SF-3) zoning to denser Townhouse and Condominium (SF-6) zoning.
The neighbors who spoke balked at the number of homes. The resulting traffic, they believed, would make nearby roads – some of which are narrow and lack sidewalks – dangerous.
“We would strongly and vehemently disagree with the number of units overall – period,” said Antony McGregor Dey. “We just think that that’s far too many for the area.”
Whellan said that increased traffic is a trade-off for more affordable homes. “Every single project in the city of Austin,” Whellan said, “increases the number of vehicle trips in the project’s neighborhood – and that’s no different here. The question really, for all of us, is whether we want those projects to be more modestly scaled and more accessible to families, or whether we want to force them to become McMansions.”
An approved subdivision from 2019 under SF-3 zoning offered no income-restricted homes. The plan included mostly larger single-family homes, some with accessory dwellings.
Whellan insisted that even if the exact number of units in the current proposal changes slightly, the number of affordable units will remain the same and will be priced at 80 percent median family income for 99 years.
The neighbors also said they did not receive enough notice about the rezoning from the city or the developer. “It just appeared out of nowhere,” McGregor Dey said of the project.
The neighborhood requested more time for their concerns to be addressed. They were already granted a two-week postponement at the previous Planning Commission meeting, and city staff said that they gave proper notice. Whellan said he had been proactive about reaching out to neighborhood groups and residents.
The neighbors said they may submit a petition opposing the project. “If we are not given any kind of accommodations or respect as a neighborhood,” said David Boyle, “then that’s what we are going to have to do.”
Commissioner Joao Paulo Connolly said he won’t pass up the “chance that we have right now to prevent some large, expensive houses from being built, and to have some affordable ownership units with locked affordability. Especially because it doesn’t seem like, aside from traffic, there are any real major concerns with this project.”… (LINK TO STORY)
[TEXAS]
‘A complete bungle’: Texas’ energy pride goes out with cold (Associated Press)
Anger over Texas’ power grid failing in the face of a record winter freeze mounted Tuesday as millions of residents in the energy capital of the U.S. remained shivering with no assurances that their electricity and heat — out for 36 hours or longer in many homes — would return soon or stay on once it finally does.
“I know people are angry and frustrated,” said Houston Mayor Sylvester Turner, who woke up to more than 1 million people still without power in his city. “So am I.”
In all, between 2 and 3 million customers in Texas still had no power nearly two full days after historic snowfall and single-digit temperatures created a surge in demand for electricity to warm up homes unaccustomed to such extreme lows, buckling the state’s power grid and causing widespread blackouts. More bad weather, including freezing rain, began arriving Tuesday night.
Making matters worse, expectations that the outages would be a shared sacrifice by the state’s 30 million residents quickly gave way to a cold reality, as pockets in some of America’s largest cities, including San Antonio, Dallas and Austin, were left to shoulder the lasting brunt of a catastrophic power failure, and in subfreezing conditions that Texas’ grid operators had known was coming.
The breakdown sparked growing outrage and demands for answers over how Texas — whose Republican leaders as recently as last year taunted California over the Democratic-led state’s rolling blackouts — failed such a massive test of a major point of state pride: energy independence. And it cut through politics, as fuming Texans took to social media to highlight how while their neighborhoods froze in the dark Monday night, downtown skylines glowed despite desperate calls to conserve energy.
“We are very angry. I was checking on my neighbor, she’s angry, too,” said Amber Nichols, whose north Austin home has had no power since early Monday. “We’re all angry because there is no reason to leave entire neighborhoods freezing to death.”
She crunched through ice wearing a parka and galoshes, while her neighbors dug out their driveways from six inches of snow to move their cars.
“This is a complete bungle,” she said.
The toll of the outages was causing increasing worry. Harris County emergency officials reported “several carbon monoxide deaths” in or around Houston and reminded people not to operate cars or gasoline-powered generators indoors. Authorities said three young children and their grandmother, who were believed to be trying to keep warm, also died in a suburban Houston house fire early Tuesday. In Galveston, the medical examiner’s office requested a refrigerated truck to expand body storage, although County Judge Mark Henry said he didn’t know how many deaths there had been related to the weather… (LINK TO STORY)
Cruz says he has ‘no defense’ for mocking California’s past power outages as Texas’ grid falters amid historic freeze (Dallas Morning News)
Confronted with his mocking last year of California over that state’s power outages during a heat wave, Texas Sen. Ted Cruz late on Tuesday said he had “no defense” for his past criticism as Texas’ power grid falters amid a historic winter storm. “I got no defense,” the Republican wrote on Twitter, quoting a news story about others highlighting his jabs at California. “A blizzard strikes Texas & our state shuts down. Not good.” Cruz and other Republican leaders in Texas have come under an intense spotlight during the ongoing power failure, which has left millions of Texans without electricity for hours and even days as the state deals with dangerously cold temperatures and icy conditions.
That scrutiny has come, in part, over some Republicans’ past responses to disasters in other states. Cruz, among others, received criticism for his opposition to certain federal aid to states hit by Hurricane Sandy in 2012. The senator also earned blow-back for the taunts he aimed at California last year, when that state endured power outages amid a severe heat wave. “California is now unable to perform even basic functions of civilization, like having reliable electricity,” the Texan said then, accusing President Joe Biden and other Democrats of wanting to “make CA’s failed energy policy the standard nationwide.” While Cruz often relishes engaging in social media scuffles, he’s declined to do so over the outages. His Twitter feed, like many other Texas politicians’, has focused on weather and energy info in recent days; Cruz, in his “no defense” Tweet, urged Texans to “stay safe” amid the polar blast.
Some Democrats took note of Cruz’s approach. “Not even Ted Cruz will defend Greg Abbott on this catastrophe,” San Antonio Rep. Joaquin Castro wrote on Twitter, referring to the Texas governor, whom many Democrats have blamed for the crisis playing out in the Lone Star State. Another Democrat – Rep. Ruben Gallego of Arizona – said he hoped the ongoing disaster “will teach Texas politicians to stop dunking on other states when they are going through disasters,” adding that “all Americans deserve help and empathy from fellow Americans.”… (LINK TO STORY)
Perry says Texans willing to suffer blackouts to keep feds out of power market (Houston Chronicle)
Former Texas governor Rick Perry suggests that going days without power is a sacrifice Texans should be willing to make if it means keeping federal regulators out of the state’s power grid. In a blog posted on House Minority Leader Kevin McCarthy's website, Perry is quoted responding to the claim that “those watching on the left may see the situation in Texas as an opportunity to expand their top-down, radical proposals.” “Texans would be without electricity for longer than three days to keep the federal government out of their business,” Perry is quoted as saying.
“Try not to let whatever the crisis of the day is take your eye off of having a resilient grid that keeps America safe personally, economically, and strategically.” Texas’s power grid, run by the Electric Reliability Council of Texas, or ERCOT, occupies a unique distinction in the United States in that it does not cross state lines and thus is not under the oversight of the Federal Energy Regulatory Commission.
That has long been a point of pride with Texas politicians who in the 2000s chose to deregulate the state's power market and allow power companies, not state regulators, determine when and how to build and maintain power plants. That system has fallen under scrutiny in recent days as millions of Texans are left without power following an unusual cold snap. Following a near identical episode a decade ago, federal regulators warned Texas it needed to take steps to better insulate its power plants. But there is little indication that happened, prompting criticism of ERCOT from Texas Republicans and Democrats alike. Perry, former president Donald trump's energy secretary, however, blamed the rolling blackouts on the rise of wind and solar energy in Texas. “If wind and solar is where we’re headed, the last 48 hours ought to give everybody a real pause and go wait a minute,” Perry said.
“We need to have a baseload. And the only way you can get a baseload in this country is [with] natural gas, coal, and nuclear.” That argument has been made by numerous conservatives in the midst of the blackouts. But it does not line up with early reports indicating the majority of the lost generation was natural gas plants not wind turbines, which actually performed better than grid regulators had anticipated, said Michael Webber an energy professor at the University of Texas… (LINK TO STORY)
FEMA sending generators, water and blankets to Texas (Houston Chronicle)
The federal government is sending generators, water and blankets to Texas and is preparing to ship in diesel, as well, to help with backup power amid the massive outages that accompanied the recent cold snap, the White House announced on Wednesday. A Federal Emergency Management Agency spokesperson said the agency has sent 60 “very large” generators to the state to help keep hospitals and other crucial infrastructure online. The spokesperson could not say where the generators had been sent. The agency has also sent “millions of liters of water” and “tens of thousands” of blankets, she said.
The federal assistance comes as a winter storm has left millions without power across the state, with officials warning the blackouts could continue for days. White House Press Secretary Jen Psaki said FEMA is also “preparing to move diesel into the state to ensure the continued availability of backup power, which of course is a major issue on the ground to key critical infrastructure, including communications, hospitals and water.”
More assistance may be sent as requested by the state, federal officials said. President Joe Biden declared an emergency in Texas over the weekend and Psaki said the White House remains in close contact with state leaders, including Gov. Greg Abbott. House Speaker Nancy Pelosi on Wednesday issued a statement on the situation in Texas that touted $50 billion in FEMA funding Democrats are pushing in their latest COVID relief package and calling for “smart and urgent investments to reduce blackouts and brownouts.” “All Americans are watching the situation in Texas and throughout the heartlands with great sadness,” Pelosi said. “Together, we must build back better an electric grid that’s cheaper, cleaner and more reliable.”… (LINK TO STORY)
Grocers plan to lobby for priority status in future Texas power outages (Dallas Morning News)
The Texas Retailers Association said Wednesday that it is going to lobby ERCOT and state officials to give grocery stores and their distribution centers some priority status during power outages. The Electric Reliability Council of Texas lists hospitals and fire and police stations as having priority status for electricity during power outages. Airports, water and wastewater plants, and telecommunications operations also have priority status. “We realize that hospitals and fire and police stations have a higher priority during power outages than food stores, but we think we should be right under that,” said Gary Huddleston, grocery industry consultant to the state association.
Stores can’t open without electricity, and extended outages cause spoilage. Some stores have generators that can hook up to diesel tanks or natural gas power lines that will run a couple of checkout stands, some lights and refrigerated and frozen cases. But that equipment is expensive, and the price of a generator big enough to power a supermarket starts at $68,000, according to Generator Source, a Colorado-based seller of industrial backup generators. Besides power, employees have to be able to get to a store, and water is also becoming a big issue around the state. Grocery stores can’t open without a reliable source of water, Huddleston said. “It’s used for hand washing, to wash produce, clean the store, to have functioning restrooms.”
If the power is out and food spoils, that can delay the reopening, and restocking a store is expensive, too. Photos of dumpsters behind a Kroger in Arlington filled with ice cream and other dairy products have been shared thousands of times on social media. Kroger spokeswoman April Martin said the grocer follows food regulations closely, and if something is unsafe to eat, it’s discarded. “We are working around the clock to replenish our stores and will do our best to accommodate our customers,” she said… (LINK TO STORY)