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Texas Power Outage May Dim Houston’s Bright Economic Future
March 15, 2021

Texas Power Outage May Dim Houston’s Bright Economic Future

by The CE Shop Team

Companies Don’t Want to Be Left in the Dark

In early February 2021, an unprecedented winter storm blanketed Texas with snow and ice. Temperatures plummeted, and demand for electricity skyrocketed, causing a strain on an inadequate power infrastructure that left millions of Texans without heat and electricity. As a result, pipes froze, causing leaks and flooding. Meanwhile, others looking to protect their pipes allowed their faucets to drip. That subsequently led to a potable water shortage in cities like Houston which advised citizens to boil water for safety. Eventually, the storm moved on and power returned for most Texans, but this episode has some business leaders weary for the economic future of Texas. No business wants to be left in the dark.

This Isn’t the First Time Texas Went Cold

In 1989, Texas experienced a winter storm that sent the state into a wave of rolling blackouts. Then in 2011, only a decade ago, Texas experienced a similar winter storm that sent temperatures well into the single-digit range. That storm left millions without power as well.

Why These Storms Could Hurt Future Business


In an article published by Fortune Magazine, Mark Duggan, director of the Stanford Institute for Economic Policy Research said, “If I’m a company thinking about moving [to Texas], I don’t care just about the conditions now but five to 10 years from now”.

He raises a valid point. With more than 60 years’ worth of scientific climate observation in the books, it’s widely recognized that extreme weather events are only going to become more frequent and more intense with time. Some estimate 2021’s blackouts caused an estimated $200 billion worth of damage — more than Hurricanes Harvey and Ike. Obviously, it varies from company to company, but a week in the dark could spell disaster for tech companies that rely heavily on electricity to operate.

“It’s a black eye for Texas,” Tom Fullerton, professor of economics and finance at the University of Texas at El Paso also told Fortune. “Businesses could legitimately look at this and raise it as an issue.”

Real Estate Still Remains Bright

As we’ve written about previously in our blog “Hurricanes’ Surprising Impact on Houston Housing”, whenever there’s a cataclysmic event, real estate prices generally go up. That’s because fewer people decide to move following the event, therefore restricting the supply all while demand stays relatively the same or increases. Of course, this impact is short term.

If companies fearing faulty infrastructure decide to move operations elsewhere, that could negatively affect both the commercial and residential real estate scenes in Houston. However, there’s no evidence of things slowing down yet. Houston home values have grown 8.4% since last year alone.

Improving the Grid Can Be Done

With an expected population of 50 million people by 2050, the increasing adoption of electric vehicles, and the effects of climate change, it’s clear that the state has to do something about its power crisis to protect its people, property, and prospective businesses from physical and economic harm.

It can be done, too. After the 2011 storm, the city of El Paso spent $4.5 million winterizing its grid and building up its power-generating facilities. As a result, the city suffered few outages and credits the improvements made to its system for being able to better weather the 2021 storm. If El Paso can do it, then Houston — the energy capital of the world — can certainly do it.

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