Down power lines are shown in the aftermath of a severe thunderstorm Friday, May 17, 2024, in ... [+]
NOTE: This story has been updated as of May 21st, 2024 following ERCOT’s reaction to this article with new information.
With seven people killed and close to a million losing power, the recent storms hit Texas hard. Restoring electricity may take days and may not be completed by Wednesday.
The isolation of the Texas power grid has become a symbol of the state’s independent streak and resistance to federal oversight in recent years. The massive outages during Winter Storm Uri in 2021 were a wake-up call to the vulnerabilities of Texas’ system. However, crises in Summer 2022 and Winter 2023 were still severe. Now it seems Texas now confronts another avoidable crisis, with record high temperatures approaching and the Electric Reliability Council of Texas warning that these conditions may squeeze reserve margins.
ERCOT data shows a sharp projected increase in summer peak load
The isolation of the Texas power grid began in 1935 when Congress passed the Public Utility Holding Company Act, which targeted energy monopolies to bring down consumer costs as power companies isolated themselves from other states to avoid federal regulation and maintain monopolies, enabled by state size and abundant natural resources. ERCOT was later formed in 1970 to manage the state’s electric grid and the wholesale energy market. Today, ERCOT is regulated by the Public Utility Commission of Texas and is responsible for meeting about 90% of the state’s energy demands.
The flaws of ERCOT were put on full display in February 2021 when a perfect storm of disastrous conditions emerged: just as the cold caused energy demands to spike, natural gas production and power plants were buckling, knocked out by weather conditions that energy providers and weather forecasting services had underestimated. ERCOT reported that demand peaked at 69,000 megawatts, far exceeding any planned worst-case scenario. As a result, over 4.5 million homes lost power, and at least 200 people died from conditions caused by the storm. On September 6th, 2023, ERCOT issued an Energy Emergency Alert but did not order rolling outages.
An iced over pedestrian walkway is lined by trees that are covered in ice from a few days of sleet ... [+]
The Texas grid remains isolated from the two national electricity networks. The Eastern Interconnection and the Western Interconnection cover the rest of the U.S., and stronger links to these two power-sharing networks might have provided more sufficient safeguards and backup energy sources as the cold swept across the state. In reaction to this article, ERCOT quoted its response to the proposed Connect the Grid Act, stating “When looking at proposals to add additional connections from ERCOT to neighboring grids, many factors need to be considered including transmission costs, reliability and economic impacts, and market-design implications.”
The city of El Paso demonstrates the protection provided by power-sharing — it is part of the Western Interconnection rather than ERCOT’s network, enabling the city to weather the freeze much better than either Houston or Dallas.
ERCOT's grid is isolated from the large-scale interconnections in the East and the West
An isolated grid also creates persistent problems even when no foul weather impacts the state. Spot wholesale electricity prices in Texas are $175 per megawatt-hour for August, up from $90.18 in August 2023. Price increases of this magnitude are not consistent across the United States. California’s spot electricity prices for August are trading for $80 per mwh, 30% below last year’s average. By allowing these issues to persist, average Texans will continue to bear the brunt of growing costs.
U.S. Representative Greg Casar (D-Austin) recently filed the “Connect the Grid Act,” which would require ERCOT to become interconnected with neighboring power networks and subject the agency to Federal Energy Regulatory Commission oversight. However, significant Republican opposition on the grounds that the measure would bring Texas’ state-managed grid into a federal system struggling with its own issues signals that it is highly unlikely to pass, meaning interconnection is still a long time coming.
Still, there is a silver lining. The power grid successfully weathered another cold flash this January, thanks to a sharp uptick in battery construction and a surge in solar and wind power, which allowed Texas to diversify and decentralize its energy production to meet increasing demand.
ERCOT data shows a sharp increase in battery capacity since Winter Storm Uri.
Quin Buckley and Saranna Zhang contributed to the production of this article.
