What’s Next for the Texas Power Grid?

The Texas power grid simply can’t catch a break. The system faced blackouts during a record-breaking winter storm last year, ultimately contributing to more than 200 deaths. You’d think Texas officials would have taken decisive action to prevent this situation from ever happening again. 

Sadly, they haven’t. This past Friday, Texas’ grid operator ERCOT asked customers to conserve power after six power plants went down unexpectedly during a heatwave. Those power plants provide 2,900 MW of electricity to the grid, or enough to power nearly 600,000 homes. ERCOT blamed high temperatures for the increase in electricity demand, but did not say why the plants went offline. 

Fortunately, the Texas grid made it through the weekend with no blackouts and five of the six downed power plants came back online. But with temperatures heading toward triple digits several times this week, the threat is not over. ERCOT has urged the public to conserve energy for the rest of the week by setting thermostats above 78 degrees and avoiding using large appliances between 3 PM and 8 PM.

The incident left many Texans wondering just how prepared the grid is for what could be a long and brutal summer. After all, it’s still early in the year and temperatures will continue to rise throughout the summer months. How did Texas get to a point where the state can barely keep its lights on during the spring?

The culprit is the same one we identified in February of 2021: the state’s deregulated electricity market. Texas’s more than two-decade experiment with deregulation has led to higher prices for consumers and has caused Texas to go from having the nation’s largest power reserve margin to one of the lowest. Because of deregulation, the state’s power providers lack real accountability, leaving customers to pay more for less. 

Additionally, while the rest of the U.S. is connected to two major electric grids, Texas has its own independent power grid. This makes it nearly impossible to import electricity from other states in times of short supply. 

Curiously, when ERCOT released its seasonal report showing how prepared the state’s electric grid is for summer, the agency claimed that power providers have enough resources available for the summer months. But that’s only for normal conditions and this is only May. What will happen during summer peak demand if temperatures are already hot enough to push the power grid to the brink?

“This past week has shown us that we shouldn’t always just expect typical weather or average weather,” said Daniel Cohan, professor of environmental engineering at Rice University.

“In a normal summer or in an average summer they’re predicting a bigger cushion, a bigger margin than they have for a couple years. Now the scenarios show we’re not prepared for a real extreme heatwave,” he continued. 

Last fall, the Federal Energy Regulatory Commission recommended that the state hook up to the other U.S. grids or even Mexico in case of shortages, but that hasn’t happened. If a record heatwave hits the state this year, consumers will find themselves in the dark, possibly with no air conditioning. That’s a recipe for disaster.

Whatever the path forward for Texas’s power grid is, it’s clear that the state’s current policies aren’t working. It’s time for Texas officials to seriously consider the role that deregulated markets in the state have played in pushing the grid to failure. A long, hot summer is approaching.