Texas’ recent large-scale disaster at the hands of Winter Storm Uri stirred up a good deal of curiosity about the state’s future.
Will Texas ever rejoin the national grid?
Today, the issue of tying into the national grid is a divisive subject. For some, it runs contrary to the very essence of Texas’ independent spirit and means more federal regulations, less competitive pricing, and a sacrifice of values. To proponents of the idea, it would mean greater reliability in the event of future catastrophic weather events, more advancements in future national environmental initiatives, and other advantages.
For many, the idea of at least being able to draw on outside power more reliably — the state has just five bridges to external power sources, three of which are to Mexico — would mean that future disasters like the one that took place in February 2021 could be avoided. The event led to increased skepticism around the Electric Reliability Council of Texas (ERCOT), which directly oversees nearly all of the state’s electric load.
It wasn’t just the outages that raised the specter of unification. During the crisis, Texas electric companies’ energy rates skyrocketed to preposterous levels, with some customers receiving electric bills for tens of thousands of dollars for a week’s worth of electricity.
It turns out that Texas electricity rates were vulnerable to such a disturbance thanks to the presence of an electricity providers who passed wholesale electricity rates directly on to customers, which despite providing cheap electricity during times of low demand, could not prevent astronomical price hikes during the winter storm when demand soared and supply wilted. This provider is no longer in business in the Texas market.
Proponents argue that the future of the U.S. power grid is one of complete interconnection, in which an end-to-end grid powered largely by green energy provides power wherever it is needed. By remaining isolated, these proponents argue that Texas will continue to impede such progress.
To those opposed to joining the national grid, it comes down to money and independence. Texas electricity providers operate on a grid that does not, at least in the eyes of the law, cross state borders. That makes it exempt from the Federal Power Act’s regulations, which exercises oversight over energy that crosses state lines. This could mean higher electricity rates and greater regulatory pressure on Texas electricity providers.
Opponents also argue that there isn’t compelling evidence that being connected to the larger grid could have prevented the blackouts, as other areas were experiencing the same problem.
However, several days with no electricity, heat, or in many cases, potable water has left a deep imprint on many Texans. With the coming $2 trillion infrastructure bill, it will be interesting to see what position Texas takes for the future.
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