Why is Texas the only state with its own power grid?
As winter storm blackouts roiled Texas in early 2021, the Electric Reliability Council of Texas, the nonprofit that operates Texas' electrical grid, gained notoriety — as well as the simple fact that Texas has its own electrical grid.
The country is divided into three grids: one covers the eastern U.S., another the western states and then there is the Texas grid, which covers nearly the entire state.
The reasons Texas controls its own grid, journalist Kate Galbraith observed in a Texplainer piece for the Texas Tribune in 2011, have to do with the same theme that colors so much of Texas' history and public policy: a distrust of federal interference.
The predecessor for ERCOT was formed in the 1930s, after President Franklin D. Roosevelt signed the Federal Power Act, which charged the Federal Power Commission with regulating interstate electricity sales.
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"Utilities in Texas were smart and made an agreement that no one was going to extend power outside of Texas," Donna Nelson, who served as chair of the state Public Utility Commission, which oversees ERCOT, from 2008 to 2017, said in an ERCOT promotional video about the history of the grid.
"By eschewing transmission across state lines, the Texas utilities retained freedom," Richard D. Cudahy wrote in a 1995 article, "The Second Battle of the Alamo: The Midnight Connection.” "This policy of isolation avoided regulation by the newly created Federal Power Commission, whose jurisdiction was limited to utilities operating in interstate commerce."
The result was "an electrical island in the United States," Bill Magness, CEO of ERCOT, said. "That independence has been jealously guarded, I think both by policy makers and the industry."
Even today ERCOT, which was formed in 1970, remains beyond the reach of the Federal Energy Regulatory Commission, which regulates interstate electric transmission.
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The operator has four primary responsibilities:
- Maintain system reliability.
- Facilitate a competitive wholesale market.
- Facilitate a competitive retail market.
- Ensure open access to transmission.
The grid operator manages the flow of electric power to more than 26 million Texas customers — representing about 90 percent of the state’s electric load, according to its website. (El Paso is on another grid, as well as parts of East Texas and the upper Panhandle.) ERCOT schedules power on an electric grid that connects more than 46,500 miles of transmission lines and more than 680 generation units.
At least some members of the 24-member board live outside of Texas, a fact met with outrage in some quarters this week.
"I’m filing legislation this session requiring all @ERCOT_ISO officers and directors to be Texas residents," state Rep. Jeff Leach, R-Plano, wrote on Twitter on Tuesday. "Completely ridiculous and unacceptable that current ERCOT Board Chair lives in Michigan!"