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AUSTIN, TX – JUNE 08: State Rep. Chris Paddie (L) and State Senator Kelly Hancock (R) watch as Texas … More Governor Greg Abbott signs Senate Bills 2 and 3 during a press conference at the Capitol on June 8, 2021 in Austin, Texas. Governor Abbott signed the bills into law to reform the Electric Reliability Council of Texas and weatherize and improve the reliability of the state’s power grid. The bill signing comes months after a disastrous February winter storm that caused widespread power outages and left dozens of Texans dead. (Photo by Montinique Monroe/Getty Images) Getty Images In Texas, electricity generating companies have no incentive to build enough power plants to keep the state online during periods of high demand – think hot August days or a winter freeze. For more than 25 years, the Texas Legislature has done nothing to address this fatal design flaw. The Texas grid managed by the Electric Reliability Council of Texas, ERCOT, is an “electricity only” grid, meaning generators only earn revenue when they are actively feeding electricity to the grid. It also means ERCOT, the only purchaser of electricity in the wholesale market, only buys electricity on a minute-by-minute basis, without regard for the investment that is needed to power the state’s growing economy. Before committing to build a natural gas power plant today, a company has to question what the ERCOT market will look like in the five years or more it will take to build the plant (which just got more expensive due to steel tariffs and a five-year backlog for gas turbines). Wind and solar farms require zero-cost fuel and few employees, so they will continue to displace more expensive coal and natural gas power plants in this minute-by-minute calculus. The obvious problem is that electricity from wind…

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Filed under: News - @ May 11, 2025 11:18 pm