Regulation of Electric Power in Texas

Politicians, pundits, and the public at large have voiced deep concern that electricity was tragically unavailable to many Texans during the recent period of extreme cold. Claims that lax ERCOT planning caused the problem are exaggerated. “Grid independence” from federal regulation is manageable. The problem lies in the supervisory structure that regulates the Electricity Reliability Council of Texas (ERCOT) - Texas’ Public Utility Commission (PUC), a three-member panel appointed by the state legislature, and our elected officials, ultimate guardians of the public interest.

To start, claims that ERCOT’s planning process is undisciplined are misleading. Published documents (December 2020, January 2021) evidence well-structured scenario planning of capacity, demand, and reserve margin, including grid requirements and fuel types. True, evolving events brought conditions not premised in these studies but laxness is an unwarranted criticism.

The next layer of electric power management: Oversight of ERCOT by the PUC. Here, critical commentary by knowledgeable observers is valid. To begin with, independent management of Texas’ power grid – that is, independent of the Federal Energy Regulatory Commission (FERC) – rests on reasonable logic, not merely the fabled secessionist tendencies of Texans.

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Jim Crump is an energy and chemical industry leader with a depth of industry experience gained with Shell, Accenture Consulting, DuPont, and ExxonMobil, who focuses on energy transition and sustainability.