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How the Texas power grid works  

By Tiffany Reynolds

Texas has a unique power grid that is different from other national grids. The Texas power grid is managed by the Electric Reliability Council of Texas (ERCOT). This council oversees the flow of electricity for most of the state. One reason Texas’ power grid is so interesting is because it relies on an abundance of natural resources to supply its energy. Deregulation has also made the Texas power grid one of a kind in the lower 48 states. 

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It’s important to know how the Texas power grid works, especially if you are a Texas resident and want to shop for electricity. But why does Texas have its own power grid? In this article, we will explain the basics of the Texas power grid. We’ll also talk about the different types of national grids and where the power supply comes from. Finally, we’ll discuss the challenges facing the Texas power grid and how Power Wizard’s smart technology can help you save money on your electricity bill. 

What is the Texas power grid?  

The Texas power grid is a system that delivers electricity to consumers. The grid is made up of power plants, transmission lines, substations, and transformers. The power plants generate electricity, which is then sent through the transmission lines to the substations. From there, the electricity is sent to the transformers, which change the voltage so that it can be used by homes and businesses. 

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The grid also distributes electricity to different parts of the state. For example, if a power plant in west Texas generates more electricity than needed in that area, the grid will send the excess electricity to a part of the state that needs it. This helps ensure that everyone has the electricity they need, when they need it. 

Why does Texas have its own electricity grid? 

Texas has its own electricity grid because it is not part of the federal power grid. There is federal oversight of the electric grids in other states, but the federal government does not have the same authority over Texas’ grid. This is because Texas deregulated its electricity market in 1999. Deregulation means the state does not control the prices that utility companies can charge for electricity. Instead, the market sets the prices. 

Deregulation has led to some challenges for the Texas power grid. For example, during a heat wave in 2011, the price of electricity spiked to $3,000 per megawatt-hour. This caused some utilities to go bankrupt and led to blackouts for thousands of people. 

Where does the power supply come from? 

Texas power grid sources have changed over time as the state has moved away from coal and toward renewable sources like wind and solar energy. Texas has various sources for its electricity supply, including oil and natural gas power plants, wind power, solar energy, and coal. 

Oil and natural gas power plants 

Oil and natural gas power producers are the largest sources of electricity in Texas. In 2019, they accounted for about 50% of the state’s electricity generation. Natural gas plants are the most common type of power plants in Texas, accounting for about 31% of the state’s electricity generation in 2019. 

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Wind energy and solar power 

Wind power is the second-largest source of electricity in Texas, accounting for about 20% of the state’s electricity generation in 2021. Solar power is the third-largest source, accounting for about 13%. 

Texas has more installed wind capacity than any other state, with nearly 33,133 megawatts of capacity as of June 2021. The state also ranks first in the nation in solar photovoltaic (PV) capacity, at more than 16,000 megawatts. 

Wind and solar power play an important role in Texas’ electricity mix because they come at a relatively low cost and help diversify the state’s power generation portfolio. Wind and solar resources are also abundant in Texas. The state has some of the best wind resources in the country, and it is one of the sunniest states in the nation. 

Types of electric grids in Texas  

There are three types of electric grids in Texas: the ERCOT, Southwest Power Pool (SPP), and  North American Electric Reliability Corporation (NERC) grids. 

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ERCOT is the electric grid that covers most of Texas. It is operated by a nonprofit corporation created by the Texas legislature in 1970. ERCOT’s portion of the Texas power grid serves more than 26 million customers, representing about 90% of the state’s electric load. 

The SPP grid is an electric grid that covers parts of Texas, Arkansas, Louisiana, Oklahoma, and New Mexico. SPP is a regional transmission organization that coordinates the electric grid for these five states. 

NERC is a nonprofit corporation that oversees the electric grid for the entire U.S. and Canada. The NERC is responsible for ensuring the electric grid is reliable and secure. 

Texas has a diverse mix of electric generation sources, including natural gas, coal, nuclear, wind, and solar energy. ERCOT is responsible for managing the flow of electricity on the electric grid and ensuring that there is enough generation to meet demand. 

Challenges currently facing the Texas electrical grid 

There are several Texas power grid problems. These include rolling blackouts during summer and winter storms and a low energy capacity in times of high power demand. Together, these challenges have put the state’s electric grid under strain. 

Rolling blackouts during winter and summer months 

The electric grid in Texas faces several challenges. One of the most pressing issues is the rolling blackouts that occur during the winter and summer months. These blackouts are due to the extreme weather conditions that Texas experiences.  

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During the winter, Texas can experience extremely cold temperatures. This causes the demand for electricity to increase. The increased demand leads to higher prices and rolling blackouts. To prevent future blackouts, ERCOT has implemented a winter operations plan. The winter operations plan includes measures to reduce the demand for electricity, such as turning off lights and removing electric water heaters from service. 

During the summer, Texas experiences extreme heat. This also causes the demand for electricity to increase. To meet this demand, ERCOT must rely on additional generation resources from around the state. However, during extreme cold snaps like the one Texas experienced in February 2021, generation can become constrained. 

To help maintain system reliability during these conditions, ERCOT may implement controlled, temporary outages, called rolling blackouts. Rolling blackouts are a last resort to protect the electric grid from a total system collapse, which could take much longer to recover from and cause widespread, prolonged power outages. 

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While no one wants a rolling blackout, they are a necessary evil to protect the electric grid and ensure that as many people as possible have power during extreme weather conditions. ERCOT is constantly working to improve the electric grid and minimize the need for rolling blackouts in the future. 

Low energy capacity in times of high energy demand 

The second challenge facing the Texas electrical grid is a low energy capacity in times of high power demand. This can happen when electricity demand is higher than the amount of power available in the market. 

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When this happens, electricity prices can spike and become unaffordable for some consumers. The fact that power plants can take years to build compounds the problem.  

These challenges can be addressed by power companies investing in new power plants, implementing demand management programs, and using additional power-generating units. Each of these solutions has its own benefits and drawbacks, so power companies must carefully consider which options are best for meeting future power demand. 

Navigate all the quality electric providers Texas offers with Power Wizard 

You have the power to choose your electric company in Texas. Power Wizard is an independent shopping tool that helps you find the best electric company for your needs. 

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You can use our online calculator to see current rates in your area and find out how much you could save with Power Wizard. We offer various services to meet your needs, including a do-it-yourself shopping tool, our Enroll Me service, and our Full service. 

Don’t wait; start saving today! Use Power Wizard to find the best electric company for your needs.  


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