Texas Lawmaker Seeks to Improve Texas’ Power Capacity by Joining Regional Grid and Agreeing to Federal Oversight

Electrical grids are vulnerable to climate change, which amplifies intense heat and drought in the summer and intensifies storms in the winter. Nowhere is the problem more pronounced than in Texas, as recent history has shown.

Texas has the added challenge of running its own power grid that doesn’t cross state lines and connect extensively to neighboring regional grids—by design, thus enabling the state to evade regulation by the Federal Energy Regulatory Commission.

So it’s been hard for Texas in times of extreme heat or intense storms to come up with the power it needs at times of peak demand when, in the age of climate change, having adequate, reliable power can prevent people from freezing or sweltering to death in their homes.

“Broadening your interconnection reduces your risks and increases your reliability,” said Dennis Wamsted, an energy analyst at the Institute for Energy Economics and Financial Analysis, a nonprofit energy policy research group, who noted the need for building interregional transmission lines. The lines are expensive to build, he said, but interconnection could lower energy costs once the transmission lines are built. 

Now, freshman U.S. Rep. Greg Casar, a former a labor organizer, Austin City Council standout and rising progressive star in Texas, has introduced legislation that would establish power connections across state borders that he said would prevent climate-related blackouts as well as aid the transition to clean energy and cut electricity bills.

He also wants $11 billion from a federal Department of Energy program to support companies that take on the slow, expensive task of building the interregional transmission lines. 

The “Connect the Grid Act” is an answer, he said, to a deadly winter storm in 2021 that left households and businesses across the state dark for days. Winter Storm Uri was blamed for 246 deaths related to rolling blackouts in the fast-growing state.

“Millions of Texans needlessly lost power. Hundreds of people needlessly died. And we’re stepping up today to finally do something about it,” Casar said at a press conference Feb. 21 in Austin. 

In a statement, the Electric Reliability Council of Texas (ERCOT) said it is considering the impact of regional interconnection but warned the capacity build-out could have a “chilling effect” on encouraging in-state energy growth. “Developers could view an increased import capability from potentially less expensive markets as a significant disincentive to build new generation facilities in Texas,” according to the ERCOT statement.

Electrical grids are vulnerable to climate change. The 2021 storm was caused by unusual arctic warming that pushed frigid air—known as a polar vortex—deep into the south. Freezing weather caused low energy output across the board—mostly from frozen natural gas plants—and ERCOT initiated rolling blackouts to prevent a larger grid failure.

In extreme heat, transmission lines become less efficient and power plants are at increased risk of breaking down or having to reduce their output, said Romany Webb, deputy director of the Sabin Center for Climate Change Law at Columbia University.

“Climate change impacts are intensifying,” Webb said, and increased frequency of extreme heat and storms “could lead to widespread and potentially very long lasting outages, with devastating consequences for humans and the economy.”

Isolated by Design

Most of Texas is on a grid operated by ERCOT, and its system does not cross state lines. ERCOT has four direct-current power line connections that allow it to import or export relatively small amounts of power—at most about 1.2 gigawatts—from neighboring states and from Mexico. This arrangement was deliberate: the ERCOT grid evades regulation by the Federal Energy Regulatory Commission in its current form, and it allows the Texas state government to have control over operations. 

Casar’s bill would require ERCOT to enhance its ability to share or receive power across state lines on a regular basis. According to the bill, ERCOT would have to be ready to exchange a minimum of 4.3 gigawatts of power with the Southwest Power Pool (SPP) to the north, 2.6 gigawatts with the Western Interconnect through New Mexico and 2.5 gigawatts with the Midcontinent Independent System Operator (MISO) grid that connects through Louisiana. One gigawatt is estimated to be able to power 750,000 homes. 

The bill also seeks $11 billion in federal funds help build the new lines. The funds would flow through a DOE program providing loans to power companies for construction. The program also makes the federal government a “anchor customer” in the energy market that effectively guarantees the companies will have contracts to sell power across the lines for up to 40 years.  

The act would also initiate a study on the viabiity of adding connections to Mexico’s electrical grid.

Casar said the revamped ERCOT system would be liable to FERC oversight and federal monitoring of electricity rates. 

Opponents of the bill say the present system saves money. Connecting to other regional grids will be expensive, they contend, and having to comply with FERC regulations could be costly and slow down the permitting process for adding new energy resources to the grid. Texas is also shielded from any disruptions throughout the rest of the nation because of its isolated system, the supporters of the isolated grid say. 

But if something goes wrong on the ERCOT grid most of Texas cannot call on its neighbors for help. 

During the 2021 storm, parts of Texas that are not connected to the ERCOT system but shared power with other states, such as El Paso in the West and Beaumont in the East, did not lose power. Casar said that experience showed ERCOT grid was more vulnerable to extreme weather than neighboring systems.

The challenges faced by grid operators in Texas are not unique, however, and some experts  question Casar’s rationale. During the storm, the SPP grid that serves the Great Plains and MISO grid that covers Louisiana and the Midwest also experienced emergency conditions. Both avoided widespread outages but the grids did not have excess power to share with Texas, said Ed Hirs, an energy economist at the University of Houston.

“Simply hooking up to other grids does not in any way shape or form provide assurance that Texas can keep the lights on,” Hirs said, calling Casar’s proposal “magical thinking.” 

‘Broadening Your Interconnection’ or Building Power Plants

The Texas government has tried to encourage building new natural gas power plants. The Public Utility Commission of Texas, which provides government oversight of ERCOT, restructured market incentives to be more favorable to natural gas development. In 2023, voters approved an initiative from the state legislature to provide companies with about $10 billion in low-interest loans to repair and construct power plants. Following passage of the loan program, only one new natural gas plant has been announced.

Daniel Cohan, an associate professor of civil and environmental engineering at Rice University, said Texas needs plants that can quickly generate more power during periods of high energy demand — sometimes called peaking plants — but he also sees new connections between ERCOT and neighboring electrical grids as potentially lowering reliance on new gas powered plants.

“The advantage of transmission lines—over just building new peaking plants—is that transmission lines move power both ways and are likely to get far more use than a peaking plant,” Cohan said.

Texas, a petroleum rich state, leads the nation in renewable energy, with new wind and solar power construction playing a critical role in meeting energy demand.

Adding electrical transmission lines would help Texas’ record-setting solar and wind energy sectors. Energy from those sources has gone to waste because the grid is congested. There  are not enough transmission lines from rural areas with numerous wind and solar installations to population centers where the energy is needed. 

“Pricing in Texas is scarcity based,” said Wamsted, the energy analyst at the Institute for Energy Economics and Financial Analysis. Anytime electricity supply barely keeps up with demand—a heatwave or winter freeze, for example—consumers end up paying a much higher price, so being able to import more power would “keep a lid on those price increases.”

The Connect the Grid Act calls for the interconnections between ERCOT and other grids to be operational by 2035. For now, experts said increasing energy efficiency, adding energy resources and offering customers cash incentives to lower usage during key hours will help keep the lights on.

“It’s not a silver bullet,” Cohan of Rice University said about interconnection, but it is “one piece of the patchwork of measures that are needed to keep the lights on and also make our grid cleaner and more affordable and more resilient.”