Will we have to buy our electricity from the U.S. after TEXIT?

The short answer is an emphatic “NO”. Here’s what you need to know.

Texas both produces and consumes more electricity than any other state. Texas’ abundant natural resources, including natural gas, coal and wind, are readily available to fuel our power plants.

Texas is the only one of the contiguous 48 states with its own stand-alone electricity grid, one of the three main grids in the U.S.: the Eastern Interconnection, Western Interconnection and Texas Interconnection. The Texas Interconnection, which covers 213 of the 254 Texas counties, is managed by the Electric Reliability Council of Texas, or ERCOT. Portions of Texas near the state’s borders are covered by the eastern and western grids.

As the independent system operator for the Texas grid, ERCOT connects more than 46,500 miles of transmission lines and more than 650 power generation facilities, providing electricity to more than 26 million customers.

ERCOT’s primary responsibilities include maintaining power reliability, ensuring open access to transmission lines and facilitating competitive electricity markets. It’s overseen by the Texas Public Utility Commission, which also enforces compliance with the state’s utility laws and regulates Texas’ electric utility rates.

In Texas, several types of entities are involved in providing electricity to end users. The current structure dates from 1999, when the Texas Legislature introduced retail competition in much of ERCOT’s service area. According to ERCOT, about 75 percent of its total power load represents customers in these “competitive” areas.

In competitive areas, power generators produce electricity from fuel and sell it on the wholesale market, where it’s purchased by private companies called investor-owned utilities or retail electricity providers (REPs). Texas has about 300 REPs; customers can choose among them based on pricing and various options such as an emphasis on renewable power. Electricity purchased from REPs is distributed to homes, businesses and other facilities by transmission and distribution utilities, which own the actual poles, power lines and meters.

Texans living in areas outside the ERCOT grid or in areas served by municipally-owned utilities (such as Austin Energy), electricity co-ops, and river authorities rely on a single service provider. According to the Legislative Budget Board, as of September 2019, six of Texas’ 20 largest cities maintained their own utilities, the largest being San Antonio.

Texas produces more electricity than it consumes and maintains a buffer referred to as the “state’s reserve margin”. This margin ensures that we never have to suffer from rolling blackouts like California.

Post-TEXIT, Texas will need to transition any non-ERCOT portions of the grid to ERCOT. While the state’s reserve buffer could handle it, Texas will still need to increase its power generation capabilities to ensure that we have the widest margin possible between production and consumption.

The good news is that Texas is already expanding electrical production capacity as we speak to accommodate the growth in population and the greater needs of a high-tech society.

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