Input Stories

Big changes could be coming for the Texas power grid (POLITICO’s E&E News).

What’s going on: Texas Public Utility Commission Chair Thomas Gleeson told attendees at last week’s CERAWeek by S&P Global that “the PUC is preparing to consider specific changes to the market setup—moves that could alter how big users are charged for grid costs.”

• Gleeson said the utility’s top priority right now is figuring out how to handle projected increases in electricity demand.

The backdrop: “Gleeson spoke at CERAWeek as the PUC and the Electric Reliability Council of Texas, or ERCOT, are facing a massive amount of demand from large users such as data centers.”

• ERCOT serves about 90% of electricity demand in Texas.
• The Lone Star State has become a data center mecca and may rival Virginia in coming years.

Why it’s important: “Changes in Texas could influence debates in other U.S. power regions as regulators and grid operators search for ways to make sure sufficient generating capacity and power lines can be built to serve projected demand increases.”

A new system: “ERCOT is expected to announce the first tranche of projects to be studied as part of so-called Batch Zero by September, and those projects would be the first to be able to interconnect to ERCOT under the new rules.”

• But Gleeson’s remarks at CERAWeek suggest larger changes to the electricity grid in the state.

Who pays? At issue is how transmission and distribution costs will be divided among ratepayers, Gleeson said.

• Thanks partly to a large solar and battery buildout in ERCOT’s area, electricity rates there have remained relatively low.
• But rates have been climbing steadily since 2021.
• Texas Gov. Greg Abbott and Lt. Gov. Dan Patrick have tried to bring more natural-gas power plants to Texas, and while their “efforts haven’t driven a surge in new baseload power plants … there are signs of some additional capacity on the way.”