Texas Energy Grid 101

Near the beginning of World War II, the state of Texas formed the Texas Interconnected System (TIS), making the Texas Interconnection one of three small alternating current (AC) power grids available in North America at the time. The Texas Interconnection itself covered most of the state and helped companies like Aluminum smelting factories along areas of the Gulf Coast generate power. In the later half of the twentieth century, TIS shifted over to what is now known as the Electric Reliability Council of Texas (ERCOT). ERCOT is currently the state’s central operating coordinator for electricity.

There is one major thing that makes ERCOT or the Texas Interconnection different from most other grids in America and that is the fact that isn’t connected or linked to any other grid within the United States. Texas has the ability to provide its own power to its consumers.

Electric Reliability Council of Texas (ERCOT)

ERCOT became an Independent System Operator (ISO) in 1996. An ISO is responsible for running the electricity grid for an area, and for providing reliability planning as well as the area’s wholesale electricity rates. Today, ERCOT is one of North America’s ten ISOs. It provides power to around 24 million Texan customers, using about 85% of the electric power within the state.

There are two entities that have jurisdiction over ERCOT. These two entities are, the Public Utility Commission of Texas and the Texas Legislature. It is also a non-profit, membership based organization. This means that all electric utilities are linked together within the Texas Interconnection and run at 60Hz (on average, and during normal system conditions).

Overall, ERCOT manages over 46,000 circuit miles of high voltage transmission, with more than 550 generating units. During peak times, the they can generate over 77,000 mega watt (MWh) of electricity, where one MWh can provide power to approximately 200 homes. ERCOT also has about 1,400 organizations and entities that deal with Texas Transmission electricity at some point during the consumption, buying, and selling process.

The Effect of Energy Deregulation

In 1999, Texas legislature required the state to deregulate their energy. This meant that the utilities had to give their customers the option to choose their energy supplier. As a result, the market opened up to competition, forcing both the utilities and newly developed or established retail energy suppliers to come up with more competitive electricity rates and plans. While a customer might decide to purchase supply services from a retail energy provider, utilities still provide services for the delivery of electricity.

Due to these energy deregulation laws, ERCOT ended up with several responsibilities that they are required to continue to uphold today:

  • System maintenance and reliability
  • Process for customer choice retail switching
  • Open access to transmission
  • Electricity delivery and production wholesale market settlement

As of August 2015, 91% of residential customers, 92% of small non-residential customers, and 98% of large non-residential customers made retail service switches. Consumers made these retail service switches with over 200 certified retail electricity providers.

The Grid – Texas Transmission

The state of Texas is very interested in managing, maintaining and upgrading the grid in order to continue generating and providing electricity to consumers. In 2015, ERCOT invested in adding $1.1 billion in transmission. This means that they completed 1,903 circuit miles of transmission improvements, planned out 1,514 miles of new transmission, and plan to invest $5.6 billion for the next five years.

Energy Use and Peak Generation Capacity

ERCOT generated a significant amount of electricity for the state of Texas using a variety of different types of energy including,

  • Natural Gas: 167,911,033 MWh (48.3%)
  • Coal: 97,654,710 MWh (28.1%)
  • Nuclear: 39,384,317 MWh (11.3%)
  • Wind: 40,786,278MWh (11.7%)
  • Other: 1,786,611MWh (0.6%)

In terms of electricity generation capacity, the Texas Transmission’s summer capacity includes,

  • Natural Gas: 53%
  • Coal: 22%
  • Nuclear: 6%
  • Wind: 18%
  • Other: 1%

Demand Response

Demand response is an important element to any grid, anywhere in the world. It is the process in which the grid can shift or reduce power during times where there is a peak or decline in electricity consumption. For example, in Texas, summer months typically result in a higher demand for energy due to the extremely hot temperatures that increase the need for consumers to run an air conditioner.

ERCOT handles demand response in several ways, including, operating 6.8 million advanced meters, and monitoring over 2,200 MWh in resources like, 1,153 MWh emergency response services, 880 MWh in utility load management programs, and 220 MWh in a variety of additional response requests.

The Benefits

There are several benefits to having a state that is primarily powered via their own grid. These reasons include,

Stability – One of the main benefits to having a grid that is powered and run by the state is that it removes most of the dependency on other organizations or entities for power. While it is a lot of work to ensure that the electricity in Texas is reliable and constant, the pressure to deliver that energy across boarders or into other states disappears. It makes it much easier to monitor, control and make updates, improvements or upgrades to the system when the delivery is contained to a very specific area or region.

Job Growth – Keeping ERCOT primarily within the state of Texas helps to generate more jobs for the people. While the oil and gas industry already helps to increase the available jobs on the market, the delivery and maintenance of that energy also requires specialists and educated personnel to correctly and safely run the grid.


Another benefit of having a grid that provides and generates electricity to the majority of consumers in the state of Texas is that they can take advantage of wind and solar electricity generation. Keeping up with the latest technologies really helps to generate more power for the grid. This in turn helps to provide more stability, reliability and power to the consumers.

ERCOT has installed nearly 16,000 wind turbines. To date, those turbines have generated 14,023 MWh of energy. When it comes to solar, so far ERCOT can generate about 288 MWh from installed panels.


ERCOT has a Board of Directors that complies with same legislation that all other states are required to follow. This includes approving budget, revisions to protocols and guidelines, capital spending, and developing new transmission projects. The board is made up of 16 people, and must include,

  • 5 unaffiliated members
  • 3 consumer members representing: residential, commercial, and industrial
  • 6 members from each industry sector representing: investor-owned utilities, municipally owned utilities, generators, power marketers, retail electric providers and cooperatives.
  • Current ERCOT CEO
  • Public Utility Commission of Texas Chairman

By selecting board members from a wide variety of industries, ERCOT is able to gain a bigger picture of the kinds of issues or problems that face the industry and consumers at any given time. The benefit here is that the board is then able to focus on the most important topics and projects to ensure that their grid remains stable and useful for everyone.