ERCOT Power Grid Overhaul: What to Expect

Mar 31, 2023 | Industry Happenings

What to Expect from the ERCOT Power Grid Overhaul

Remember back in February 2021 when the extreme cold weather left millions of Texas residents without electricity for days and exposed the vulnerabilities of Texas’ electricity grid? Who could forget? Well, in order to make sure such an event never happens again,  the Public Utility Commission of Texas approved a proposed market overhaul on January 19, 2023 to reform Texas’ electricity market. Here, we’ll look at the proposed changes and how it could affect electricity customers in the Lone Star State.


ERCOT’s Proposed Overhaul 

State regulators have proposed an overhaul of Texas’ power market aimed at improving the reliability and resilience of the electricity grid following the February 2021 power crisis. The Texas Public Utility Commission puts forward the market overhaul, and includes a range of measures, such as new requirements for weatherization, backup power supplies, reserve margins, and changes to how power is priced and sold in the market to improve the grid’s reliability and resilience.


PUC Chair Arthur D’Andrea says the changes would help address many of the issues that led to the February 2021 power crisis and provide a more reliable and resilient grid for Texans.


One of the critical components of the proposed power market overhaul is a new system of “performance credit,” which would be awarded to power plants that meet certain reliability and resilience standards. These credits would then be tradable in the market, incentivizing generators to invest in facility upgrades and improvements.


Could the Overhaul Affect Energy Prices?

The proposed changes have been met with mixed reactions from stakeholders, with some experts believing that the changes could lead to higher prices in the short term. Others argue that the increased investment in reliability and resilience could ultimately lead to lower prices over the long term by reducing the risk of blackouts and other disruptions and finally ensuring reliable and affordable power to Texans now and in the future.


What Roles Does Renewable Energy Play?

The proposed overhaul encourages the development of new renewable energy projects, including solar and wind power. ERCOT’s plan includes measures to reduce market barriers and encourage participation from renewable energy providers to increase the share of renewable energy in the state’s electricity mix.


Where is the Overhaul at Now?

Right now, the proposed overhaul is just that —  a proposal. Before implementation, it must be approved by the Texas Legislature and other governing bodies. Public input is yet to come, and that could also further change the proposed updates. So it remains to be seen how the proposed changes will be implemented and their full impact. However, it’s clear that Texas is taking action to prevent power crises and ensure that the grid can meet its needs.


Energy Texas Has Your Back

Listen y’all, at Energy Texas we know that you’re countin’ on us to keep the lights on and your bills affordable — no matter what changes happen in the power market. That’s why we’re committed to havin’ your back through any ups or downs, and we’ll always put your needs first.


If any changes do come our way, we’ll deliver the straight scoop on what it means for you and your electricity service and provide the resources and support where it’s needed. You can get a head start by brushing up on your energy knowledge with our blogs like how to read your electricity bill and electricity facts label. You can bet your boots that we’re gonna do whatever it takes to keep the juice flowin’. So don’t worry, Energy Texas has you covered!

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