A Guide to the Texas Electricity Market, Power Outages and How To Avoid Repeating History

When it comes to electricity, Texas is fascinating. Not only does it produce and consume more electricity than any other state, but it is also the only one with its own stand-alone power grid – the Texas Interconnection.

Yet, on February 14, 2021, the grid in the Lone Star State buckled under the historic snowstorm and left more than 4.3 million homes and businesses without power. How’s that possible? More importantly, how can it be prevented from ever happening again?

Interactive Texas Winter Storm Infographic

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What Happened in Texas?

The Lone Star State has mild winters with temperatures only rarely dropping below zero. However, this year’s historic artic snap has seen the temperatures in parts of Texas hit 0F (-18C) – effectively freezing off the pipes, valves, wells, and turbines that produce the state’s electricity.

According to ERCOT, 46,000 megawatts (approximately half of total generation) were shaven off the system. Below you can see a visual representation of a dataset, supplied by the U.S. Energy Information Administration (EIA) of Texas electricity demand forecast and actual net generation during the month of February.

Climbing demand, coupled with a sharp fall in generation capacity on February 15th (the beginning of the blackouts), resulted in a massive loss of power (the gap between the blue and the orange lines), leaving millions of Texans without electricity, water, and heat for days.

Power outage tracker

Can Texas Power Outages Be Prevented In The Future?

As the devastating events in Texas approach the end, the blame game is well underway with several possible culprits – the isolated energy grid, an aging infrastructure, and even an opinion circulating on social media that the Texas renewable wind-power generation is to blame. However, this has already been disproved by various fact-checkers, including Reuters.

Texans rely on natural gas for more than half of their electricity supply and it was precisely failures across Texas’ natural gas system that caused the majority of current outages.

Rather than assigning blame, we should be asking ourselves how to avoid similar events in the future.  When temperatures fall sharply, Texas’ energy demand rises more quickly than in some other states because the homes and buildings are not built for freezing temperatures –  on Sunday, 21st of March, the electricity demand hit 69,150 megawatts, a double of what ERCOT, considers an “extreme generator outage” scenario.

Better weatherization of both electricity generation and transmission infrastructure, as well as Texas homes and buildings, would help to reduce the likelihood of future outages. Weatherization measures include burying pipelines deeper in the group for insulation, equipping wind turbines with heaters, and connecting to other regions’ power systems to draw backup power. These measures are expensive and are kind of like insurance – there is only a small chance that you will use them, but in an emergency, you are really glad that it’s there.

Texas’ crisis also raises important questions about changing climate. Scientists agree that the frequency of extreme weather events, such as heatwaves, droughts, wildfires, rain, and coastal flooding will continue increasing, putting pressure on the electric grid. We must start taking climate change seriously and demand from our policymakers, regulators, grid operators, and other decision-making institutions to do the same.

Texas Cities Affected by Power Outages

 That Texas grid, operated by the Electric Reliability Council of Texas, covers approximately 90% of the state. The other 10%, consisting of El Paso, the upper Panhandle and a chunk of East Texas get their electricity from other grid providers, meaning that these areas were able to draw on the backup power and avoid power outages.

The cities most affected most by the February loss of power include:

  • Houston
  • Dallas
  • San Antonio
  • Austin
  • Fort Worth

Texas Electric Providers Affected By Power Outages

Texas has an advanced energy-deregulated market, with more than 70 retail energy providers (REPs) offering customers fixed-rate plans and competitive pricing.

However, due to the record-breaking energy demand caused by the severe weather, several Texas REPs have paused the enrolment of new customers in electricity plans until further notice. The power supplier Griddy encouraged customers on the website to switch to other suppliers immediately, to avoid astronomical bills. Other REPs with disruption to enrolment include:

Texas Utilities

The state of Texas has 5 major utilities that provide transmission and delivery services to customers throughout the state:

  1. TNMP
  2. Oncor Electric Delivery
  3. AEP Central
  4. AEP North
  5. Centerpoint Energy

These utilities are in charge of delivering power to your home and maintaining the lines and wires. They are obliged to make sure everything is in order and take care of any problems that might arise with the equipment.

Why Do Outages Happen?

Severe weather is by far the most common cause of power outages, costing the United States economy $33 billion annually.

Apart from the weather, other major causes of local outages are car accidents, when a car runs into an electricity pole or when an animal climbs onto the equipment. The final (and the most uncommon) reason is electricity supply shortages – which is exactly what happened in California last year.

How Often Outages Affect Your City?

Do you live in a state that gets a lot of outages? Let’s look at the number of power outages per state over the past seven years and how long on average did it take to restore power.

U.S. State201520162017201820192020TotalAvg Time to Restore Power (hours)
District of Columbia1120:57
New Hampshire11138:31
New Jersey324281911:47
New Mexico22152:47
New York4651514176122:46
North Carolina74115113819:01
North Carolina118:30
North Dakota67130:55
South Carolina4313421711:05
South Dakota2240:01
West Virginia1111482:16

Does Texas Have Its Own Power Grid?

The continental U.S. has three power grids: The Eastern and the Western Interconnection spanning both sides of the Rocky Mountains (‘The Rockies’) and the Texas Interconnection. While the two former ones are divided for practical reasons (it’s pretty hard to run transmission lines through the mountains), Texas separated its power grid to keep the state’s energy system independent from federal oversight and isolated from other markets.

The Texas grid is operated by the Electric Reliability Council of Texas (ERCOT) and is largely dependent on its own resources. This creates a problem in rare, but devastating weather events, such as storms or extreme cold snaps. When power plants fail, the isolated grid cannot draw backup power from its network and is forced instead to shut down – just like what happened in Texas on February 15th.

Is Texas energy independence to blame for the outages? It’s not as black and white as it may seem. There are sensible reasons for Texas’ isolation from the rest of the nation – avoiding federal oversight, more control, and ironically, faster response to power failures.

Moreover, extreme weather conditions like those experienced in February are very rare in the Lone Star State, and weatherizing the energy network for rare, once-in-a-decade events might not have been considered necessary before. However, now the lawmakers and regulators should probably look to enforce a greater “reserve margin” of extra power on the grid at all times, no matter how low the likelihood that we will need it.

Texas Electricity Market Key Facts

When we say that 46,000 megawatts were shaven off the Texas grid during the outages, it’s good to be able to put it in perspective – that’s enough electricity to power 9.2 million homes. Texas is that big – not only when it comes to land size and population, but also when it comes to energy generation and consumption. Here are some key facts about the electricity in the Lone Star State:

  • Texas generates 11% of total U.S. electricity and consumes approximately 10% of it.
  • Despite having abundant non-renewable sources, Texas also leads the nation in a wind-powered generation – 28% of total U.S. capacity.
  • 85% of Texas territory is electricity-deregulated and according to the Public Utility Commission of Texas (PUCT), 92% of consumers have changed providers at least once.

How Does Texas Generate Electricity?

Texas produces more electricity than any other state, almost twice as much as Florida which comes second. Where does it come from? Natural gas leads by far as the chief state resource, producing more than half of total Texas electricity. What about the other sources? 

Texas Electricity Generation by Fuel

Texas power outage San Antonio

In recent years, Texas has seen rapid growth in wind electricity. In 2015, wind power generation supplied 11% of Texas’ energy grid while in 2020, the number climbed to 23% – more than double. 

The interest in renewable electricity is substantial in the Lone Star State – wind and solar capacity have fast been replacing the dirtier fuels, such as coal – since 2016, 5,000 megawatts of Texas coal-fired generating capacity have been retired.

What about solar? The warm climate and abundance of direct sunlight give Texas some of the greatest solar power potential in the nation. However, solar generation accounts for only about 2% of Texas electricity.

Renewable vs. Non-renewable Electricity in Texas

Because of its size and natural resources, Texas has got a tremendous potential to generate renewable power. The state has twice surpassed its sustainability goals and it now generates 28% of the total U.S. wind power and is the country’s sixth-largest producer of solar power.

In 2008, the Public Utility Commission of Texas (PUCT) approved the construction of a massive transmission line highway, known as the Competitive Renewable Energy Zone (CREZ), to carry West Texas wind to cities throughout the state. 

These lines continue to be a key part of the Texas renewable energy success story – adding additional 18 gigawatts of wind energy generation capacity and helping to transport renewable electricity from scarcely populated Western Texas to the rest of the state.

How Does Texas Consume Electricity?

Texas not only produces but also consumes more electricity than any other U.S. state, consuming nearly one hundred times as much energy as Vermont and nearly 13 percent of the total energy consumed in the U.S. How is the consumption broken down?

Electricity Consumption Per Capita

Interestingly, when we look at the per capita usage, Texas ranks sixth in the country with 498 million Btu consumed per capita annually. However, residential consumption per capita places Texas within the lowest one-fifth of U.S. states.

RankStateTotal Energy Consumed per Capita, million BtuRankStateTotal Energy Consumed per Capita, million Btu
3North Dakota87228Delaware301
8West Virginia46233Georgia274
9South Dakota45234Colorado266
11Indiana42436New Jersey252
12Montana41037North Carolina252
15Kentucky39141New Hampshire240
19New Mexico33645Connecticut211
21South Carolina32947Hawaii206
24Idaho31650New York197
25Illinois31551Rhode Island187

How do Texans manage to keep their residential electricity use low? A study by the American Council for an Energy-Efficient Economy (ACEEE), Texas is a leader in energy-efficiency programs, setting ambitious efficiency targets each year, yielding Texans millions of dollars in savings.

Electricity Consumption Per Sector

Nearly half of Texas electricity is consumed by the industrial sector, thanks to the state’s heavy reliance on energy-intensive petroleum refining and chemical manufacturing industries. Transportation is the second-largest end-user, in part because of the large number of registered motor vehicles in Texas and the great distances across the state, that Texas drivers must cover. Residential and Commercial usage accounts for only 13% and 12% respectively.

Power outage in Houston right now


Where does Texas get its electricity?

Texas is not only the U.S. biggest consumer but also the biggest producer of electricity. Most of the generation comes from natural gas, producing more than half of total Texas electricity. In recent years, Texas has seen rapid growth in wind electricity. In 2015, wind power generation supplied 11% of Texas’ energy grid while in 2020, the number climbed to 23% – more than double.  Coal and nuclear generation add approximately 16 % and 8% respectively.

How does my state produce electricity?

The energy mix in each U.S. state is as unique and diverse as the individual states themselves and depends on multiple factors, including the availability of natural resources in the state. For example, 26% of the coal produced in the United States came from the Appalachian coal region, including Wyoming, West Virginia, Pennsylvania, Kentucky, and Illinois. On the other hand, warm sunny states, such as California, Nevada, or Hawaii have higher portions of solar-generated electricity. Check out our interactive map of energy sources in each U.S. state.

Were renewables responsible for Texas power outages?

You might have heard an opinion in some media coverage that renewable generation is to blame for the rolling power outages happening in Texas right now. However, it has already been disproved by various fact-checkers, including Reuters. Record cold temperatures (uncommon for Texas even during the winter months) affected the generation and transportation of electricity across all fuel types (renewable and non-renewable). Frozen pipes, valves, wells, combined with the inability to draw backup power from elsewhere (thanks to the isolated grid) resulted in power outages affecting millions of Texas.

What Is the Difference Between Renewable and Non-renewable Energy Sources?

The difference between renewable and non-renewable sources lies in the limits of their supply. Non-renewable energy comes from resources, such as coal, petroleum, natural gas, propane, and uranium that are not replenished on a regular basis as their supply on this earth is limited. Renewable energy comes from sources that replenish naturally day after day, such as sun, wind, or water. They are also considered to be greener than fossil fuels because producing them does not emit harmful CO2 gases.

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