Texas could connect to national power grids without losing autonomy, former grid regulator says

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Texas could connect its decentralized electrical grid to the rest of the country’s system without losing autonomy and without action from the state legislature, according to Pat Wood, who previously served as the top official for both the state’s and the nation’s energy regulators.

Wood, now CEO of the Hunt Energy Network, said during a Texas Tribune panel discussion about changes to the state’s power grid that long-held fears of additional federal oversight have dissuaded Texas from fully connecting to the national power networks, which would allow the state to buy and sell energy with the rest of the country.

Texas relies on a separate power grid from the two larger national grids and is in most respects not subject to federal regulation. The state can draw a very limited amount of power from out-of-state sources.

However, Wood said the Federal Energy Regulatory Commission has policies that would protect Texas’ grid from federal interference if it were to connect more robustly to the two national grids.

“We have the ability to build gates to the outside and not become vassals of another king,” Wood said. “We [would still be] in charge of our own grid — and that was built into the federal law.”

Wood was the chair of the Texas Public Utility Commission from 1995 to 2001 before becoming the FERC chair for four years. He said the PUC could authorize connecting the state grid to the national system without the Texas Legislature having to pass a law first.

According to an analysis by the American Council on Renewable Energy, each additional gigawatt of transmission capacity connecting the Texas power grid with neighboring states could have saved nearly $1 billion and prevented blackouts in around 200,000 Texas homes during Winter Storm Uri last year.

However, PUC officials say the state’s grid is stronger than ever and that there’s no need to connect the grids.

“There are no plans to change the status of the grid,” PUC spokesperson Rich Parsons said in a statement.

During another Texas Tribune event, Tribune CEO Evan Smith asked PUC chair Peter Lake about the benefits of connecting the grids.

“Wouldn’t there be an opportunity for us when anybody else has problems to make money off of that and then to hedge against problems ourselves by getting power from other people, which would only be possible if we were connected?” Smith asked.

“Sure,” Lake responded, “but the bottom line is we're focused on reliability in Texas first.”

Lake said the improvements that Texas implemented to its grid during last year’s legislative sessions would not have been as quickly adopted or scalable if it had been working with the federal grid. He suggested that connecting Texas to the national system would sacrifice nimbleness.

“I cannot conceive of a world where Congress and our federal partners could have identified the problems, implemented reforms and built those reforms to the grid to make sure that by this time a year later, we had to finish with more power,” he said.

He also said that there were smaller blackouts that could have affected the electricity surplus in other states.

“They didn't have a whole lot of extra power to hand out,” Lake said.

“More importantly, having our own grid allows Texas to adjust course quickly when something goes wrong,” he added. “We adore working with our federal partners, but Texas can move fast and do it right when something goes wrong.”

Wood’s assertion that Texas would maintain autonomy over its grid if it connected to the national network contrasts with other comments from state officials who have suggested the opposite, including former Texas Gov. Rick Perry.

Perry, who presided over the early days of energy deregulation in Texas, suggested in a blog post published on the tail end of last year’s winter storm on the website of U.S. House Minority Leader Kevin McCarthy that the state’s denizens would prefer a prolonged blackout over federal regulators requiring changes to the system.

“Texans would be without electricity for longer than three days to keep the federal government out of their business,” said Perry, referencing the storm that left millions without power and during which at least 246 people died throughout the state. “Try not to let whatever the crisis of the day is take your eye off of having a resilient grid that keeps America safe personally, economically, and strategically.”

Joshua Rhodes, a researcher at the University of Texas at Austin, said during the Tribune’s panel discussion that Texas would likely benefit from connecting to the larger U.S. grid because it would mostly be in a position to sell energy to other states.

“Electricity is the only source of energy we don't sell to anyone else,” he said. “I think it could be good for us if we did and then we might have some of those backup connections whenever we got into a rough spot ourselves.”

Texas is the largest producer of energy in the country and selling electricity would allow it to pay for additional improvements to the stability of the state’s grid, Rhodes said.

Disclosure: University of Texas at Austin has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.