Deregulation Is Not The Central Culprit For Texas’ Electricity Crisis


The $1 billion class-action lawsuit filed against the Texas wholesale electricity retailer Griddy Energy is triggering questions about who is to blame for the state’s mid-winter blackout. The core question, though, is whether restructuring Texas’ electricity markets in the early 2000’s exacerbated the crisis. To learn more, read Deregulation Is Not The Central Culprit For Texas’ Electricity Crisis.” Reading this article may require a subscription from the news outlet.

Key Takeaways:

  •  Since 2002, consumers could choose their retail electric provider, which purchases its power from competing generators. Millions of Texas’ customers chose competitive suppliers. Others opted for the regulated rate.
  • The Wall Street Journal reported that customers in Texas who selected the competitive plans paid 13% more than the national average between 2004 and 2019. Customers choosing the regulated plan, conversely, paid 8% less during that same time frame.
  • Customers choosing competitive suppliers will in theory make their homes more energy-efficient and use demand response signals to reduce their bills. In the case of the Texas blackouts, however, the price spikes lasted for days and prompted the $9,000 per megawatt-hour regulatory limit.
  •  As renewables start to make up a greater share of the electricity portfolio, greater attention will need to be paid to improving energy efficiency and decentralizing electricity production and delivery systems.
  • Greater resiliency will also need to be built into the power grid, given the intermittent nature of wind and solar, including weatherizing every form of energy generation and delivery so that whole supply chains don’t freeze up.

Path to 100% Perspective:

There must be adequate, dispatchable power for unusual weather events, especially as global reliance on renewables continues to grow. The ideal power system of the future will maintain reliability while continuing to make a decarbonized future a reality by utilizing curtailed solar and wind power to produce future fuels such as green hydrogen, ammonia or carbon-neutral methane to power on-demand power generation. As the energy transition continues, power plants must be able to balance and respond to the grid to produce power during periods when the renewable generation does not match the load – during the winter and unusual weather conditions such as heat waves.


Photo by Marii Siia on Unsplash