There is a 1-in-6 chance of a grid emergency if a major winter storm strikes Texas this year, according to ERCOT's own predictions.
Those uncomfortably high odds are a result of a number of factors, including booming population growth coupled with a relatively stagnant energy supply. Meanwhile, a system implemented by ERCOT last summer could mean sticker shock for Texans paying electrical bills this winter.
After 2021's Winter Storm Uri, which caused rolling blackouts throughout the state, state lawmakers passed legislation requiring power plants to weatherize their facilities.
"There are unique challenges that each weather season in Texas presents for the grid," said Pablo Vegas, ERCOT President and CEO. "The winter preparedness efforts made by market participants, reinforced by ERCOT weatherization inspections, continue to strengthen the reliability and resiliency of the ERCOT grid."
The majority of the issues that Winter Storm Uri presented for the grid had to do with the impact of freezing temperatures on facilities and equipment that were not weatherized, reducing the supply of energy available, so from that standpoint, Texas is likely better equipped than it was in 2021 to face a similar freeze.
"I think we're in better shape than we were going into 2021, at least in terms of the physical operation of power plants," said Ed Hirs, economist and energy fellow at the University of Houston.
However, having enough capacity to meet increased demand may pose problems this time around. Over 1 million people have moved to the Lone Star State between 2021 and 2024, including over 470,000 in 2023 alone, according to data from the U.S. Census Bureau. Meanwhile, power capacity has not kept up.
"Demand on the ERCOT grid has grown significantly over the last 3 years, and the natural gas and coal and nuclear power plants have not grown," said Hirs. "That fleet actually has diminished in size."
ERCOT attempted to bring more capacity into the grid in October, when it asked operators to reactivate older, retired power plants. The agency was seeking 3,000 megawatts of increased capacity but walked back its plan in November, when a meager 11.1 total megawatts were made available.
"The owners of these plants have not kept them in such a way that they could essentially flip them on in the space of a few weeks, so that was an unrealistic request," Hirs said.
He added that power generators stand to profit more from keeping supply scant moving into the winter months, as it makes it more likely that increased demand will drive prices up to the $5,000-per-megawatt-hour cap.
Texas has grown increasingly reliant on wind and solar energy to close the gap between demand and supply. Winter weather, however, poses challenges since wind and solar plants are more vulnerable to damage from frozen precipitation.
Meanwhile, last June, ERCOT instituted what it calls the "Contingency Reserve Service," which created power reserves that could come online quickly in order to stabilize the grid in times of high demand, such as during last summer's unrelenting heat wave. However, it did so by simply removing electricity generation from the grid that would have ordinarily been in the regular market and setting it aside, in case of emergency.
By sidelining a portion of available grid capacity, ERCOT decreased the supply available to consumers while demand continued to grow, driving prices up by an estimated $8 billion dollars over the course of the summer, according to ERCOT's Independent Market Monitor. By the end of 2023, it estimated Texan consumers had been overcharged by a total of $12.5 billion since mid-June.
That system will remain in place this winter.
"They have said that they're not going to change the ERCOT Contingency Reserve Service, that they don't want to change the rules of the game mid-game," Hirs said.
Even if consumers do not see a spike this winter, Hirs said they are likely to see higher rates when they renew their electricity contracts.
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