How Texas And The Rest Of The US Regulate Electricity

By Theodore J. Kury (Director of Energy Studies, University of Florida)

Americans often take electricity for granted—until the lights go out. The recent cold wave and storm in Texas have placed considerable focus on the Electric Reliability Council of Texas, or ERCOT, the nonprofit corporation that manages the flow of electricity to more than 26 million Texans. Together, ERCOT and similar organizations manage about 60% of the US power supply.

From my research on the structure of the US electricity industry, I know that rules set by entities like ERCOT have major effects on Americans’ energy choices. The current power crunch in Texas and other affected states highlights the delicate balancing act that’s involved in providing safe, reliable electricity service at fair, reasonable rates. It also shows how arcane features of energy markets can have big effects at critical moments.

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