Texas
Cheap Natural Gas Means Lower Electricity Prices Except In Texas
Why ERCOT’s Power is the Most Expensive in the U.S
In 2023, Texans paid more for wholesale electricity and suffered more calls for conservation than residents served by any other grid across the nation.
And there’s no reason to expect that to change anytime soon.
ERCOT charged Texas consumers the highest electricity prices in the nation for 2023.
The great irony for the energy capital of the world is that the low price of natural gas drove down electricity prices everywhere but Texas, the nation’s largest natural gas producer. Texas also has more utility scale renewable electricity generation than any other state. The low and zero fuel prices cannot overcome the flawed market design used by ERCOT, the Electric Reliability Council of Texas. The market design handicaps the capital investment required to produce inexpensive and reliable electricity supplies.
We predicted this outcome more than a decade ago.
Let’s review. For eight of the 10 years prior to ERCOT’s failure in 2021, the average wholesale price received by generators was less than the cost of building and operating new generating plants—natural gas turbine units to be specific. Unable to recover their costs, investors refused to build new power plants and, in fact, cut back on maintaining existing coal and natural gas power plants, many of which had already been written off. During 2023, ERCOT frequently reported more unplanned outages for its generator portfolio than PJM, a much larger grid that serves all or part of 13 states and the District of Columbia.
At 1:38 a.m. February 15, 2021, the ERCOT grid suffered a cascading series of failures attributed to a lack of weatherization of key components of the electricity supply chain. Unprotected power plants froze. Natural gas deliveries dropped off. Coal piles froze. A pump for the cooling reservoir of a nuclear power plant froze and tripped off the reactor. ERCOT and the local utilities that distribute electricity failed to manage a process of rolling blackouts that could have preserved grid stability.
Facing a demand call of more than 70,000 megawatts, ERCOT came up 52,000 megawatts short at the low point of the debacle. Extended blackouts across a customer base of 26 million people caused 246 deaths and cost the state more than $100 billion in property losses and economic losses. Hundreds of lawsuits for wrongful deaths and economic losses are pending.
What Has Texas Done Since The 2021 Freeze?
The first bills out of the Texas Legislature following the storm consolidated governance of the ERCOT grid under the governor and required that the electricity supply chain, including natural gas providers, improve weatherization. In August 2021, the Public Utility Commission of Texas quickly adopted recommendations made 10 years earlier by the North American Electric Reliability Corporation following the 2011 ERCOT grid failure.
In the summer of 2021, the newly appointed PUCT chair stated that the ERCOT market design needed to be totally scrapped. He resigned from the post in 2023 following the Legislature’s rejection of his proposed solution.
Texas continues to embrace its electricity-only market design under which power plants only make revenue when they are generating electricity. Think about paying firefighters only when they at a fire—and they have to buy their own hoses, ladders and firetrucks. And because there are almost 1 million more Texans today than in 2021, demand has grown but ERCOT’s tweaks to the market have only increased prices without increasing reliability or investment in new power plants.
In 2023, the Texas government created the ECRS or ERCOT Contingency Reserve Service. Under this rules regime, existing power plants are paid to step out of the daily market to create “reserve capacity” where none existed before. Texas government missed the fact that because ERCOT was already short capacity for peak demand days the plan did not actually create any new supply. In fact, the ECRS created an artificial shortage, leading to the mirage of more peak demand days for the market during 2023. ERCOT’s Independent Market Monitor has attributed $12.5 billion in overcharges to this new market regime.
Implementing ECRS transfers wealth from consumers to the power plants—including renewable plants. It is worse than a tax because there is no quid pro quo, no requirement that the power plant operators build new supply capacity.
ERCOT’s portfolio of electricity supplies is not static. The nation’s largest portfolio of utility scale wind and solar farms continues to expand rapidly. This means legacy coal and natural gas power plants will be used less often and will not have any revenues on those days they are not generating electricity into the market. More of these plants will retire and take the electricity they could provide permanently out of the equation.
In 2021, the Texas government refused offers by Warren Buffet’s Berkshire Hathaway
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In one potentially positive development, Pattern Energy is attempting to complete its Southern Spirit transmission project, which will bring up to 3,000 megawatts of cheap electricity to Texas from the federally regulated grids in Georgia, Alabama, and Mississippi via a high voltage DC powerline. Certainly, there is no irony for the Texas Legislature that less regulated power markets can provide less expensive electricity to Texas—or provide a $2.6 billion capital project, hundreds of jobs, and an expanded tax base for those states.
Paying More For Less
Renewables have bolstered the grid, but they will not immediately save Texans money.
The day when renewable resources can replace all coal and natural gas power plants is in the distant future. Think about it. Assume, for simplicity’s sake, 100% efficiencies and capacities. One 1,000 megawatt natural gas generator can be replaced by two solar farms of the same capacity (12-hour days) and three, 4-hour battery packs. Announced solar farms and utility scale battery projects will cost more than $1 billion per 1,000 megawatts of capacity, but at $1 billion each, it will take more than $5 billion to replace $1 billion.
This renewables growth requires a costly buildout of transmission lines to move the power to urban consumers from the rural areas where wind and solar farms are situated. Transmission companies are guaranteed a rate of return on their assets whether or not they are in use. Because renewables rarely operate at 100% of nameplate capacity, to transition the grid to 100% renewables will require a relative overbuild of transmission line capacity that will also offset the zero cost of fuel enjoyed by renewables. Consumers are already seeing this component of their bills rise.
Counterintuitively, and wrongly, Texas has embraced expanding electricity demand without making sure there is enough supply capacity in ERCOT. Cryptocurrency miners have been the primary beneficiaries. They arbitrage the ERCOT market by purchasing electricity at prices below what any other consumer pays, receiving massive payments or credits from the ERCOT market when they sell that electricity back to the grid in times of tight market conditions. For example, low price purchase contracts at 2.5-cents per kilowatt hour and credits of $5 per kilowatt hour. Texas cryptominers already consume more electricity than the City of Austin on a daily basis. By adding more cryptominers to the grid, ERCOT guarantees that each one will make money playing the electricity arbitrage game—at the expense of the everyday Texas consumer. ERCOT’s Independent Market Monitor has pointed out that increased cost to consumers.
The local utilities that distribute electricity in Texas are increasing their rates to consumers, also. These are the regulated monopolies in each service area that distribute electricity to consumers. In Houston, for example, CenterPoint Energy
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The fourth segment of the ERCOT electricity supply chain is the retail electricity provider or REP. These companies are the middlemen between the generators, transmission operators, and local distribution companies. The REPs do not have any skin in the game. In the best of times, they match consumers’ preferences for time of day electricity usage, green or cheap electricity by trading with generators and commodities markets for fixed price contracts or futures contracts. Due to the increasing price volatility in the ERCOT market—again, illustrated by the chart above—these REPs are finding it more expensive to lock in fixed price contracts for their customers. This is a cost they pass along.
Unscrupulous REPs are often caught short as they take their customers’ monies and can’t back up their fixed rate promises. Why should they? They can walk away without consequence leaving the consumer to be thrust into the Provider of Last Resort power marketer bucket at ERCOT at higher rates. The Texas Legislature mandated bailouts of these REPs following 2021, and consumers will be paying down these billions of dollars for the next many years.
There are major profits to be had in the Texas market, and no one should be surprised. Since Enron first gamed the California electricity market in 2000-2001, we have taught that game to students.
Texas continues to miss opportunities to “fix” the grid. The governor, PUCT, and ERCOT now routinely warn residents that rolling blackouts are in the toolkit for tight market conditions, just as rolling blackouts are used in Turkey, Pakistan, and Venezuela.
Texas electricity consumers are also voters in this single state electricity market. They are enraged by their rising bills. The magical thinking that Texas could get more for less is over and should have been over long ago. The Wall Street Journal pointed out in 2021 that Texans had been overcharged $28 billion due to the ERCOT market design. Add in hundreds of deaths and billions of dollars more in overcharges and economic losses. Without positive action, ERCOT Weather Roulette will continue for years to come with volatile and higher prices, and more frequent calls for conservation. In other words, ERCOT and all its failures are a repudiation of the so-called benefits of deregulation and the Texas model of electricity.
Texas
Political fighting pervades Texas politicians’ responses to Austin shooting
Texas elected officials and candidates’ response to the deadly shooting in downtown Austin on Sunday quickly turned political, as Republicans sharply criticized the country’s naturalization process and Democrats called for stricter gun reform laws.
Republicans’ rebukes of the immigration system came after media outlets identified the gunman, whom police killed within a minute of arriving at the scene, as a naturalized citizen from Senegal. The Department of Homeland Security said the man entered the United States on a tourist visa in 2000, became a lawful permanent resident by marrying a U.S. citizen in 2006 and was naturalized in 2013.
Shortly before 2 a.m. Sunday, the gunman killed two people and injured 14 others at a bar that sits among several popular nightlife venues on West 6th Street.
Many Texas Republicans, including Gov. Greg Abbott, suggested the gunman wasn’t properly backgrounded before he was granted U.S. citizenship, but did not provide details of what should have prevented his naturalization. When asked about his criminal history, DHS only said the man was arrested in Texas in 2022, after he was a citizen, for “collision with vehicle damage,” a misdemeanor crime typically given when someone leaves the scene of a wreck.
The New York Post reported that gunman, 53-year-old Ndiaga Diagne, was arrested for “illegal vending” in New York City in 2001. Citing unnamed sources, The Post said he was arrested in New York three other times between 2008 and 2016, but those cases are sealed. The Post did not report on whether he was convicted of any crimes.
At least one GOP candidate for attorney general has called for an audit into immigrants who are in the country legally.
“Audit all ‘legal’ immigrants’ papers and deport as many as possible,” Aaron Reitz said on X.
Reitz and others also voiced their opposition to Islam, which has become a key campaign pillar for some Texas Republicans competing in Tuesday’s GOP primary. The gunman wore a sweatshirt emblazoned with the words “Property of Allah” and a shirt with a design of the Iranian flag, according to the Associated Press. The shooting happened after the United States and Israel bombed Iran.
Austin police did not disclose a motive for the shooting, but the FBI is investigating it as a potential act of terrorism, the Associated Press reported late Sunday.
The Texas chapter of the Council on American-Islamic Relations, an American Muslim civil rights group, condemned the attack in a statement Sunday and rejected any efforts to blame the whole community based on one individual’s action.
“We encourage elected officials, law enforcement, faith leaders, and community members to come together to support the families of the victims and reaffirm our shared commitment to public safety,” the organization’s statement said.
Abbott and state Rep. James Talarico, an Austin Democrat running for U.S. Senate, quarreled on X about the shooting. Abbott said that “allowing unvetted immigrants who are hostile to America, who are loyal to our adversaries like Iran, must end. This was an act of terror, James.”
“The way to end it is to end the current open immigration policies,” he continued. “You and your immigration policies would make America less safe.”
Talarico responded to Abbott by saying “dangerous people should not be allowed into the country. Dangerous people should not be allowed to get guns. Texans understand this — you apparently don’t.”
Austin Police Association President Michael Bullock criticized Talarico on X for politicizing the incident.
“With all due respect sir – now is not the time. All of the information has not come out. How can policy be made on incomplete information?” he said. “The action that needed to happen did – officers heroically ended the violence.”
“This applies to all candidates and elected officials regardless of party,” he continued. ”Now is the time to focus on the victims and first responders impacted, not campaigns.”
U.S. Rep. Chip Roy, who is also running for the GOP nomination to be state attorney general, posted alleged details about the gunman’s immigration to America and naturalization. He said the gunman was granted legal residency during George W. Bush’s administration, “amid GOP celebration of the joys of ‘melting pot’ legal immigration.”
“This is why we are losing our country, our immigration system is a joke, and should PAUSE ALL immigration,” Roy said.
Naturalization is the legal process of becoming a citizen after meeting certain requirements.
Denise Gilman, director of the Immigration Clinic at the University of Texas at Austin, said there has long been extensive vetting in the naturalization process, including criminal background checks. She also said immigrants can’t immediately become citizens without first going through prior steps, such as becoming a lawful permanent resident, that require scrutiny.
“Naturalization is just the last step of many steps that all require vetting,” she said.
Immigrants are eligible for naturalization if they are 18 years old or older and have been green card holders for at least five years (three years if they are married to a U.S. citizen). They also have to take tests proving they’re able to speak, read and write in English. As of last fall, the Trump administration added more requirements, such as a more rigorous civics test, and having to prove to an immigration officer that they are “a person of good moral character.”
When asked about Diagne’s reported arrests, Gilman said generally arrests can be considered when evaluating moral character or discretion but will not automatically bar green card status or naturalization. Certain convictions, however, may result in actual bars.
“It really depends on the nature of the crimes involved,” she said.
Around 818,500 people were naturalized in the fiscal year of 2024, according to U.S. Citizenship and Immigration Services, which has not published 2025 data yet — nearly 10% lived in Texas. The total was a 7% decrease from 2023, the agency said. From 2022 to 2024, the country has added more than 2.6 million new citizens through naturalization.
U.S. Sen. John Cornyn, who is up for reelection this year, said on Fox News that the shooting underscores “the importance of vetting people before they come across the border,” and is an example of “what happens when people become radicalized.”
Cornyn blamed the Biden administration for having “open border policies that let who knows what into the country,” Cornyn said.
Texas Democrats, meanwhile, responded to the shooting by pushing for stronger gun laws, but did not provide specifics on what policies would have prevented the man from obtaining weapons. Austin police also did not release details on how the man obtained the two firearms they say he used in the shooting.
Republicans control both chambers of the Texas Legislature and have routinely loosened gun restrictions while Democrats’ bills to curb access gain little traction.
Austin-based U.S. Reps. Greg Casar and Lloyd Doggett also denounced gun violence, but did not issue any specific policy proposals.
“We must end America’s gun violence epidemic,” Casar said in a post on X. “Americans should be able to have fun at a bar without it turning into an unspeakable nightmare like this one — and I will redouble my efforts in Congress to prevent the next tragedy like this.”
Doggett said: “Gun violence is preventable. This devastating loss of life was preventable. Until Republicans find the courage to say no to the [National Rifle Association] our country will be plagued with more tragedies.”
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.
Texas
South Texas Blood & Tissue sends blood units to Austin after 6th Street mass shooting
SAN ANTONIO — South Texas Blood & Tissue worked late last night and early this morning to prepare and send blood units to Austin in the wake of the mass shooting on 6th street early Sunday.
The Blood Emergency Readiness Corp (BERC) has been activated and an additional 140 units have been sent from various blood centers, including O negative and O positive.
The blood bank says community support is critical and community members are encouraged to donate at any local donor center.
3 dead, 14 injured in Austin mass shooting on 6th Street, suspect fatally shot by officers
Mayor Gina Ortiz Jones shared her condolences, adding that commonsense gun reform may prevent such tragedies in the future.
I’m deeply saddened to hear of the mass shooting in Austin that killed and injured so many,” Mayor Jones said in a statement. “Let’s keep our neighbors to the north in our prayers, that those injured recover quickly and the families of the victims who were needlessly murdered are comforted. We must prevent such tragedies from happening through commonsense gun solutions. Thank you to the first responders who were at the scene and prevented further loss of life.
U.S. Congressman Joaquin Castro condemned the country’s gun violence in an X post saying in part “Congress must continue to work to end the scourge of gun violence in our country.”
San Antonio’s FBI office is also assisting the Austin Police Department in their investigation, officials shared at a press briefing this morning.
Special Agent Alex Doran said the joint terrorism task force is helping investigate potential early indications of terrorism.
“We have members from our Evidence Response team as well as our many other specialty teams, including our digital forensics folks that are on scene, helping to address the scene and gather additional evidence,” Doran said. “Obviously, it’s still way too early in the process to determine an exact motivation, but there were indicators that on the subject and in his vehicle that indicate potential nexus to terrorism. Again, it’s still too early to make a determination on that.”
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Texas
St. Andrew’s Prom Closet helps North Texas teens shine without the high cost
It’s that time of year again – prom season. For many students, it’s a night to remember, but between dresses and other expenses, the costs can add up quickly. Every year, St. Andrew’s Methodist Church steps up to help ease the financial burden for families, offering free prom dresses and accessories to young women.
“I’m feeling very excited, very happy, you know it’s all like coming to me at once,” said Gabrielle Bennett, a high school junior.
Prom season is a moment many young girls look forward to, and finding the perfect dress.
Boutique experience for every shopper
“It was a lot of searching through a lot of dresses.. and seeing what fits, what doesn’t, what looks nice, and then you finally find one, and it fits perfect,” said Ally Atkins, a high school senior.
For 17 years, St. Andrew’s Methodist Church has opened its prom closet to girls across North Texas, helping those who may not be able to afford the high cost of prom. This year, organizers hope to serve 1,400 shoppers. There are more than 5,000 dresses to choose from in different colors, styles, and sizes.
“Every young lady should feel special at prom. Every young lady deserves to be beautiful, and in some cases, some of these young ladies, this would not be possible,” said Kathy Moore, a Prom Closet chairman.
Community donations make it possible
The experience is designed to feel like a real boutique – from trying on dresses to grabbing the perfect shoes, bag, and accessories. Everything is donated.
“I had one yesterday that walked into our dress area, and she stopped and just said, ‘wow,’ and so right there, that moment, that’s why we do it,” Moore said.
Organizers said the event is made possible by community donations and dozens of volunteers, but they’re always looking for more help. Next year, they hope to serve even more girls, continuing their mission to make more prom dreams come true.
“I want to thank this whole organization, I’m very grateful,” Bennett said.
How to participate
If you know someone who may need a prom dress this season, the Prom Closet is open until March 7. It is by appointment only. For more information, visit: https://standrewmethodist.org/prom-closet/
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