Texas

ERCOT Abandons Congestion Plan, Pinpoints Key Texas Grid Weaknesses

Published

1 year ago

June 20, 2024

ERCOT Abandons Congestion Plan, Pinpoints Key Texas Grid Weaknesses

HOUSTON, TEXAS – DECEMBER 14: Pablo Vegas, president and CEO of ERCOT, speaks during press … [+] conference at Calpine, 717 Texas Ave., Thursday, Dec. 14, 2023, in Houston. (Melissa Phillip/Houston Chronicle via Getty Images)

Houston Chronicle via Getty Images

ERCOT CEO Pablo Vegas told his Board during a planning session this week that his agency will abandon a plan to relieve congestion on a key transmission line due to lack of customer response. Vegas said Tuesday that a planned conservation program has failed to attract significant commitments from big power consumers.

“The contract for capacity that was issued to support summer conditions resulted in a very low submission,” he told the ERCOT board. “It’s clear … we need to modify the approach for developing the next set of demand response capabilities in the ERCOT market.”

The issue at hand high-capacity transmission line designed to carry electricity generated by South Texas wind installations hundreds of miles north to the Dallas/Fort Worth market. During mid-day periods of high demand last summer, the line became congested with too much input, causing ERCOT to have to issue conservation warnings on as many as 11 days in August. The agency’s plan to address that issue was to solicit applications for voluntary conservation by major power users near the congestion point in South Texas for 500 MW of consumption, but the solicitation for bids attracted only three applications, all of which were for less than 10 MW.

HOUSTON, TEXAS – JUNE 15: Transmission towers are shown on June 15, 2021 in Houston, Texas. The … [+] Electric Reliability Council of Texas (ERCOT), which controls approximately 90% of the power in Texas, has requested Texas residents to conserve power through Friday as temperatures surge in the state. An increase in forced generation outages early into the Summer season has prompted this urgent request. (Photo by Brandon Bell/Getty Images)

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Two Critical Grid Weak Spots

The failure of the plan – and the need to devise it to begin with – highlights a pair of key weaknesses in the Texas grid as currently constructed:

The fact that the construction of new thermal generation capacity in high-demand regions like the DFW market has failed to keep pace with demand growth; and
The heavy reliance on costly transmission lines to move power generated by wind or solar industrial sites hundreds of miles to those demand centers.

Where wind is concerned, the problem in the state is that the only regions truly fit to host the big industrial sites are in the West Texas/Panhandle region and in deep South Texas, where populations are sparse. Over the first decade of this century, Texas spent $7 billion to build high-capacity transmission lines called the CREZ lines to carry wind-generated power from West Texas to the Houston and DFW markets. That final tab was 700% bigger than initial estimates provided by wind developers. Additional transmission has had to be added along with the more recent build-out of wind generation in South Texas.

The obsession by the state’s policymakers and regulators to pack the grid with intermittent and often unpredictable wind and solar at the expense of encouraging the installation of additional thermal or nuclear capacity has resulted in an increasingly unstable grid that requires ERCOT to often invoke novel plans like this one. It didn’t get a lot of news coverage, but this past winter, ERCOT even resorted to the extreme measure of trying to convince owners of mothballed coal-fired generation plants to reopen them as part of a plan to avoid blackouts during a major winter storm event.

Help Is On The Way

San Antonio-based CPS is currently in the process of upgrading the transmission line that caused the near-crisis situations last summer, but the anticipated completion date of that project is still three years away. As I reported here last week, help in the arena of new thermal capacity is also on the way after the new Texas Energy Fund to incentivize development of more natural gas generation attracted an overwhelming response from generation companies. But those projects will also take years to plan and build.

Looking out farther into the future, help could also be on the way in the form of modular nuclear power, after Dallas-based Natura Resources received the good news from the Nuclear Regulatory Commission that a construction permit for its planned molten salt reactor to be sited on the campus of Abilene Christian University (ACU) will be approved in September.

Texas Senator John Cornyn speaks at an event unveiling the housing for a molten salt modular nuclear … [+] reactor on the campus Abilene Christian University on April 12, 2024. Natura Resources CEO Doug Robison is to Cornyn’s immediate right.

Natura Resources, LLC

In a recent interview, Natura CEO Doug Robison told me the project, which is a demonstration project developed in conjunction with ACU, the University of Texas, Texas A&M University, and the Georgia Institute of Technology, has an anticipated startup date in 2027. The eventual success of that project could spur development of an array of such modular reactors – Robison says the reactor itself is roughly the size of a home refrigerator – that have the advantage of being installed in the middle of major demand centers rather than hundreds of miles distant.

The Bottom Line

Unfortunately, while this set of prospects for a more stable grid to come remain years away from reality, Mr. Vegas and his grid managers and planners at ERCOT will continue to have to devise novel ways to keep power flowing to a rapidly growing array of big demand centers. It’s a tough job, but somebody has to do it.

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Texas

Texas A&M Holds Off Pitt for Road Win in ACC/SEC Challenge

Published

4 hours ago

December 2, 2025

Press Room

Texas A&M Holds Off Pitt for Road Win in ACC/SEC Challenge

Bucky McMillan coaching — Nov 25, 2025; College Station, Texas, USA; Texas A&M Aggies head coach Bucky McMillan reacts during the first half against the Mississippi Valley State Delta Devils at Reed Arena. Mandatory Credit: Maria Lysaker-Imagn Images / Maria Lysaker-Imagn Images

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‘Only scratching the surface:’ Texas just became the first state to purchase bitcoin

Published

16 hours ago

December 2, 2025

Press Room

‘Only scratching the surface:’ Texas just became the first state to purchase bitcoin

The state of Texas recently purchased about $5 million worth of bitcoin through a BlackRock-administered exchange-traded fund, a representative for the state comptroller’s office confirmed in an email to The Dallas Morning News on Monday.

The purchase came several months after Texas Gov. Greg Abbott signed into law Senate Bill 21, a high-profile and controversial legislative effort that enabled the Texas comptroller’s office to establish a publicly funded strategic cryptocurrency reserve.

It also amounts to one of the first-ever cryptocurrency transactions by a state government amid a broader federal and state government embrace of the recently surging crypto industry. Other states, including New Hampshire and Arizona, have passed similar crypto reserve bills.

And last year, Wisconsin’s and Michigan’s pension funds also purchased crypto, although with the comptroller’s purchase Texas has now become the first state to actually fund such a reserve.

“The industry is maturing and growing — it’ll continue to become more mainstream, and I think Texas staking out a leadership position will be very beneficial to Texans over time, similar to what the oil and gas industry has done over the last century,” said Lee Bratcher, president of the Texas Blockchain Council, a crypto lobbying group that championed the state legislative effort.

“I think we’re only scratching the surface,” Bratcher said.

The state made the roughly $5 million purchase through BlackRock’s iShares Bitcoin Trust ETF (IBIT), a fund managed by the major asset management firm that trades in U.S. dollars but generally reflects the price of bitcoin. As of early afternoon Monday, IBIT was trading around $48, reflecting a roughly 20% loss over the past month and a 13% decrease since the beginning of the year.

Those valuations broadly align with the recently highly volatile price of bitcoin: Early this year — amid a crypto frenzy inspired largely by the new, extremely crypto-friendly Trump administration — the world’s predominant cryptocurrency soared to above $100,000 for the first time in its history, and then in early October reached an all-time high above $126,000.

Since then, though, as fears have grown about a cooling economy and a potential AI bubble that could send the stock market plummeting, valuations of cryptocurrencies have also dipped. One bitcoin traded at around $85,000 on Monday, near the digital coin’s lowest price since April.

FILE - In this April 3, 2013 photo, a 25 Bitcoin token is displayed in Sandy, Utah. (AP... — FILE – In this April 3, 2013 photo, a 25 Bitcoin token is displayed in Sandy, Utah. (AP Photo/Rick Bowmer, File)
Rick Bowmer / AP
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‘Placeholder investment’

The state of Texas made its purchase late last month at a price around $87,000, according to a social media post by Bratcher, who said he first learned of the state’s purchase through a recent Zoom call that included acting Texas Comptroller Kelly Hancock. The comptroller’s office did not respond to a question from The News asking about the specific price the state paid for its IBIT purchase.

The ETF purchase is “a placeholder investment,” said Kevin Lyons, a representative for the comptroller’s office, until the agency formally contracts with what it’s referring to as a cryptocurrency custodian. The agency is now reviewing responses from a request for information it issued and will later award an official contract, Lyons said.

While the new state law did not include a specific funding amount, Texas legislators have since allocated $10 million to the reserve. The amount represents a tiny fraction of the state’s $338 billion state budget, although the legislation’s supporters have argued it still amounts to an important measure of support for an emerging industry.

“I think with Texas leading in this way, it’s going to reap benefits for many decades to come across the state,” Bratcher said. “From a job creation perspective to a tax revenue perspective and everything in between.”

Earlier this year, addressing legislators ahead of a vote on SB 21, state Rep. Giovanni Capriglione, R-Southlake — one of the driving forces behind the crypto push — struck a similar note, calling the reserve bill “a forward-thinking measure” that was about “recognizing digital assets not as a trend but as a strategic opportunity” and “strengthening the state’s fiscal resilience.”

Yet even if Texas’ public crypto investment remains minuscule, many economists and fiscal watchdogs have criticized SB 21 along with other recent pro-crypto legislation on multiple fronts, arguing it amounts to a lobbyist-driven effort that’s likely to benefit the crypto industry much more than the state’s residents.

And while Texas has recently embraced bitcoin mining and other facets of the industry, with even Abbott pushing to make the state a global “crypto leader,” critics have pointed out that cryptocurrency itself has long been plagued by concerns about scams, corruption and energy use.

“It’s also backwards to our values in Texas,” John Griffin, a finance professor at the University of Texas at Austin, said earlier this year.

“Basically you have a conservative legislature saying, ‘We want less government,’ and yet here’s a case where you are wanting or encouraging government to speculate and possibly prop up an asset class.”