Texas Laws Aim To Stabilize ERCOT Grid By Leveling The Playing Field Among All Power Generators

Spoiler: wind and solar will no longer get a free ride and destabilize the Texas power grid.

In 2021, Winter Storm Uri pushed Texas’s electricity grid to the brink, with just 4 minutes and 37 seconds from total collapse. Snow, ice, and freezing temperatures covered all 254 counties in the State for five days, starting February 13. Wind turbines froze, overcast skies incapacitated solar panels, some natural gas wells experienced freeze-offs, and even coal plants struggled with frozen equipment.

As power generators failed and electricity demand skyrocketed, the Electric Reliability Council of Texas (ERCOT) ordered rolling blackouts across Texas. Some local utilities unknowingly cut power to areas with electric natural gas compressors, which stopped gas flows to generating stations, causing more outages. (The Railroad Commission of Texas created a new division, Critical Infrastructure, so this problem would never happen again.) The grid’s frequency dropped dangerously below 60 hertz, nearly crashing, but a slight drop in demand and the recovery of some generation saved the grid from total collapse, which could have required weeks to recover from a “black” start of the grid.

Since then, ERCOT, the Public Utility Commission of Texas (PUCT), and lawmakers have repeatedly vowed to prevent another near-disaster. They have proposed ideas such as:

• Weatherization requirements for power plants to handle extreme cold (passed in 2021 via Senate Bill 3).

• Incentives for building more dispatchable power, specifically natural gas plants, such as the Texas Energy Fund (House Bill 1500, 2023).

• Market reforms prioritize reliable power, such as the Performance Credit Mechanism, which was debated but not implemented.

None of these proposals squarely addressed the grid reliability problem until Texas House Bill 3356 and Senate Bill 715 were recently approved by legislative committees and could become law. These bills set new reliability rules for all ERCOT power generators, not just new ones. They require all power generators on ERCOT, including wind and solar, to be dispatchable, meaning they can quickly adjust to meet demand.

To comply, generators must either build their own backup power, such as battery energy storage systems (BESS), or contract with others to provide their backup power. Articles with headlines like these claimed the legislation targets wind and solar unfairly:

• “Texas bills could shut down existing wind, solar farms” (Houston Chronicle)

• “Texas Senate passes anti-solar, wind bill” (pv magazine)

• “Texas just shot its wind + solar boom in the foot on purpose” (electrek)

• “Texas Senate passes bill requiring solar plants to provide power at night” (The Hill) (Note: This one is my personal favorite!)

• “Texas’ Clean Energy Boom Faces Onslaught of Anti-Renewable Bills” (Advanced Power Alliance)

These pants-on-fire editorials do not mention that generators that do not meet the dispatchable standards can contract with other generators for the supplemental power if they cannot provide their own backup. Well-known law firm, Vinson and Elkins, summarized the proposed laws as follows:

Generators that do not meet the reliability requirements could contract with other resources, including BESS, for supplemental power. It also empowers the PUCT and ERCOT to create a program of financial incentives and penalties for exceeding or failing to meet reliability requirements.Current law, set by House Bill 1500 in 2023, only applies to new generators starting in 2027. The new bills expand this to all generators by January 1, 2027, and allow the PUCT and ERCOT to set penalties for non-compliance or incentives for reliability.

The Texas Public Policy Foundation (TPPF) supports these bills, citing PUCT data showing that in 2023, wind and solar caused $788 million in ancillary services costs to balance the grid, part of a broader $2.3 billion in costs tied to renewable variability. TPPF said these costs could soon hit $2 billion annually as more renewables join the grid.

Former Texas State Representative Jason Isaac nailed it on X (@ISAACforEnergy):

Texans now pay the highest electricity rates in the South—up 28% in just four years—and it’s NOT an accident. We’re shelling out $2 BILLION a year to cover the reliability costs dumped on the grid by wind and solar—costs they should be paying.

By next year, over 50% of our reliable power—natural gas, coal, nuclear—will be 30+ years old. Why? Because the market is rigged to favor unreliable, subsidized generation. So here’s the question: Why are they refusing to implement firming—reliability standards that protect Texans?

@GregAbbott_TX gave clear direction: “Allocate reliability costs to generation resources that cannot guarantee their own availability, such as wind or solar power.”

This is NOT how you do “energy dominance.” This is energy weakness, ESG appeasement, and globalist grid mismanagement.

My Take

Wind and solar have enjoyed preferential treatment from ERCOT at the expense of electricity consumers. Texas says the free ride will soon be over, and its citizens will be spared from the devastating and costly effects.

Other US power grids should follow Texas. If this is coupled with the never-ending federal subsidies for wind and solar, as argued here, our power grids will be able to provide the stable power that the AI revolution will require.

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