The statement: “The power grid in Texas is not part of the U.S. power grid because they wanted to avoid federal regulations.” – Facebook posting.
The winter disruptions that forced millions of Texans to bear icy temperatures without heat or power drew attention to the fact that Texas is the only state in the continental US with its own power grid.
Fact rating: true. A dislike of federal regulations was one of the main reasons why Texas energy companies opted for a power grid that did not cross state lines. Texas resisted regulation in major court cases.
Discussion
In the 1930s, Texas energy companies opted for a power grid that did not cross state lines, to prevent federal regulators from interfering in electricity sales.
In 1935, President Franklin Delano Roosevelt signed the Federal Power Act, which commissioned a regulatory agency called the Federal Federal Commission to oversee the sale of electricity that crossed state borders. Congress enacted the law in response to market dominance and shady business practices by large utilities during the 1920s and ’30s.
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Electrical companies in Texas and energy authorities immediately looked for ways to prevent federal interference under the law. To do so, they have chosen to keep the power grid completely within the borders of Texas and create an ‘electric Alamo’, according to U.S. Circuit Judge Richard D. Cudahy. Since federal regulators only had jurisdiction over interstate sales, the gambit prevented them from subjecting any electrical businesses in Texas to any rules.
“The utilities in Texas were so eager to uphold the traditional independence of Texas that they recalled the policy of isolation in a written agreement committing themselves to intra-surgery,” Cudahy wrote in a 1995 report on ” an energy-related court battle.
This agreement forms the basis of the electrical network that still exists today.
Five years after an eclipse closed much of the Northeastern United States in 1965, the Texas Electric Reliability Board, called ERCOT, was formed to oversee the Texas network. ERCOT continues to operate the network, which is still beyond the reach of federal regulators.
Several attempts have been made to integrate the Texas network into the broader American power system. In 1976, a Texas utility company, hoping to bring the state under federal jurisdiction, allowed the power to flow to another one of its Oklahoma properties for several hours in an event known as the ‘Midnight Connection ‘. The incident sparked a heated legal battle to subject Texas to federal oversight. However, the case was decided in favor of ERCOT, and the network remains independent of the rest of the system.
ERCOT has since campaigned for freedom from the rest of the United States in promotional videos. The state’s energy “independence is jealously guarded, I think both policymakers and the industry,” ERCOT CEO Bill Magness said in one of the videos.
However, the freedom of regulation also brought disadvantages.
By isolating its network, Texas has hampered the ability to import power from Eastern or Western energy systems, said Carey King, assistant director of the Energy Institute at UT Austin.
ERCOT is not completely separate from other U.S. grids, King said. Due to the Midnight Connection, it has two small ties with the eastern network, which can be used to input power during emergencies. However, this connection is not powerful enough to meet the demand in case of an eclipse like the one that has just occurred.