The Electric Grid and ERCOT
The electricity grid is a network of transmission wires, electrical substations, and power plants with one goal: to make sure electricity reliably flows to wherever it is needed. You do not need to know the specifics of exactly how everything works, but basically the grid operates as follows:
- Power plants (whether nuclear, hydroelectric, or natural gas) produce power at an extremely high voltage.
- The “Transmission Grid” moves this high-voltage electricity long distances towards demand, where electrical substations reduce the voltage to more usable levels.
- Electricity is distributed to businesses and homes.
The Electric Reliability Council of Texas (ERCOT) manages most of Texas’ electric grid. Texas, unlike other states, maintains its own electric grid and does so in both regulated (such as Austin and San Antonio) and deregulated electricity markets (such as Houston and Dallas). ERCOT operates a free market for electricity on a day-by-day, hour-by-hour basis where electric companies (such as Power Express) buy power from power generators (such as wind farms, nuclear reactors, and natural gas power plants). The free market allows electricity to be obtained for the best price possible, and the prices are publicly available here.
Some more facts about ERCOT:
- ERCOT’s highest peak demand ever was just shy of 70,000 MW. In more familiar units, that is over 90 million horsepower.
- ERCOT manages over 46,000 miles of transmission lines.
- Texas’ Public Utilities Commission (PUC) has the primary jurisdiction over ERCOT.