Demand on Texas power grid expected to nearly double in 6 years

AUSTIN, Texas - The demand for electrical power in Texas will dramatically increase in the next few years. On Wednesday, a hearing was held at the state capitol on whether efforts to redesign the power grid can meet that demand in time.

The room for the Texas Senate Business and Commerce Committee was filled to capacity. The first to testify were the leaders of ERCOT and the PUC. 

The committee was told a multi-billion dollar loan program the legislature recently created to spur construction of new power plants is attracting interest.

"125 projects made it through the Notice of Intent to Apply stage and will now move into the formal application phase. Those projects represent 56GW and approximately $39 billion of investment," said PUC Chairman Thomas Gleeson.

That's good news, but the new plants will take several years to build. The committee was warned by ERCOT CEO Pablo Vegas, that the estimate for power demand by 2030 is much larger than what’s being produced now.

"So, what I was referring to is that going from 80 to 85 gigawatts, which range from where we are today to 150 in 2030, is almost a doubling of the ERCOT total peak demand over a six-year period, effectively. So, it's a fairly significant step change," said Vegas.

New technologies, AI and cryptocurrency mining like bitcoin, are driving the prediction. But the increase in demand is also expected to come from traditional Texas businesses like oil and gas exploration.

"The Permian Basin alone reflects about 24GW of that growth. And to put that into context, that's almost the size of the Houston coastal region of the state of Texas. So, the Permian Basin is forecasting to become about this size electrically as the Houston area," said Vegas.

MORE STORIES:

• Texas A&M wants to help build more plants to feed power grid
• Connect the Grid Act: Texas congress members introduce bill to connect grids

Creating new rules to hit the brakes on what's coming, or restricting it, was brought up by state Sen. Donna Campbell (R-New Braunfels).

"Can we just say no? They have too many pigs at the table. If they don't come with their own trough or full of food. I mean, can we just say no," said Campbell.

The committee was also warned that building new transmission lines may require more funding from the legislature. With 30 to 40% of utility bills already going to transmission, State Sen. Jose Menendez (D-San Antonio) voiced concern about how costs are being passed on to residential consumers.

"I see something inherently unjust in the fact that we're asking everyday Texans, we're making tough decisions about costs, grocery store stuff to be paying for, the ability for other people to make even greater profit, especially if they're moving from place to place and taking advantage of the low cost of Texas energy," said Menendez.

A complicated redesign of how power companies will be paid for generating electricity continues. The committee made it clear the new market must be based on actual power generation and not just capacity. 

The committee also heard testimony on cryptocurrency mining companies and the unique agreements they have to shut down during a power crisis. But the miners can also re-sell the electricity they have reserved when demand and price for that power is high. 

The committee signaled new regulations for that industry will be considered during the next Legislative Session. They also want better forecasting reports on future power demand estimates, with several committee members stating they felt like they were caught somewhat flat-footed.