Texas' Electricity Island
May 7, 2001
Unlike California and New York, Texas has an abundance of electric power. One reason, experts say, is that Texans have long maintained a healthy skepticism toward federal regulation -- and have acted accordingly. By confining their power grid to Texas, state utilities avoided oversight by the Federal Energy Regulatory Commission.
As a result, FERC couldn't force Texas to send power out of state in case of an emergency. The state's major utilities went to great lengths to ensure there were no interstate connections.
- Texas' excess electricity production is nearly enough to power New York City; and by summer of next year the excess may be close to 15,000 megawatts -- enough to power 15 million homes.
- Texas has 27 new generating plants under construction -- more than any other state.
- Because the state's low rates and excess power allow it to attract industries, officials are in no hurry to build transmission lines to send energy to other states -- which would take at least three years and cost Texas ratepayers about $600 million.
Another factor which has set Texas apart from energy-hungry states is its business-friendly approach to deregulation.
- Unlike California, with its stringent emissions and zoning rules, Texas has made it quick and easy for power companies to locate their plants almost anywhere they can find a place to hook up to the grid.
- Last year, Texas completed a major upgrade to alleviate bottlenecks on the grid and it has six similar projects underway.
- Whereas California largely failed to bring new plants online even though power demand was growing, Texas began building plants in 1998.
- Since then, $11 billion worth of power plants have been completed or started -- and more are on the drawing board.
Source: Alexi Barrionuevo and Russell Gold, "Texas May Face a Glut of Electricity, but That Won't Aid Rest of U.S.," Wall Street Journal, May 7, 2001.
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