A former chair of the Public Utility Commission of Texas believes the state's electric grid operator, the Electric Reliability Council Of Texas Inc., could establish more interties with the rest of the U.S. transmission grid without subjecting its wholesale power market to federal regulation.

The Federal Energy Regulatory Commission has increased its focus on grid reliability in the wake of the February 2021 winter storm, an extreme cold weather event that knocked out power for millions of Texans.

More than 200 people died from exposure as ERCOT was forced to implement massive grid outages due to a large loss of available generating capacity. FERC Chairman Richard Glick recently asserted that ERCOT needs to establish more interties with the rest of the U.S. power grid to help avoid a repeat disaster.

ERCOT only has a small number of interties with the Western and Eastern Interconnections, making it largely exempt from FERC's jurisdiction over interstate sales and transmission of electricity.

"I understand that is an important issue," Glick said Oct. 25 during a discussion with the board of the Southwest Power Pool. "But are you willing to actually have hundreds of people die, are you willing to have massive, four- or five-day blackouts because you can't wheel in power from elsewhere?"

FERC's latest winter reliability assessment, presented by commission staff last month, concluded that ERCOT is still vulnerable to extreme weather scenarios similar to the Texas winter storm. Under similar conditions, ERCOT could gain 1.6 GW in benefits from "operational mitigations," but that would still leave a capacity shortfall of up to 18.1 GW, according to the assessment.

'Nothing to lose'

Robert Gee, who chaired the PUCT in the 1990s, said Nov. 1 that ERCOT could connect to the broader U.S. power grid without losing jurisdiction over its wholesale power market.

Gee also serves on the North American Energy Standards Board Advisory Council. The board is convening a series of meetings this autumn on reliability challenges posed by gas and electric system interdependency.

"I'm not going to speak directly to Chairman Glick's commentary but what I will say is for people who think if ERCOT were to interconnect with the rest of the grid, that that would result in a loss of Texas jurisdiction, that is not accurate," Gee said during a panel discussion hosted by the Energy Bar Association's Texas Chapter. "Under the Federal Power Act, you can interconnect without Texas losing jurisdiction over wholesale markets."

Gee said he discussed the jurisdictional issue with a former FERC chairman and one sitting commissioner but declined to identify them.

Alison Silverstein, an independent consultant who previously worked at FERC and the PUCT, agreed with Gee's assessment.

"I think there's a lot to be gained and nothing to lose by doing significant increases in interconnections," Silverstein said during the discussion. "I wouldn't go as far Chairman Glick to say that we are putting lives at risk, but I would sure prefer having way more high-voltage interconnection to other regions than not."

Silverstein said Texas is "certainly sacrificing tremendous export opportunities and gains from not having sufficient interconnection."

Federal Power Act exemptions

Ari Peskoe, director of Harvard's Electricity Law Initiative, suggested in a Nov. 1 email that Sections 210 and 211 of the Federal Power Act could provide an avenue for ERCOT to establish more interconnections while maintaining jurisdictional independence.

In 2010, FERC rejected a request for a disclaimer of jurisdiction (EL10-22) by Tres Amigas LLC, a developer seeking authorizations for the Tres Amigas transmission superstation. As originally proposed, the facility with 30 GW of transmission transfer capacity would have linked all three North American power systems for the first time.

In its denial, FERC faulted Tres Amigas for failing to provide sufficient detail about which ERCOT entities would connect to the project. But FERC also noted that it has issued previous orders under Sections 210 and 211 authorizing ERCOT's existing interties with the broader U.S. bulk power system and encouraged Tres Amigas to pursue that procedural vehicle instead.

Tres Amigas eventually scaled back the project to only serve the Western and Eastern Interconnections and it has yet to reach commercial operation.

In July 2021, ERCOT officials presented a reliability roadmap to Texas lawmakers that included an assessment of the benefits and costs of increased transmission both internal and external to ERCOT.

ERCOT has since engaged a consultant to help work through the blueprint. The consultant's findings are expected within "the next couple of weeks," Bill Barnes, senior director of regulatory affairs for Houston-based NRG Energy Inc., said during the Nov. 1 discussion.

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