How the Texas Grid Actually Works
Understanding the grid structure helps explain why your electricity bills fluctuate and why outages happen.
Generation
Power plants produce electricity from natural gas (52%), wind (23%), solar (6%), coal (14%), and nuclear (5%)
Transmission
High-voltage lines carry power from plants to substations—Oncor, CenterPoint, AEP manage the wires
Distribution
Lower-voltage lines deliver power from substations to your home and HVAC system
Retail
TXU, Reliant, Green Mountain, and 100+ retail electric providers (REPs) sell power to consumers
ERCOT
Non-profit grid operator that balances supply and demand in real-time, 24/7/365
Why Texas Has Its Own Grid
Texas is the only state in the lower 48 that operates independently from the national interconnected grid. Here's why that matters.
Avoid federal regulation
The Federal Energy Regulatory Commission (FERC) regulates interstate electricity. By not crossing state lines, Texas avoided federal oversight until recent legislative changes.
Market flexibility
Texas pioneered electricity deregulation in 2002, creating a competitive retail market where you can choose your provider.
Faster decision-making
State-level control allows quicker responses to local needs without federal bureaucracy—though this also means less backup during emergencies.
Energy independence
Texas produces more electricity than it consumes, making it largely self-sufficient in normal conditions.
The Trade-off: Independence means Texas can't easily import power from other states during emergencies. During Winter Storm Uri, only about 800 MW could be imported from neighboring grids—roughly 1% of peak demand. When Texas generators failed, there was no backup.
Grid Stress Levels Explained
ERCOT uses a tiered alert system to communicate grid conditions. Here's what each level means for you.
Normal Operations
Reserves: >3,000 MWGrid operating normally with comfortable reserve margins.
Your action: No action needed—use electricity as normal.
Conservation Appeal
Reserves: 2,300-3,000 MWVoluntary request to reduce usage. Grid is tight but manageable.
Your action: Raise thermostat 2-3°F, delay laundry and dishwasher until evening.
Energy Emergency Alert 1
Reserves: 1,750-2,300 MWReserves falling. All available generation being deployed.
Your action: Significant reduction needed. Set AC to 78°F or higher, turn off non-essential devices.
Energy Emergency Alert 2
Reserves: <1,750 MWEmergency conditions. Load shedding (rolling blackouts) may begin.
Your action: Reduce to minimum. Prepare for potential power loss—charge phones, gather flashlights.
Energy Emergency Alert 3
Reserves: Rotating outagesRolling blackouts in progress to prevent total grid collapse.
Your action: Expect 15-45 minute outages rotating through areas. Protect vulnerable family members.
When the Grid Is Most Stressed
Understanding peak demand times helps you reduce bills and support grid stability.
| Time Period | Risk Level | Why |
|---|---|---|
| 2:00 PM - 7:00 PM (Summer) | Highest | AC units working hardest as homes absorb afternoon heat and people return from work |
| 6:00 AM - 9:00 AM (Winter) | High | Electric heating, heat pumps running on backup heat strips during cold mornings |
| 8:00 PM - 11:00 PM | Medium-High | Cooking, electronics, and HVAC still running but solar generation dropping to zero |
| 11:00 PM - 6:00 AM | Lowest | Most businesses closed, temperatures dropping, minimal AC usage |
Major Texas Grid Events: What We've Learned
Each grid crisis teaches lessons about HVAC preparation and resilience.
Winter Storm Uri
February 2021Impact
4.5 million homes without power, 246+ deaths, $195 billion in damages
Cause
Natural gas supply froze, generators failed, demand exceeded supply by 30,000+ MW
HVAC Lesson: Heat pumps without auxiliary heat failed completely. Gas furnaces without power backup couldn't operate. Proper winterization critical.
August 2019 Near-Miss
August 2019Impact
Prices hit $9,000/MWh (vs. normal $25-50)
Cause
Multiple generators offline during extreme heat, reserves dropped below 3%
HVAC Lesson: High-efficiency equipment reduces grid strain. Variable-speed systems adjust gradually vs. single-stage cycling.
May 2022 Heat Wave
May 2022Impact
Record demand for May, conservation appeals issued
Cause
Unseasonably hot temperatures caught seasonal maintenance off guard
HVAC Lesson: Have maintenance done in March/April before peak season begins.
Winter Storm Elliott
December 2022Impact
Rolling blackouts narrowly avoided
Cause
Record winter demand, some generator trips
HVAC Lesson: Post-Uri weatherization improvements helped, but system still vulnerable to extreme cold.
Demand Response Programs in North Texas
These programs pay you to reduce usage during grid emergencies or shift usage to off-peak times.
| Program | Provider | Benefit | Enrollment |
|---|---|---|---|
| Oncor Smart Thermostat Program | Oncor | Receive a free smart thermostat and $50-85/year for allowing temperature adjustments during peak events | Through participating REPs |
| TXU Free Nights & Weekends | TXU Energy | Free electricity from 9 PM - 6 AM weekdays and all weekend | Direct with TXU |
| Reliant Truly Free Weekends | Reliant | Free electricity Friday 6 PM through Sunday 11:59 PM | Direct with Reliant |
| Griddy-style Real-Time Pricing | Various | Pay wholesale prices—can be very cheap or extremely expensive | Requires research and risk tolerance |
| CoServ Load Management | CoServ | Credits for allowing cycling of AC compressor during emergencies | CoServ members only |
Real Example: A Frisco homeowner with TXU Free Nights runs their AC aggressively from midnight to 6 AM, pre-cooling the home to 68°F. During free hours, this costs nothing. The home slowly warms to 76°F by evening, avoiding most peak-rate usage. Annual savings: $400-$600 compared to a flat-rate plan.
Time-of-Use Strategies for Your HVAC
If you have a time-of-use electricity plan, these strategies can significantly reduce your bills while helping the grid.
Pre-cool your home
Saves 15-25%When: Cool to 72°F by 2 PM
Run AC hard during cheap morning hours, then let it coast through expensive afternoon peak.
Delay major appliances
Saves 10-20%When: Run after 9 PM
Dishwashers, laundry, and EV charging during off-peak hours.
Smart thermostat scheduling
Saves 10-15%When: Program higher temps 2-7 PM
Automatically reduce cooling during peak pricing without manual intervention.
Thermal mass usage
Saves 5-15%When: Cool overnight
Concrete floors, tile, and thermal mass absorb coolness overnight and release it during the day.
HVAC Equipment That Helps the Grid
Certain equipment choices reduce your demand on the grid and protect you during outages.
| Equipment | Grid Benefit | Cost | ROI |
|---|---|---|---|
| Variable-speed heat pump | Gradual startup reduces demand spikes, draws 30-50% less power during normal operation | $8,000-$16,000 | 7-12 years |
| Whole-house generator | Complete independence during outages, protects vulnerable family members | $8,000-$15,000 installed | Priceless during emergencies |
| Battery backup system | Store cheap overnight power, use during expensive peaks or outages | $10,000-$20,000 | 8-15 years depending on TOU rates |
| Smart thermostat | Automates demand response, optimizes usage around peak pricing | $200-$500 | 1-2 years |
| Ductless mini-split (zone) | Cool only occupied rooms, reduce whole-house AC runtime | $3,000-$6,000 per zone | 4-7 years |
Backup Power Options Compared
After Winter Storm Uri, many homeowners asked about backup power. Here's a realistic comparison.
Portable Generator
$500-$2,000Power Output
3,000-12,000W
Can Power
Window AC, refrigerator, lights, phone charging
Limitations
Noisy, requires gasoline, manual start, cannot power central HVAC
Standby Generator
$8,000-$15,000 installedPower Output
10,000-22,000W
Can Power
Central AC, full house including HVAC
Limitations
Requires natural gas line, professional installation, weekly testing
Battery + Solar
$15,000-$40,000Power Output
5,000-15,000W
Can Power
Lights, refrigerator, small AC or heat pump
Limitations
Cannot sustain central AC for long periods, expensive
EV as Backup (V2H)
$2,000-$5,000 for equipment (plus EV)Power Output
Varies by vehicle
Can Power
Depends on setup—some can power a house for 2-3 days
Limitations
Requires compatible EV and bidirectional charger
Best for Most Homes
A standby generator ($8,000-$15,000 installed) provides whole-house power including central AC. It starts automatically during outages and runs on natural gas—no refueling needed.
Budget Option
A portable generator ($500-$1,500) can power a window AC, refrigerator, and phone charging. Keep 20+ gallons of stabilized gas on hand and know how to use it safely.
Weatherization Checklist for Grid Resilience
Reducing your HVAC energy use helps during grid emergencies and extends comfort during outages.
| Action | Benefit | Priority |
|---|---|---|
| Seal air leaks around doors/windows | Reduces HVAC runtime by 10-20%, helping during grid stress | High |
| Add attic insulation to R-38+ | Keeps conditioned air inside longer during outages | High |
| Install weatherstripping on doors | Prevents conditioned air loss, reduces demand | Medium |
| Insulate ductwork in unconditioned spaces | Prevents 20-30% energy loss in attics/crawlspaces | High |
| Install low-e window film | Blocks heat gain, reduces afternoon AC load | Medium |
| Wrap water heater and exposed pipes | Prevents freezing during winter emergencies | High (winter) |
Monitor the Grid in Real-Time
Stay informed about grid conditions so you can respond before alerts are issued.
What to Do During a Grid Emergency
Quick reference guide for each alert level.
Conservation Appeal (Voluntary)
- • Raise thermostat to 78°F (or 2-3° higher than normal)
- • Delay running dishwasher, laundry, and other major appliances
- • Turn off unnecessary lights and electronics
- • Close blinds on south and west-facing windows
- • Pre-cool home before peak hours if possible
Energy Emergency Alert 1-2
- • All conservation measures plus: set AC to highest tolerable temp (78-82°F)
- • Turn off pool pumps, hot tubs, and non-essential equipment
- • Unplug devices not in active use
- • Prepare for potential outage: charge phones, locate flashlights
- • Check on vulnerable family members and neighbors
Energy Emergency Alert 3 (Rolling Blackouts)
- • Outages are rotating—yours should be 15-45 minutes
- • Don't open refrigerator/freezer unnecessarily (food stays cold for 4+ hours)
- • If you have medical equipment: contact provider, use backup power
- • Move to a safe location if temperature becomes dangerous
- • Don't restart AC at full blast when power returns—wait 5 minutes