Glen Lyons: Texas Needs a “Shale Revolution” in Electricity

“Reliability alone is difficult. Massive new load growth alone is difficult. Texas now has to manage both.

…One answer is off-grid business power. Texas should create a clear parallel path for new electric systems that serve commercial and industrial customers without relying on the regulated grid. These systems would not serve residential consumers. They would not be connected to a regulated utility. And they would not place their costs on captive ratepayers.

…The Legislature can make that path simple: electric systems that are physically separate from a regulated grid or utility, and that do not serve residential customers, should not be regulated as public utilities. They should remain subject to generally applicable safety, environmental, land-use, and contract laws. But they should not be forced into a regulatory model designed for utilities that serve homes, schools, hospitals, and small businesses.

The benefits would extend beyond data centers. Every megawatt of demand served off-grid is a megawatt that does not have to be fit into ERCOT, MISO, SPP, or a regulated utility’s rate base. That gives the Public Utility Commission, ERCOT, utilities, co-ops, and municipal providers more room to focus on their core mission: affordable and reliable service for Texans.

Off-grid electricity developers will have to be wildly innovative to succeed. That is one of the best reasons to try. Texas became an energy leader by allowing private risk-taking, technical experimentation, and competition. Electricity needs the same kind of entrepreneurial opening that helped unlock the shale revolution. Off-grid business power would let Texas test new technologies, new commercial models, and new system designs without gambling with the existing grid. The best ideas could eventually inform ERCOT and the regulated utilities. Even incumbent utilities could participate by creating unregulated affiliates to compete in this new market.

This proposal does not replace ERCOT or the other grids. It complements them. Texas’s regulated grids remain vital to the health, safety, and prosperity of our state, and they must be improved. But the Legislature can help them by giving large new loads another path. Let the regulated grid focus on reliable service for households and existing customers, while private capital helps meet extraordinary new industrial demand. Texas can protect families, welcome growth, and spark the next generation of energy innovation.”

https://www.texaspolicyresearch.com/glen-lyons-texas-needs-a-shale-revolution-in-electricity/