Texas will have an electricity shortage...sooner than you think

Texas Electricity Adequacy
Texas Electricity Adequacy

To put it as simply as possible:

  • Texas will not have the electricity reserve margin it needs - starting next year
  • Texas will have inadequte electricity generation to meet its needs in as little as 10 years


Texas really is like a "whole other country" because we have our own electricial grid.  There is an east coast grid, a west coast grid...and Texas.  It is administered by ERCOT - the Electric Reliability Council of Texas.


ERCOT has an objective to maintain a 13.75% margin between peak demand and available electricity generation.  In 2013, we fall below that and keep dropping.  The "brownouts" of winter and summer, 2011 occurred under a 13.75% margin.


Even more ominous is that new electricity generation is not keeping up with demand and by 2022 we're looking at having inadequate electricity. 


The law of "Supply and Demand" is setting up a scenario where Texas electricity prices are going to increase as increasing demand meets a mostly static supply.  


While the U.S. Energy Information Agency forecasts 3.78% anual inflation for electricity, remember...Texas has its own grid system and we're completely market-driven.


But don't we have a bunch of natural gas?