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Texas power grid highlights ERCOT reliability strains from extreme heat, climate change, and low wind, as natural gas and renewables balance tight capacity amid EV charging growth, heat pumps, and blackout risk across the U.S.

Key Points

Texas power grid is ERCOT-run and isolated, balancing natural gas and wind amid extreme weather and electrification.

✅ Isolated from other U.S. grids, limited import support

✅ Vulnerable to extreme heat, winter storms, low wind

✅ Demand growth from EVs and heat pumps stresses capacity

Texas has a unique state-run power grid facing a Texas grid crisis that has raised concerns, but its issues with extreme weather, and balancing natural gas and wind, hold lessons for an entire U.S. at risk for power outages from climate change.

Grid operator the Electric Reliability Council of Texas, or ERCOT, which has drawn criticism from Elon Musk recently, called on consumers to voluntarily reduce power use on Monday when dangerous heat gripped America’s second-most populous state.

The action paid off as the Texas grid avoided blackouts — and a repeat of its winter crisis — despite record or near-record temperatures that depleted electric supplies amid a broader supply-chain crisis affecting utilities this summer, and risked lost power to more than 26 million customers. ERCOT later on Monday lifted the call for conservation.

For sure, it’s a unique situation, as the state-run power grid system runs outside the main U.S. grids. Still, all Americans can learn from Texas about the fragility of a national power grid that is expected to be challenged more frequently by hot and cold weather extremes brought on by climate change, including potential reliability improvements policymakers are weighing.

The grid will also be tested by increased demand to power electric vehicles (EVs) and conversions to electric heat pumps — all as part of a transition to a “greener” future.

Why is Texas different?
ERCOT, the main, but not only, Texas grid, is unique in its state-run, and not regional, format used by the rest of the country. Because it’s an energy-rich state, Texas has been able to set power prices below those seen in other parts of the country, and its independence gives it more pricing authority, while lawmakers consider market reforms to avoid blackouts. But during unusual strain on the system, such as more people blasting their air conditioners longer to combat a record heat wave, it also has no where else to turn.

A lethal winter power shortage in February 2021, during a Texas winter storm that left many without power and water, notoriously put the state and its independent utility in the spotlight when ERCOT failed to keep residents warm and pipes from bursting. Texas’s 2021 outage left more than 200 people dead and rang up $20 billion in damage. Fossil-fuel CL00, 0.80% backers pointed to the rising use of intermittent wind power, which generates 23% of Texas’s electricity. Others said natural-gas equipment was frozen under the extreme conditions.

This week, ERCOT is asking for voluntary conservation between 2 p.m. and 8 p.m. local time daily due to record high electricity demand from the projected heat wave, and also because of low wind. ERCOT said current projections show wind generation coming in at less than 10% of capacity. ERCOT stressed that no systemwide outages are expected, and Gov. Greg Abbott has touted grid readiness heading into fall, but it was acting preemptively.

A report late last year from the North American Electric Reliability Corp. (NERC) said the Texas system without upgrades could see a power shortfall of 37% in extreme winter conditions. NERC’s outlook suggested the state and ERCOT isn’t prepared for a repeat of weather extremes.

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Washington Grid Resilience Grant funds DOE-backed modernization to harden Washington's electric grid against extreme weather, advancing clean energy, affordable and reliable electricity, and community resilience under the Bipartisan Infrastructure Law via projects and utility partnerships.

Key Points

A $23.4M DOE grant to modernize Washington's grid, boost weather resilience, and deliver clean, reliable power.

✅ Targets outages, reliability, and community resilience statewide.

✅ Prioritizes disadvantaged areas and quality clean energy jobs.

✅ Backed by Bipartisan Infrastructure Law and DOE funding.

Washington state has received a $23.4 million Grid Resilience State and Tribal Formula Grant from the U.S. Department of Energy (DOE) to modernize the electric grid through smarter electricity infrastructure and reduce impacts due to extreme weather and natural disasters. Grid Resilience State and Tribal Formula Grants aim to ensure the reliability of power sector infrastructure so that communities have access to affordable, reliable, clean electricity.

“Electricity is an essential lifeline for communities. Improving our systems by reducing disruptive events is key as we cross the finish line of a 100% clean electricity grid and ensure equitable benefits from the clean energy economy reach every community,” said Gov. Jay Inslee.

The federal funding for energy resilience will enhance and expand ongoing current grid modernization and resilience efforts throughout the state. For example, working directly with rural and typical end-of-the-line customers to develop resilience plans and collaborating with communities and utilities, including smart city efforts in Spokane as examples, on building resilient and renewable infrastructure for essential services.

“This is a significant opportunity to supplement our state investments in building a robust, resilient electric grid that supports our long-term vision for clean, affordable and reliable electricity – the foundation for economic growth and job creation that strengthens our communities and keeps Washington globally competitive. It shows once again that we are maximizing the federal funding being made available by the Biden-Harris Administration to invest in the country’s infrastructure,” said Washington State Department of Commerce Director Mike Fong.

Across the border, British Columbia's clean energy shift adds regional momentum for resilient, low-carbon power.

Goals include:

Reducing the frequency, duration and impact of outages as climate change impacts on the grid intensify while enhancing resiliency in historically disadvantaged communities.
Strengthening prosperity by expanding well-paying, safe clean energy jobs accessible to all workers and ensuring investments have a positive effect on quality job creation and equitable economic development.

Building a community of practice and maximizing project scalability by identifying pathways for scaling innovations such as integrating solar into the grid across programs.

“The Grid Resilience Formula Grants will enable communities in Washington to protect households and businesses from blackouts or power shutdowns during extreme weather,” said Maria Robinson, Director, Grid Deployment Office, U.S. Department of Energy. “Projects selected through this program will benefit communities by creating good-paying jobs to deliver clean, affordable, and reliable energy across the country.”

DOE has also announced $34 million for grid improvements to bolster reliability nationwide.

“An innovative, reliable, and efficient power grid is vital to Washington’s continued economic growth and for community resilience especially in disadvantaged areas,” said U.S. Rep. Strickland, Co-Lead of the bipartisan Grid Innovation Caucus. “The funding announced today will invest in our energy grid, support good-paying jobs, and means a cleaner, more energy-efficient future.”

Funded through the Bipartisan Infrastructure Law and administered by DOE’s Grid Deployment Office, with related efforts such as California grid upgrades advancing nationwide, the Grid Resilience State and Tribal Formula Grants distribute funding to states, territories, and federally recognized Indian Tribes, over five years based on a formula that includes factors such as population size, land area, probability and severity of disruptive events, and a locality’s historical expenditures on mitigation efforts. Priority will be given to projects that generate the greatest community benefit providing clean, affordable, and reliable energy.

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EU Electricity Market Reform Opposition highlights nine states resisting an overhaul of the wholesale power market amid gas price spikes, urging energy efficiency, interconnection targets, and EU caution rather than redesigns affecting renewables.

Key Points

Nine EU states reject overhauling wholesale power pricing, favoring efficiency and prudent policy over redesigns.

✅ Nine states oppose redesign of wholesale power market.

✅ Call for efficiency and 15% interconnection by 2030.

✅ Ministers to debate responses amid gas-driven price spikes.

Germany, Denmark, Ireland and six other European countries said on Monday they would not support a reform of the EU electricity market, ahead of an emergency meeting of energy ministers to discuss emergency measures and the recent price spike.

European gas and power prices soared to record high levels in autumn and have remained high, prompting countries including Spain and France to urge Brussels to redesign its electricity market rules.

Nine countries on Monday poured cold water on those proposals, in a joint statement that said they "cannot support any measure that conflicts with the internal gas and electricity market" such as an overhaul of the wholesale power market altogether.

"As the price spikes have global drivers, we should be very careful before interfering in the design of internal energy markets," the statement said.

"This will not be a remedy to mitigate the current rising energy prices linked to fossil fuels markets across Europe."

Austria, Germany, Denmark, Estonia, Finland, Ireland, Luxembourg, Latvia and the Netherlands signed the statement, which called instead for more measures to save energy and a target for a 15% interconnection of the EU electricity market by 2030.

European energy ministers meet tomorrow to discuss their response to the price spike, including gas price cap strategies under consideration. Most countries are using tax cuts, subsidies and other national measures to shield consumers against the impact higher gas prices are having on energy bills, but EU governments are struggling to agree on a longer term response.

Spain has led calls for a revamp of the wholesale power market in response to the price spike, amid tensions between France and Germany over reform, arguing that the system is not supporting the EU's green transition.

Under the current system, the wholesale electricity price is set by the last power plant needed to meet overall demand for power. Gas plants often set the price in this system, which Spain said was unfair as it results in cheap renewable energy being sold for the same price as costlier fossil fuel-based power.

The European Commission has said it will investigate whether the EU power market is functioning well, but that there is no evidence to suggest a different system would have better protected countries against the surge in energy costs, and that rolling back electricity prices is tougher than it appears during such spikes.

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Ontario Global Adjustment Charge faces constitutional scrutiny as a regulatory charge vs tax; Court of Appeal revives case over electricity pricing, feed-in tariff contracts, IESO policy, and hydro rate impacts on consumers and industry.

Key Points

A provincial electricity fee funding generator contracts, now central to a court fight over tax versus regulatory charge.

✅ Funds gap between market price and contracted generator rates

✅ At issue: regulatory charge vs tax under constitutional law

✅ Linked to feed-in tariff, IESO policy, and hydro rate hikes

Ontario’s court of appeal has decided that a constitutional challenge of a steep provincial electricity charge should get its day in court, overturning a lower-court judgment that had dismissed the legal bid.

Hamilton, Ont.-based National Steel Car Ltd. launched the challenge in 2017, saying Ontario’s so-called global adjustment charge was unconstitutional because it is a tax — not a valid regulatory charge — that was not passed by the legislature.

The global adjustment funds the difference between the province’s hourly electricity price and the price guaranteed under contracts to power generators. It is “the component that covers the cost of building new electricity infrastructure in the province, maintaining existing resources, as well as providing conservation and demand management programs,” the province’s Independent Electricity System Operator says.

However, the global adjustment now makes up most of the commodity portion of a household electricity bill, and its costs have ballooned, as regulators elsewhere consider a proposed 14% rate hike in Nova Scotia.

Ontario’s auditor general said in 2015 that global adjustment fees had increased from $650 million in 2006 to more than $7 billion in 2014. She added that consumers would pay $133 billion in global adjustment fees from 2015 to 2032, after having already paid $37 billion from 2006 to 2014.

National Steel Car, which manufactures steel rail cars and faces high electricity rates that hurt Ontario factories, said its global adjustment costs went from $207,260 in 2008 to almost $3.4 million in 2016, according to an Ontario Court of Appeal decision released on Wednesday.

The company claimed the global adjustment was a tax because one of its components funds electricity procurement contracts under a “feed-in tariff” program, or FIT, which National Steel Car called “the main culprit behind the dramatic price increases for electricity,” the decision said.

Ontario’s auditor general said the FIT program “paid excessive prices to renewable energy generators.” The program has been ended, but contracts awarded under it remain in place.

National Steel Car claimed the FIT program “was actually designed to accomplish social goals unrelated to the generation of electricity,” such as helping rural and indigenous communities, and was therefore a tax trying to help with policy goals.

“The appellant submits that the Policy Goals can be achieved by Ontario in several ways, just not through the electricity pricing formula,” the decision said.

National Steel Car also argued the global adjustment violated a provincial law that requires the government to hold a referendum for new taxes.

“The appellant’s principal claim is that the Global Adjustment was a ‘colourable attempt to disguise a tax as a regulatory charge with the purpose of funding the costs of the Policy Goals,’” the decision said. “The appellant pressed this argument before the motion judge and before this court. The motion judge did not directly or adequately address it.”

The Ontario government applied to have the challenge thrown out for having “no reasonable cause of action,” and a Superior Court judge did so in 2018, saying the global adjustment is not a tax.

National Steel Car appealed the decision, and the decision published Wednesday allowed the appeal, set aside the lower-court judgment, and will send the case back to Superior Court, where it could get a full hearing.

“The appellant’s claim is sufficiently plausible on the evidentiary record it put forward that the applications should not have been dismissed on a pleadings motion before the development of a full record,” wrote Justice Peter D. Lauwers. “It is not plain, obvious and beyond doubt that the Global Adjustment, and particularly the challenged component, is properly characterized as a valid regulatory charge and not as an impermissible tax.”

Jerome Morse of Morse Shannon LLP, one of National Steel Car’s lawyers, said the Ontario government would now have 60 days to decide whether to seek permission to appeal to the Supreme Court of Canada.

“What the court has basically said is, ‘this is a plausible argument, here are the reasons why it’s plausible, there was no answer to this,’” Morse told the Financial Post.

Ontario and the IESO had supported the lower-court decision, but there has been a change in government since the challenge was first launched, with Progressive Conservative Premier Doug Ford replacing the Liberals and Kathleen Wynne in power. The Liberals had launched a plan aimed at addressing hydro costs before losing in a 2018 election, the main thrust of which had been to refinance global adjustment costs.

Wednesday’s decision states that “Ontario’s counsel advised the court that the current Ontario government ‘does not agree with the former government’s electricity procurement policy (since-repealed).’

“The government’s view is that: ‘The solution does not lie with the courts, but instead in the political arena with political actors,’” it adds.

A spokesperson for Ontario Energy Minister Greg Rickford said in an email that they are reviewing the decision but “as this matter is in the appeal period, it would be inappropriate to comment.” 

Ontario had also requested to stay the matter so a regulator, the Ontario Energy Board, could weigh in, while the Nova Scotia regulator approved a 14% hike in a separate case.

“However, Ontario only sought this relief from the motion judge in the alternative, and given the motion judge’s ultimate decision, she did not rule on the stay,” Thursday’s decision said. “It would be premature for this court to rule on the issue, although it seems incongruous for Ontario to argue that the Superior Court is the convenient forum in which to seek to dismiss the applications as meritless, but that it is not the convenient forum for assessing the merits of the applications.”

National Steel Car’s challenge bears a resemblance to the constitutional challenges launched by Ontario and other provinces over the federal government’s carbon tax, but Justice Lauwers wrote “that the federal legislative scheme under consideration in those cases is distinctly different from the legislation at issue in this appeal.”

“Nothing in those decisions impacts this appeal,” the judge added.
 

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Ontario Clean Energy Adjustment lowers hydro bills by shifting global adjustment costs, cutting time-of-use rates, and using OPG debt financing; ratepayers get inflation-capped increases for four years, then repay costs over 20 years.

Key Points

A 20-year line item repaying debt used to lower rates for 10 years by shifting global adjustment costs off hydro bills.

✅ 17% average bill cut takes effect after royal assent

✅ OPG-managed entity assumes debt for 10 years

✅ 20-year surcharge repays up to $28B plus interest

Ontarians will see lowered hydro bills for the next 10 years, but will then pay higher costs for the following 20 years, under new legislation tabled Thursday.

Ten weeks after announcing its plan to lower hydro bills, the Liberal government introduced legislation to lower time-of-use rates, take the cost of low-income and rural support programs off bills, and introduce new social programs.

It will lower time-of-use rates by removing from bills a portion of the global adjustment, a charge consumers pay for above-market rates to power producers. For the next 10 years, a new entity overseen by Ontario Power Generation will take on debt to pay that difference.

Then, the cost of paying back that debt with interest -- which the government says will be up to $28 billion -- will go back onto ratepayers' bills for the next 20 years as a "Clean Energy Adjustment."

An average 17-per-cent cut to bills will take effect 15 days after the hydro legislation receives royal assent, even as a Nov. 1 rate increase was set by the Ontario Energy Board, but there are just eight sitting days left before the Ontario legislature breaks for the summer. Energy Minister Glenn Thibeault insisted that leaves the opposition "plenty" of time for review and debate.

Premier Kathleen Wynne promised to cut hydro bills and later defended a 25% rate cut after widespread anger over rising costs helped send her approval ratings to record lows.

Electricity bills in the province have roughly doubled in the last decade, due in part to green energy initiatives, and Thibeault said the goal of this plan is to better spread out those costs.

"Like the mortgage on your house, this regime will cost more as we refinance over a longer period of time, but this is a more equitable and fair approach when we consider the lifespan of the clean energy investments, and generating stations across our province," he said.

NDP critic Peter Tabuns called it a "get-through-the-election" next June plan.

"We're going to take on a huge debt so Kathleen Wynne can look good on the hustings in the next few months and for decades we're going to pay for it," he said.

The legislation also holds rate increases to inflation for the next four years. After that, they'll rise more quickly, as illustrated by a leaked cabinet document the Progressive Conservatives unveiled Thursday.

The Liberals dismissed the document as containing outdated projections, but confirmed that it went before cabinet at some point before the government decided to go ahead with the hydro plan.

From about 2027 onward -- when consumers would start paying off the debt associated with the hydro plan -- Ontario electricity consumers will be paying about 12 per cent more than they would without the Liberal government's plan to cut costs in the short term, even though a deal with Quebec was not expected to reduce hydro bills, the government document projected.

But that was just one of many projections, said Energy Minister Glenn Thibeault.

"We have been working on this plan for months, and as we worked on it the documents and calculations evolved," he said.

The government's long-term energy plan is set to be updated this spring, and Thibeault said it will provide a more accurate look at how the hydro plan will reduce rates, even as a recovery rate could lead to higher hydro bills in certain circumstances.

Progressive Conservative critic Todd Smith said the "Clean Energy Adjustment" is nothing more than a revamped debt retirement charge, which was on bills from 2002 to 2016 to pay down debt left over from the old Ontario Hydro, the province's giant electrical utility that was split into multiple agencies in 1999 under the previous Conservative government.

"The minister can call it whatever he wants but it's right there in the graph, that there is going to be a new charge on the line," Smith said. "It's the debt retirement charge on steroids."

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Mexico Energy Reform Defeat underscores opposition unity as CFE-first rules, state regulators, and lithium nationalization falter amid USMCA concerns, investment risks, and clean energy transition impacts in Congress over power generation policy.

Key Points

The failed push to expand CFE control, flagged for USMCA risks, higher costs, regulator shifts, and slower clean energy transition.

✅ Bill to mandate 54% CFE generation and priority dispatch failed.

✅ Opposition cited USMCA breaches, higher prices, slower clean energy.

✅ Lithium nationalization to return via separate legislation.

Mexican President Andres Manuel Lopez Obrador's plan to increase state control of power generation was defeated in parliament on Sunday, as opposition parties united in the face of a bill they said would hurt investment and breach international obligations, concerns mirrored by rulings such as the Florida court on electricity monopolies that scrutinize market concentration.

His National Regeneration Movement (MORENA) and its allies fell nearly 60 votes short of the two-thirds majority needed in the 500-seat lower house of Congress, mustering just 275 votes after a raucous session that lasted more than 12 hours.

Seeking to roll back previous constitutional reforms that liberalized the electricity market, Lopez Obrador's proposed changes would have done away with a requirement that state-owned Comision Federal de Electricidad (CFE) sell the cheapest electricity first, a move reminiscent of debates when energy groups warned on pricing changes under federal proposals, allowing it to sell its own electricity ahead of other power companies.

Under the bill, the CFE would also have been set to generate a minimum of 54% of the country's total electricity, and energy regulation would have been shifted from independent bodies to state regulators, paralleling concerns raised when a Calgary retailer opposed a market overhaul over regulatory impacts.

The contentious proposals faced much criticism from business groups and the United States, Mexico's top trade partner as well as other allies who argued it would violate the regional trade deal, the United States-Mexico-Canada Agreement (USMCA), even as the USA looks to Canada for green power to deepen cross-border energy ties.

Lopez Obrador had argued the bill would have protected consumers and made the country more energy independent, echoing how Texas weighs market reforms to avoid blackouts to bolster reliability, saying the legislation was vital to his plans to "transform" Mexico.

Although the odds were against his party, he came into the vote seeking to leverage his victory in last weekend's referendum on his leadership.

Speaking ahead of the vote, Jorge Alvarez Maynez, a lawmaker from the opposition Citizens' Movement party, said the proposals, if enacted, would damage Mexico, pointing to experiences like the Texas electricity market bailout after a severe winter storm as cautionary examples.

"There isn't a specialist, academic, environmentalist or activist with a smidgen of doubt - this bill would increase electricity prices, slow the transition to (clean) energy in our country and violate international agreements," he added.

Supporters of clean-energy goals noted that subnational shifts, such as the New Mexico 100% clean electricity bill can illustrate alternative pathways to reform.

The bill also contained a provision to nationalize lithium resources.

Lopez Obrador said this week that if the bill was defeated, he would send another bill to Congress on Monday aiming to have at least the lithium portion of the proposed legislation passed.

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