This blog looks at wholesale electricity prices in Texas as set by the Electricity Reliablility Council of Texas (ERCOT). ERCOT’s primary mandate is to maintain grid frequency at 60Hz which is accomplished by matching supply and demand. Texas has a deregulated electricty grid with demand price incentive vs capacity incentive. Instead of paying for guaranteed capacity (where the utility and generators work together to say we will need 50GW capacity how do we make this happen), in simplest terms, Texas operates like rideshare apps with instantaneous demand pricing. As demand increases ERCOT raises the wholesale price of electricity to encourage more providers online.

This blog is not to discuss the merits of the Texas Grid vs the rest of the US directly. My goal is to look at performance of this system is when compared to a feedback controller found in processing plants, HVAC systems, and smokers because the control handle is cost and that makes it way to consumers at some point.