How Is Electricity in Texas Different from Other U.S. States?

Thomas Edison flipped the switch on the country’s first power plant in Manhattan in 1882, and in the years that followed, more than 4,000 individual electric utilities provided electricity for an increasingly modern society. But each utility operated independently, and after World War II, the demand for power began to ramp up. Electric utilities found it more efficient to connect their transmission systems into a power grid, and over time, three large interconnected systems evolved in the United States: the Eastern Interconnection and the Western Interconnection for most of the country, and the Texas Interconnection for, well, Texas.

The Electric Reliability Council of Texas (ERCOT) grew from that state’s long-lived independent streak, and its utilities only serve Texas customers. The state’s homegrown power serves most of the state, except for El Paso, the upper panhandle, and a hunk of east Texas. And by not selling to interstate customers, ERCOT is exempt from most federal regulation.

Even power use is bigger in Texas:

• Texas uses more electricity than any other state -- a whopping 44 percent more than California, which comes in at number two. Much of that power is gobbled up by petrochemical plants and oil refineries.
• ERCOT was formed in 1970, partly as a result of the major blackout that struck the northeastern United States in November 1965.
• ERCOT has been able to provide cheap power with few service problems. In fact, Texas electricity is cheaper per kilowatt hour than the national average.