Texas grid survived record demand with less backup power, undercutting calls for pricier reserves

Texas' power grid got through a summer of record demand even though, for seven months, the Electric Reliability Council of Texas was purchasing much less backup electricity than its own model called for.

That unexpected result is now intensifying questions about whether Texans should be asked to fund even more reserves in 2027.

Here's what to know

According to The Dallas Morning News, ERCOT undershot its planned reserve purchases by about 3.7 gigawatts — enough power for up to 3 million homes — due to an internal modeling mistake.

In filings with regulators, ERCOT said the issue arose after the employee who handled the model moved to a different role, and the work was approved without a second review.

Summer demand still reached record levels without destabilizing the grid. ERCOT officials said they will not try to make up the missing reserves during the rest of 2026, though a spokesperson said the grid operator will start adjusting some overnight reserve purchases in September.

Meanwhile, ERCOT is reviewing a stricter reserve standard for 2027 that would have consumers pay for additional backup power.

Opponents say the summer's performance makes that argument harder to make: if the grid remained stable with a smaller buffer, charging Texans more becomes tougher to justify.

More background

Reserve power serves as a cushion for the grid when electricity demand spikes or power plants unexpectedly go offline.

Since the 2021 winter freeze, ERCOT has operated with a larger reliability margin to lower the risk of blackouts, but critics say that caution also carries added cost.

Independent market monitors Jeff McDonald and Andrew Reimers said ERCOT's reserve approach was already more aggressive than necessary. In a report criticizing the standard, they wrote, "The ERCOT proposal goes too far and will result in significant excess cost with no added reliability benefit."

Higher reserve requirements can eventually flow through to electricity costs for households and businesses.

Generators and grid operators, however, say one strong summer does not settle the issue. Getting through record demand without blackouts, they argue, does not remove the danger posed by extreme weather or unexpected equipment failures.

What's being done?

ERCOT said it has changed its process so future modeling must be verified by another reviewer after the mistake went unnoticed for months.

Nitika Mago, a senior manager at ERCOT, said the fast growth of large-scale battery storage helped explain why the reserve shortfall did not produce obvious signs of weakness on the grid.

"That feature has helped reduce some of the gap," Mago said.

ERCOT is also studying what its reserve purchases should look like in 2027, though it said it has not estimated how the change would affect consumers' costs.

The spokesperson added, "Accurate prices cannot be determined, as doing so would require knowing how the market would have behaved had the higher quantities been posted."

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