The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to more than 26 million Texas customers — representing about 90 percent of the state’s electric load. As the independent system operator for the region, ERCOT schedules power on an electric grid that connects more than 46,500 miles of transmission lines and 680+ generation units. It also performs financial settlement for the competitive wholesale bulk-power market and administers retail switching for 8 million premises in competitive choice areas. ERCOT is a membership-based 501(c)(4) nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature. Its members include consumers, cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities, transmission and distribution providers, and municipally owned electric utilities.

The Public Utility Commission of Texas (PUCT) regulates and oversees the delivery of electricity to ensure the safety and reliability of your electric service in Texas. The PUCT’s mission is to protect customers, foster competition, and promote high-quality infrastructure.

The electric grid is a complex and interconnected network of facilities that produce electricity (generators), facilities that transmit the electricity (transmission lines, transformers, and substations), and consumers (homes, businesses, and industrial facilities).  Electricity is produced at the numerous generating stations connected to the system, converting renewable, fossil fuel, or nuclear resources to electrical energy.  Electricity is then carried efficiently by high voltage transmission lines to the regions in which it’s needed.

The lower voltage distribution system moves the electricity from local distribution substations and lines, finally reaching your home.

Transmission facilities consist of transmission lines, substations, transformers, and other related equipment. As power plants generate energy, transmission facilities transport that high-voltage electricity from generation facilities to local distribution systems, which then disperse lower-voltage electricity to homes and businesses.  Substations are intersections of transmission lines where electricity can be added and/or removed from the transmission system.  Transformers transfer electricity from one circuit to another while also changing the voltage.

Competition in regional transmission planning processes introduces new and innovative solutions to the design, construction, finance, and operation of transmission projects.  Most importantly, though, competition has led to the introduction of cost caps that shift the risk of project cost overruns to developers and away from ratepayers.  Without competition, incumbent utilities have not been willing to accept the risk of cost overruns on their transmission projects.

A Right of First Refusal (ROFR) is an anti-competitive statutory provision allowing incumbent utilities to construct, own, and operate new transmission facilities in the absence of competitive bidding. ROFR laws harm consumers in the states in which they are enacted and in nearby states where the costs of new transmission projects are shared.