Texas is paying for backup power that won’t help the grid
Public Funding
Backup Power
Idle Capacity
Missed Grid Value
Texas has funded backup systems for hospitals, water systems, and other critical facilities. The goal makes sense: keep essential services operating when the grid fails.
The problem is that participating systems are restricted from supporting the grid during normal operations.
The Rules Prioritize Emergency Availability
State-funded distributed generation and storage cannot participate in normal energy sales, ancillary services, demand response, or similar grid programs.
The rules effectively treat “available for emergencies” and “useful only during emergencies” as the same thing.
That Leaves Potential Grid Value on the Table
Texas faces rising demand, constrained transmission, and a growing need for flexible resources. Distributed assets located at hospitals, campuses, and industrial sites could help while still maintaining required backup reserves.
Reliability and Grid Participation Do Not Have to Conflict
Emergency reserves, islanding requirements, and operating safeguards can protect reliability while still allowing assets to create value during normal conditions.
With the right guardrails, owners could earn a return, the grid could gain flexibility, and public funding could create more value.
