Texas recently funded a new program to keep hospitals, water systems, and other critical facilities running when the power goes out. It’s a reasonable use of public money, but buried in the program rules is a restriction that undercuts the investment’s broader value. The backup systems being funded aren’t allowed to support the grid during normal operations. They can only function as emergency equipment. That’s worth questioning.
The Texas Backup Power Package Program bars state-funded distributed generation and storage systems from participating in energy sales, ancillary services, emergency response programs, and demand response. The reasoning isn’t hard to follow. Public funds are going toward site reliability, and officials want to make sure the equipment is available when a real emergency hits. That’s a defensible position. The problem is that it treats “available for emergencies” and “useful only during emergencies” as the same thing, and they’re not.
Texas is managing rising electricity demand, strained dispatchable resources, and growing transmission constraints all at once. Distributed generation and storage assets located across hospitals, campuses, and industrial sites are precisely the kind of flexible, local resources that could provide meaningful relief. Modern systems can be configured to maintain their emergency reserves while still contributing to grid stability during normal hours. The technology isn’t experimental, the controls, protocols, and safeguards already exist.
Under the current rules, none of that is possible for program participants. The state ends up with publicly funded equipment that sits idle most of the year, generating no return for the owner and no benefit to the grid outside of actual outages.
Nobody is arguing that a hospital’s backup generator should be tied up in a grid program when the lights go out across the city. Resilience has to come first, and that requirement can be written directly into the rules through mandatory reserve levels, islanding requirements, and operational safeguards. Within those guardrails, though, there’s no good reason to prohibit owners from participating in grid support programs when their systems can safely do so. They’d earn a return on the investment, the grid would gain additional flexibility, and the public funds would stretch further.
Reliability and grid participation aren’t in conflict. Texas just needs a policy framework that recognizes that.
