Millions of people across the states of Texas remain without power this week after a historic winter storm pummeled the state. This has not only created a very dangerous situation for people who are struggling to stay warm as freezing temperatures persist, but also highlighted an interesting side effect of the Electric Reliability Council of Texas’ auction-based allocation system. More specifically, the price spikes that have come along with reduced capacity of the power grid. This could prove difficult for those with electric vehicles, as one Fox Business report states.
Texas is the only state in the continental United States with a deregulated energy market. ERCOT is responsible for managing 75 percent of the state’s electric architecture and supply, and has come under fire during this emergency situation. The company operates real-time auctions in which providers bid to fill their power grid needs. Like with any type of auction, as supply goes down and demand goes up, so too does the price. This resulted in prices spiking above the grid’s $9,000 per megawatt-hour cap. According to the report from Fox, power typically costs $25 per megawatt-hour.
With prices so high, it would cost the average Tesla owner nearly $900 to fully charge their vehicle, if they had access to electricity in the first place. A typical electric vehicle “fill-up” would run a driver $18. While this pricing is all-but theoretical based on the current situation, it is shocking nonetheless. Think of this as the electrified version of gas shortages that take place up north when these blackouts take place.
It is important to note that this sort of pricing surge cannot happen outside of Texas. It is a direct result of the deregulation and privatization of the state’s power grid. The Electric Reliability Council of Texas’ own auction system also didn’t do much to help in this situation. That said, this winter storm situation reminds us how important the national power grid is to our way of life. As electric vehicles become more prevalent, we are going to need to take some serious steps to ensure that the grid is ready for the added load.