The Texas Power Grid and Electricity: What California Relocators Should Know

ERCOT stands for the Electric Reliability Council of Texas. It is the independent system operator that manages the flow of electric power to approximately 90 percent of Texas customers — roughly 26 million people. ERCOT does not own power plants or transmission lines. It coordinates the market and ensures supply and demand remain balanced in real time.

The key structural feature of ERCOT is that it is electrically isolated from the rest of the United States. The Texas grid is not connected to the Eastern Interconnection or the Western Interconnection, which together cover the contiguous 48 states outside Texas. This isolation was maintained deliberately since the 1930s to keep the Texas grid outside federal jurisdiction under the Federal Power Act of 1935.

What that means in practice: ERCOT is regulated by the Public Utility Commission of Texas and the Texas Legislature, not by the Federal Energy Regulatory Commission (FERC). When the Texas grid faces a supply shortage, it cannot draw power from neighboring states. When it has excess power, it cannot export it to the Eastern or Western interconnections. The system is self-contained.

For California relocators, this is the most important structural difference. California's grid, managed by the California Independent System Operator (CAISO), is part of the Western Interconnection and can draw on or send power to 14 other states and Canadian provinces. ERCOT has no such buffer. The Winter Storm Uri event in February 2021, which caused widespread blackouts across Texas, was a direct consequence of this isolation combined with a generation fleet that was not winterized for extreme cold.

ERCOT has since implemented reforms — winterization mandates for generation facilities, improved weather forecasting integration, and increased reserve margins. The grid has added approximately 35 gigawatts of new generation capacity since 2021, primarily solar, wind, and battery storage. But the structural isolation remains. Anyone moving to Texas should understand what that means.

Most of Texas — including the Hill Country — operates under a deregulated retail electricity market. This means you choose your electricity provider and plan, rather than receiving service from a single regulated utility like PG&E, Southern California Edison, or SDG&E.

In a deregulated market, the system is split into three distinct entities:

• Generation: Companies that own and operate power plants (natural gas, coal, nuclear, solar, wind). They sell electricity into the wholesale market.
• Transmission and distribution (TDU): The company that owns the poles, wires, and meters that deliver electricity to your home. In the Boerne and Kendall County area, this is typically CPS Energy (for portions of the Hill Country) or the City of Boerne's municipal utility. This is not something you choose — it is determined by your address.
• Retail electric provider (REP): The company you choose to buy electricity from. They buy power on the wholesale market, add their margin, and bill you. There are more than 140 REPs operating in Texas, offering thousands of different plans.

The entity that handles outages and maintains the physical infrastructure is the TDU — not your REP. If your power goes out, you call the TDU. If you have a billing dispute, you call your REP. This is a common source of confusion for new residents.

Every electricity plan in Texas must include an Electricity Facts Label (EFL), a standardized document that lists the average price per kilowatt-hour at different usage levels, the base charge, the TDU pass-through charges, and any contract terms or early termination fees. The EFL is the single most important document when comparing plans. Do not rely on the teaser rate advertised on the provider's website — read the EFL.

Fixed-Rate Plans

A fixed-rate plan locks in a specific rate per kWh for the duration of the contract, typically 12, 24, or 36 months. Your rate does not change when wholesale prices rise or fall. This is the most common plan type for homeowners and the safest option for someone who wants predictable monthly bills. Fixed-rate plans often carry an early termination fee of $150 to $250 if you cancel before the contract ends.

Variable-Rate Plans

A variable-rate plan charges a rate that fluctuates monthly based on wholesale market conditions. These plans offer no price guarantee and can spike significantly during periods of high demand — summer afternoons, winter cold snaps. Variable-rate plans are generally a poor choice for homeowners who want budget predictability. They are best suited for short-term situations where you know you will move within a few months.

Time-of-Use Plans

Time-of-use plans charge lower rates during off-peak hours (typically overnight and midday on weekends) and higher rates during peak hours (typically weekday afternoons and evenings). For a family that can shift significant electricity usage to off-peak hours, these plans can save money. For a typical household with air conditioning running through the afternoon, the savings may not justify the complexity.

Free Nights or Free Weekends Plans

Some plans offer free electricity during certain hours — typically 9 p.m. to 6 a.m. or on weekends. These plans often have higher rates during the paid hours and can be deceptive. The average rate per kWh, including the free hours, is usually competitive with a standard fixed-rate plan, but you must be disciplined about shifting usage. If you run the air conditioning during the paid hours, the savings disappear.

The Boerne area has a slightly different electricity landscape than the broader deregulated market. The City of Boerne operates its own municipal electric utility, which serves most of the incorporated city limits. Outside the city limits — in unincorporated Kendall County, Fair Oaks Ranch, and much of the surrounding Hill Country — residents are served by the deregulated market and choose their own REP.

Every Texas electricity bill includes a transmission and distribution (TDU) charge, which is the fee the local utility charges to deliver electricity over its poles and wires to your home. This charge is set by the TDU and approved by the Public Utility Commission of Texas. It is not negotiable, and it is the same regardless of which REP you choose.

In the Boerne and Hill Country area, the TDU charges depend on your specific location. For homes served by CPS Energy (a municipally owned utility serving San Antonio and portions of the Hill Country), the TDU charge is included in the overall rate structure. For homes served by the City of Boerne's municipal utility, the fee structure is set by the city. For homes in deregulated areas served by other TDUs, the charge is itemized on every bill and typically ranges from $8 to $12 per month plus a small per-kWh fee.

The important point: the TDU charge is a pass-through that your REP cannot control. When comparing electricity plans, look at the total price per kWh, not just the generation charge. The EFL will show the total price including TDU fees.

The Hill Country summer runs from roughly May through October. During this period, air conditioning is the dominant electricity load. A 2,000-square-foot home with a 10-12 SEER air conditioning system will draw approximately 3,000 to 5,000 kWh per month during peak summer months. A newer home with a 16-18 SEER system and good insulation may draw 1,500 to 2,500 kWh per month.

Winter heating loads are comparatively modest. Most Hill Country homes use natural gas for heating, which is significantly cheaper than electric resistance heating. Electric heat pumps are becoming more common in newer construction but still represent a minority of homes. The winter months (November through February) typically see the lowest electricity bills of the year.

For California relocators accustomed to relatively mild summers, the seasonal swing in electricity bills can be surprising. A home that costs $130 to heat in January may cost $350 to cool in August. Budgeting for this seasonal variation is important — especially if you lock into a fixed-rate plan with a budget billing option that averages the annual cost into 12 equal payments.

Winter Storm Uri in February 2021 was the most significant grid reliability event in Texas history. A prolonged period of below-freezing temperatures caused widespread generation failures — natural gas plants froze, wind turbines iced over, and coal plants experienced coal pile freezing. ERCOT was forced to implement rotating outages that affected approximately 4.5 million Texas homes, some for days. The estimated economic cost exceeded $200 billion, and the event resulted in hundreds of deaths.

Since Uri, the Texas Legislature and the Public Utility Commission have implemented several reforms:

• Winterization mandates: Senate Bill 3 (2021) and subsequent rules require generation facilities to weatherize against extreme cold and heat. The PUCT can fine generators that fail to meet winterization standards, up to $1 million per violation.
• Incentives for reliability: The Texas Energy Fund, created in 2023, provides low-interest loans and grants for new dispatchable generation capacity (natural gas, battery storage, and other sources that can be called on demand).
• Improved weather forecasting: ERCOT has enhanced its weather integration and now issues more frequent operational alerts during extreme weather events.
• Expanded emergency response: The Public Utility Commission has broader authority to order load reduction and coordinate emergency response across utilities.

The grid has performed better during subsequent cold weather events — Winter Storms Mara and Landon in early 2023, and Winter Storm Gerri in January 2024 — without widespread outages. However, ERCOT continues to issue conservation appeals during peak demand events, particularly in summer when air conditioning loads push the grid near its reserve margin.

For California relocators, the practical takeaway is that the Texas grid is more resilient than it was in 2021, but it is still a self-contained system with inherent vulnerability to extreme weather events. A home backup generator, battery storage, or both is a reasonable consideration for any Hill Country property — particularly for homes on well water, where a power outage means no water pressure.

Texas has some of the most favorable conditions for residential solar in the United States. The Hill Country receives an average of 220 to 230 sunny days per year, with annual solar irradiance of approximately 5.0 to 5.5 kWh per square meter per day. That is comparable to Southern California and slightly better than the Bay Area.

Texas offers a property tax exemption for the appraised value added by a solar installation — meaning your property taxes do not increase when you install solar panels. There is no statewide rebate program, but some local utilities and REPs offer incentives. The federal Investment Tax Credit (ITC) provides a 30 percent tax credit on the cost of installation, available through 2032.

Net metering in Texas is not guaranteed by state law, unlike California's regulated net metering policies. Instead, it is determined by individual REPs. Some providers offer net metering at the retail rate; others offer a lower wholesale rate or a buyback rate that is significantly less than the retail price. If you are considering solar, the choice of REP matters as much as the solar installation itself.

For California relocators accustomed to NEM 2.0 or 3.0, the Texas solar landscape is less regulated and more variable. The solar resource is excellent, but the financial return depends heavily on your electricity consumption patterns and the specific REP you choose.

Start the process before you close

In the deregulated market, you can choose your REP and plan before you take possession of the home. Most REPs require proof of occupancy and a move-in date, but you can set up service a week or two in advance. Do not wait until closing day — the last thing you want is to move into a house with no power in July.

Use comparison tools, but verify the EFL

Websites like PowerToChoose.org (the official PUCT marketplace) and EnergySage allow you to compare plans side by side. Always request the Electricity Facts Label for any plan you are considering. The advertised rate often assumes a specific usage level (typically 1,000 or 2,000 kWh per month). If your usage is higher or lower, your effective rate will differ.

Pay attention to the contract term

Twelve-month plans are the most common and offer a good balance of rate stability and flexibility. Longer terms (24 or 36 months) may offer slightly lower rates but lock you in with an early termination fee. If you are buying a home with the intention of staying for years, a longer fixed-rate contract makes sense. If you are renting first or uncertain about your timeline, a shorter term or a month-to-month plan is safer.

Seasonal bill averaging

Many REPs offer budget billing or levelized payment plans that average your annual usage into 12 equal monthly payments. This eliminates the seasonal bill spike and makes budgeting more predictable. The downside is that you may owe a true-up balance at the end of the year if your actual usage exceeds the estimate. Budget billing is a good option for anyone who prefers predictable monthly bills over seasonal savings.

Consider a home energy audit

Hill Country homes built before 2010 often have insulation levels, window efficiency, and duct sealing that are adequate for Texas but not optimal. A home energy audit can identify the most cost-effective improvements — attic insulation, duct sealing, radiant barrier, or window replacement — that reduce summer cooling loads. The payback period for these improvements is typically 2 to 5 years in the Hill Country climate, faster than in most regions.