ERCOT vs. Xcel Energy: Here's what you need to know about these power suppliers

In light of recent news regarding the state's power grid run by the Electric Reliability Council of Texas (ERCOT), Xcel Energy wants to assure the Texas Panhandle community that their situation is much different.

Although the rise in power usage due to summer's triple-digit temperatures may affect supply and demand for electrical energy, this is not likely to result in power outages or rolling blackouts in the Amarillo area like those previously seen throughout the state.

According to Wes Reeves, Senior Media Relations Representative for Xcel Energy of Texas and New Mexico, this is due to the fact that the Panhandle area is on a different power grid than the one the majority of the state uses.

"We are part of the Southwest Power Pool that is managed by the market and is within the eastern inner connections, so all these utilities within the Southwest Power Pool are connected beyond. So we are really connected to as far back as the Atlantic Coast, if you really think about it. We are an interstate system and move power beyond state lines, whereas ERCOT does not move power beyond the state of Texas," Reeves said.

As previously reported, ERCOT has issued warnings indicating electricity shortages and potential outages, or brownouts related to these shortages during extreme weather events, such as the winter freeze in February 2021. Although many of these warnings are common for ERCOT during the summer months, there has been an unusual rise in power usage than expected, due to the warm and cold weather changes occurring across the state.

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ERCOT manages the flow of electric power to about 26 million Texas customers – representing about 90 percent of the state’s electric load. By comparison, across 14 states, Xcel Energy serves more than 3.7 million electric customers and 2.1 million natural gas customers in the country. That includes approximately 276,000 people in Texas.

ERCOT is an independent system operator, membership-based nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature.

The state power issues are occurring because ERCOT’s “retail choice” market was formed after legislators passed laws permitting markets to set the wholesale electricity price and allowing customers to choose their providers. Generators in ERCOT sell electricity on a wholesale basis only. Retailers purchase that electricity, and customers choose which retailer they would like to purchase electricity from. Due to ERCOT providing this form of service, they do not have power reserves like those that Xcel utilizes.

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Xcel Energy stated in a news release: "Xcel Energy is a fully regulated and vertically integrated utility, meaning it both generates and delivers electricity to homes and businesses it serves. While Xcel Energy in Texas and New Mexico is not subject to retail choice, our customers do benefit from competitive market prices in the Southwest Power Pool. Our long-term planning and investments have managed to keep electricity reliable and energy prices affordable for customers."

According to Reeves, the current power supply issues with ERCOT are less likely to happen in our area due to Xcel's reserves and ability to adjust power pulls.

"Even though we do have more of a reserve margin, anything can happen and we have had cases in our region where we have had a tight power supply, but Southwest Power Pool manages the market and they also dispatch the power plant. ... We have times where we also might be tight, but I think the big difference is that we have a little bit more cushion than what ERCOT has. That doesn't mean we are immune from any similar issues; it's just we have a different market and are not as likely to have these issues here in the area that we serve," Reeves said.

This article originally appeared on Amarillo Globe-News: Xcel Energy not tied to ERCOT or Texas' power supply problems