Texas is a major energy hub, home to a unique energy procurement landscape shaped by its deregulated market and diverse energy resources.
For new businesses or businesses looking to increase sustainability, reduce costs, or simply have more insight into and control over their energy consumption, the market can be challenging to wade through.
Key Characteristics of the Texas Energy Market
Knowing the major influencing factors that affect the Texas energy market can help you determine the best approach to procurement for your business:
Deregulation
Texas is one of the largest deregulated energy markets in the U.S., offering consumers freedom of choice between the more than 130 retail electricity providers (REPs) in the state.
The Electric Reliability Council of Texas (ERCOT)
ERCOT handles about 90% of Texas’ electrical load, managing the flow of electric power to more than 27 million customers. Beyond operating the grid, ERCOT is responsible for maintaining system reliability and facilitating a healthy deregulated electricity market.
Access to Diverse Energy Resources
Texas boasts access to abundant resources. Main sources of net generation include natural gas, coal, wind, solar thermal and photovoltaic, and nuclear, which contribute to a diverse energy mix.
Price Volatility
Texas’ energy market experiences price fluctuations due to weather extremes, grid reliability issues, rising fuel costs, and supply and demand challenges.
Focus On Reliability
The state has been under scrutiny following the February 2021 winter storm which left millions of Texans without electricity. Since then, there’s been an increasing emphasis on maintaining grid reliability and resilience.
Renewable Energy Growth
Texas is a leading state in renewable energy adoption, making significant investments in wind and solar power. In 2023, the state led the nation in utility-scale wind-powered electricity generation and was the country’s second-largest producer of solar power.
Procurement Strategies for Texas Businesses
With those key market characteristics in mind, effective procurement strategies revolve around risk assessment and management, increasing energy efficiency and long-term planning:
Risk Assessment
This crucial part of an effective procurement strategy is particularly important for Texas businesses, given market volatility and increasing inclement weather.
EnerConnex can help pinpoint areas of vulnerability and develop strategies to mitigate them to protect your finances and help you make more informed decisions.
Diversification
With ample access to a variety of energy sources, Enerconnex can help your business create a healthy energy mix to reduce reliance on any single fuel type.
Energy Efficiency
Our experts can help your Texas business improve energy-saving measures to reduce consumption and costs — whether through demand management, renewables, ongoing upgrades to lighting and HVAC, or all of the above.
Contractual Flexibility
Explore various contract options with different suppliers that offer the flexibility required to adapt to Texas’ evolving market conditions.
Long-Term Planning
Our supplier network is unmatched. We can help you develop a long-term energy procurement strategy that’s aligned with your business goals and sustainability objectives.
Expert Energy Procurement in Texas
Is your Texas-based business in need of an energy strategy overhaul? Learn more about EnerConnex Energy Procurement services, and, when you’re ready to optimize your energy strategy, contact us!
