Tesla subsidiary applies to PUC to join Texas’ electricity market
A subsidiary of Elon Musk's Tesla Inc., applied in mid-August to become an electricity retail provider on the state power market, according to filings with the Public Utility Commission of Texas.
While its application to the PUC did not include many specifics, the new subsidiary, Texas Energy Ventures, said it has about $1 million in assets as of mid-August and that it aims to sell renewable energy credits. Generators create one renewable energy credit when they put one megawatt hour of electricity onto the grid from a renewable energy source, which is enough electricity to power about 200 homes on a hot summer day.
Tesla Energy Ventures noted it already generates its own renewable energy credits in the state thanks to its existing solar infrastructure.
If approved, the new venture would expand Tesla's reach in Texas after founder Musk moved the company here in late 2020. Already, Musk's business empire has transformed Boca Chica, near South Padre Island, from a sleepy island town to a hub for launching spacecraft; is building utility-scale batteries near Katy and Austin; and broke ground on an electric vehicle factory near Austin, among other things.
Its brand recognition and ex
isting customer base could give the company a leg up on its dozens of competitors in Texas' crowded electric retail market, which now has more than 100 companies vying to provide rate payers with power.
That market could change dramatically in the coming months. The PUC and the Electric Reliability Council of Texas, which manages the state's power grid, announced in July that the agencies would work to overhaul Texas' power market and present a blueprint for the new model before the end of the year.
The coming changes stem from the freeze and subsequent blackouts in February that led to the deaths of more than 100 across the state and left millions without heat or lights during sub-freezing temperatures. Gov. Greg Abbott in June ordered the PUC and ERCOT to look for ways to improve the power system.
On Thursday, the PUC held a workshop with ERCOT officials, power retailers, electricity generators, municipal power agencies and large-scale power consumers to discuss potential changes. Among the most pressing issues, PUC commissioners said, was making sure there was reliable power throughout the state.
What remains to be determined is how improvements would be funded.
“Somebody’s got to pay for all of this,” said PUC Chairman Peter Lake.
Ed Hirs, an energy fellow at the University of Houston, said power retailers and generators will likely pass those increased costs onto rate payers.
“We can distill it all down to one thing: To get a reliable grid, we’re going to have to spend some money,” Hirs said. “And we’re going to have to do it quickly.”
Texas Monthly first broke the news that Tesla was seeking to enter the power market.