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Tesla has applied to sell electricity in Texas

Caitlin Cosper
By Caitlin Cosper August 30th, 2021

Tesla applied to become an energy provider in Texas.

  • Tesla submitted an application to begin selling electricity to consumers in Texas.
  • Tesla Energy Ventures is a subsidiary of Tesla that would expand the company’s role in the energy industry. Tesla is known for selling its electric vehicles, solar panels, and solar batteries, but has not operated as an energy provider before.
  • After this February’s winter storms, the Texas energy industry is in flux. Several energy providers left the market after the storms and many Texans are concerned that the power grid is not reliable enough.

 

Tesla has applied to become a retail electric provider (REP) in Texas. The company filed an application with the Texas Public Utility Commission on August 16, 2021. If approved, Tesla will sell electricity to Texans living in deregulated areas. Approximately 85 percent of Texas has a deregulated energy market, including major cities such as Houston, Dallas, Fort Worth, and Arlington.

Entrepreneur Elon Musk created a new subsidiary of Tesla to break into the retail electricity market – Tesla Energy Ventures. However, Musk himself will not be leading Tesla Energy Ventures. Instead, the role of President is filled by Ana Stewart. Stewart brings a wealth of relevant experience in the energy industry, including working as a senior analyst and analyst for renewables portfolio management at Direct Energy, a retail electric provider (REP) that operates in Texas. If the Texas PUC approves the application, Tesla Energy Ventures will join the other 120 retail energy providers operating in the Texas deregulated market.

Tesla’s application states that it will use its existing Tesla Energy Customer Support as the point of contact for energy consumers. “The [Tesla Energy Customer Support team] has already established procedures and escalation paths in place to ensure timely action to customer inquiries. The Tesla Energy Customer Support organization will receive training on retail operations, procedures, and regulation to ensure adequate capability and effectiveness,” the application states.

Tesla also filed applications to the PUC to build several utility-scale battery projects in Texas. One is a 250-megawatt battery outside of Austin. The second is a 100-megawatt battery outside of Houston. This is not the first Tesla battery project in Texas that has turned heads. In March, Bloomberg reported on Tesla’s 100-megawatt battery project in Angleton, Texas, which marked the company’s first major move into the state.

Tesla’s application expands its existing role in the energy industry

Tesla is not new to the energy industry, particularly when it comes to the electric vehicle and solar energy realm. The Tesla Powerwall is a leading solar battery and the company also distributes and sells solar panels to residential consumers.

The Texas energy market is expanding in solar energy, currently ranking second in the country for solar power generation. If Tesla Energy Ventures is approved to sell electricity to consumers in Texas, it may also offer net metering programs to those who have Tesla solar products installed in their homes or businesses, allowing consumers to sell excess solar energy back to the power grid.

The risks within the Texas deregulated market

Moving into the Texas energy market as an electricity provider could be a risky move at the moment. In February, a major winter storm caused power generators across the state to fail, leaving millions without electricity in freezing temperatures.

The wholesale cost of electricity spiked to its limit – $9,000 per megawatt-hour. For context, the typical wholesale cost during that time was about $50 per megawatt-hour. Several energy providers purchasing electricity ended up in financially hot water because they had to sell the energy at a massive loss. Five REPs have left the Texas market since the February storms.

What’s more, the Electric Reliability Council of Texas (ERCOT) has continued to draw criticism since February for its management of the Texas power grid. This criticism even came from Musk himself, who tweeted in February that ERCOT was “not earning that R.”

On August 30, the PUC officially acknowledged that Tesla Energy Ventures’ application was complete and would move forward for further review. To read further details, check the application Tesla Energy Ventures submitted to the Texas PUC. You can also visit Texas Monthly, which broke the news of Tesla’s REP application last week, for more details on this story.

 

Caitlin Cosper – Energy Expert
Caitlin Cosper is a writer and editor within the energy industry, specializing in deregulation, energy efficiency, and solar power. Her writing and research have been cited by Snopes, The Washington Post, The American Solar Energy Society, and other major sources. Find more of Caitlin’s work at SaveOnEnergy.com and ChooseTexasPower.org.

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