Recent policy discussions at the Public Utility Commission of Texas (PUCT), along with stakeholder commentary and industry analysis on the Texas Backup Power Program (TBPP), signal a meaningful shift in how the state is approaching resilience.
Texas is moving to ensure critical facilities stay powered during outages. However, in doing so, it may be limiting how those same assets can support the grid itself.
This perspective is shaped by:
- The finalized PUCT rulemaking around the Texas Backup Power Program (TBPP)
- Ongoing ERCOT reliability discussions tied to load growth and system stress
- Industry analysis highlighting how program restrictions impact system-wide reliability
What the Program Gets Right
The intent behind TBPP is clear and necessary.
- It creates a pathway to fund backup power at critical facilities
- It prioritizes continuity of operations during outages
- It reflects lessons learned from past grid events
These are important steps forward for resilience at the facility level.
Where the Policy Creates Friction
However, the structure of the program introduces a clear limitation.
Under the current framework and as discussed in recent policy updates:
- Backup systems funded through TBPP are restricted from market participation
- They are prohibited from providing grid services
- They are not allowed to reduce demand in a way that supports the broader system
This creates a disconnect between resilience investment and grid functionality. In practical terms: Assets designed to operate during outages are not allowed to help reduce the likelihood or severity of those outages.
Why This Matters Now
This issue is emerging at the same time Texas is facing:
- Significant projected load growth
- Increasing pressure on transmission and generation
- A growing need for faster, more flexible solutions
These dynamics are being actively discussed in ERCOT and PUCT proceedings, where demand response, flexible load, and distributed resources are increasingly viewed as part of the solution set.
At the same time, TBPP-funded assets—while technically capable—are being structured to operate outside of that system.
The Core Policy Tradeoff
The current structure appears to prioritize a clear separation:
- Backup power = facility protection
- Grid resources = market participation
But the emerging reality is that modern energy systems can do both.
Distributed assets—including backup systems, microgrids, and controllable load—can:
- Support local resilience
- Reduce grid demand during stress
- Provide system-level benefits if allowed to participate
When policy prevents that interaction, it limits the value of those investments.
We Need A More Aligned Approach
The question is not whether to invest in backup power. It is whether those assets should remain isolated—or be allowed to contribute when the grid needs them most.
As ongoing discussions across ERCOT and the PUCT continue, there may be future opportunities to evaluate:
- Whether limited demand reduction could be allowed during system stress
- How certain distributed assets might safely interact with grid operations
- How policy can better align resilience goals with system-wide reliability needs
Why TRC Engagement Matters
This is exactly the type of issue where stakeholder input shapes outcomes.
As reflected in recent hearings and policy discussions, decisions are still being refined in real time, and perspectives that are clearly communicated early tend to carry the most influence.
For the Texas Reliability Coalition, this moment reinforces the need to:
- Ensure community-level solutions are represented
- Advocate for scalable, grid-supportive infrastructure
- Align policy with how energy systems actually operate
Final Thought
Texas is investing in resilience. That is the right move.
But resilience should not be built in isolation.
If the state continues to deploy distributed energy assets, those assets should be positioned to support both the facility and the grid—not just one or the other.
Get Involved
The policies being finalized today will shape how resilience is built across Texas.
TRC members have a direct role in ensuring those policies:
- Reflect real-world operations
- Enable scalable solutions
- Support long-term grid reliability
