Tesla can now sell electricity to Texans: Here’s how it could work

Business

AUSTIN (KXAN) — There may soon be a new seller in Texas’ energy market.

The Public Utility Commission of Texas has approved an application from Tesla Energy Ventures, LLC, to be able to provide retail electricity “throughout the area served by the Electric Reliability Council of Texas (ERCOT),” according to the application.

That means the company can sell its energy to residential or business customers in places like Dallas-Fort Worth or Houston, but not to municipal or co-op areas like Bluebonnet, Pedernales, or Austin Energy service areas, says David Tuttle, research fellow at the University of Texas at Austin’s Energy Institute.

The company first filed its application on Aug. 16. In it, the company says it will target current Tesla customers through its mobile app and Tesla’s website.

“In addition to the Tesla mobile application and Tesla website, the applicant’s existing Tesla Energy Customer Support organization will be trained to provide support and guidance to customers in customer acquisition efforts,” the application reads.

“I think it’s fair to speculate that Tesla, since they make and install solar panels and batteries, that that’s going to be the core technology,” Tuttle says.

Some of that Tesla Energy solar technology is already being used in Austin.

Earlier this summer, the company partnered with two others — Dacra and Brookfield Residential — to build solar-powered homes in southeast Austin’s Easton Park, featuring Tesla solar roofs, Powerwall systems and electric car charging stations.

A Tesla Powerwall
According to its website, Tesla’s Powerwall is “a compact home battery that reduces your reliance on the grid by storing your solar energy for use when the sun isn’t shining.” (Photo courtesy Tesla)

“My first instinct was, ‘Wow, that’s awesome and that’s great to be in a neighborhood that’s kind of on the edge of trying new things,'” says John Miller, who lives in the neighborhood.

He and his husband, Mike Yager, moved in March 2020 before the Tesla home announcement.

“This world-class solar technology will produce sufficient energy to power the average home, reduce demand on local energy grids, and provide back-up power with Tesla Powerwall in the event of an outage,” the website reads.

Tuttle explains that with the PUC’s approval, it means that Tesla can now take that energy and use it as part of a virtual power plant (VPP).

According to filings with the PUC, Tesla explains that a VPP is a network of solar and battery systems that work together to generate and store energy for homes on-site, and pump extra power back into the grid. The company cites the South Australian government for the explanation.

“We don’t have the Tesla virtual power plants that they’re experimenting around in other regions right now,” Tuttle said. “That’s what they’re bringing with this new announcement and with this new strategy in our state.”

Tuttle says over time, as the company figures out how to make the system more efficient and profitable, they’ll be able to scale it and become a competitor with other energy companies, bringing down costs for consumers.

He also says it may become a viable option to help lessen the load on the grid during severe events, like winter storms.

“Over time, as it grows, it can have a meaningful effect — a positive effect — in being yet another diversified energy source,” Tuttle said.

The filings indicate that Tesla started a VPP system in California earlier this summer, “in response to the impact of record high temperatures and severe droughts on [California Independent System Operator] electric demand and generator availability.”

California Independent System Operator oversees the state’s power system and electricity market, according to its website. Tuttle said that is California’s ERCOT equivalent.

Tesla is also doing the same in Vermont, according to the documents.

“Tesla optimizes dispatch of 1800+ household batteries on behalf of Green Mountain Power, to provide
backup power, grid peak shaving, T&D cost reduction, and wholesale market revenue,” the document reads.

Miller and Yager say they see the benefits of solar.

“I think probably the biggest immediate positive for solar in a selfish sense, is in the sense of a disaster,” Miller said.

But the two want to wait to see how the VPP system plays out before they’d consider joining.

“I think competition is good, especially in a public utility. It has the possibility of driving prices down, provides alternatives and options for homeowners,” Yager said.

KXAN has reached out to ERCOT and Tesla for comment but has not yet received a response.

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