With the winter quickly approaching, the leaders of the Public Utility Commission of Texas and the head of ERCOT are saying the grid is prepared to handle higher power demand during the cold weather season.

The state’s main electric grid operator on Tuesday released its Seasonal Assessment of Resource Adequacy report for the winter, which is designed to provide a forecast of how the grid will operate under different system conditions.

Here is what you need to know about the most recent Seasonal Assessment of Resource Adequacy report:

What the report says

In its report, the state’s main grid operator considers weather data from previous years and population growth, to determine how many megawatts of power homes and businesses might demand.

Different levels of demand are labeled “forecasted, high and extreme” to consider different scenarios the ERCOT grid might face during the cold season.

In its report, ERCOT estimates how much electricity will be available to meet that demand by listing how many megawatts of power can be produced, including energy from wind, solar, fossil fuel sources and nuclear power plants.

A megawatt of electricity can provide power to “about 200 Texas homes during periods of peak demand,” according to ERCOT.

The number of megawatts that ERCOT expects to be available is affected by multiple variables, including unplanned outages at power plants or low wind conditions.

The ERCOT report is designed to show the “range” in the megawatts that could be available under different demand and resource scenarios. If the needed megawatts outpace the energy available resources in the grid, rolling blackouts could be possible.

What the forecast is for the winter

ERCOT has estimated a peak energy demand of 67,398 megawatts during the winter months. The state’ main grid operator expects about 87,300 megawatts to be available during times of peak demand.

That peak is based on “average weather conditions at the time of peak demand from 2007 through 2021,” according to the SARA report.

If there is a “high” peak load —the need for about 9,900 additional megawatts of power— the demand on the grid would be over capacity by 25 megawatts with the forecasted number of power plant outages, according to the report. Texas energy industry analyst Alison Silverstein, said a 25-megawatt shortage would not likely lead to rolling outages.

ERCOT could make up that shortage by asking certain facilities to reduce power usage, Silverstein said.

In the case that there is “extreme” demand for power — 12,677 additional megawatts — the ERCOT grid would be 1,897 megawatts over capacity, increasing the likelihood that the grid operator would start rolling outages.

What are the heads of ERCOT and PUC saying

During a news conference held Tuesday to discuss this year’s winter SARA report, the heads of ERCOT and the Public Utility Commission of Texas expressed confidence in the state’s main grid throughout winter.

“Let me be clear that the actions that we’ve taken over this last year and a half position us as best as we have been to operate the grid reliably,” said Pablo Vegas, the CEO of ERCOT. “We expect through the forecast and the likely scenarios that we’ll see over the course of this winter to be able to have enough supply to meet the reliability needs across the grid.”

Peter Lake, Chairman of the Public Utility Commission of Texas, said that the grid is well prepared for winter, pointing to improvements to operations following the deadly February 2021 winter storm, when millions in the state lost power and more than 200 Texans died.

“In the past 18 months, because we’ve had these reforms in place, we have avoided emergency conditions or blackouts eight times — we know the reforms are working, we’ve seen the results and we’re going to continue with those reforms,” Lake said.

Silverstein, who previously served as an adviser the utility commission, said she recognizes the work by PUC and ERCOT to improve the grid after the February 2021 storm.

Winterization of power plants, which include wrapping insulation around equipment, will help prevent weather-related damage and outages. The new firm fuel supply service ensures, through contracts with pipelines, that natural gas flows to plants when they need it, Silverstein said.

Costs for winterization and new measures like the new fuel supply service ultimately get passed down to consumers, but they are an “appropriate necessity.”

“These are important ways to help keep the lights on in the winter,” Silverstein said.

Moving forward

More needs to be done to improve long-term reliability in the ERCOT grid, Silverstein said.

Demand for power will continue to balloon in Texas with continued population and business growth in the state, as well as other factors like the increase of energy used by crypto-mining operations.

“I think they’re in a very difficult position,” Silverstein said of Lake and Vegas. “Their jobs are to be very confident about the grid and the people who appoint them and the people whom they keep the lights on for want to hear that everything is fine on the grid and that we have confidence.”

Lt. Gov. Dan Patrick has said that he will push for more natural gas power plants to be built in the state to improve grid reliability.

“Whether it is incentivizing them, whether it’s building them, whatever the plan is, I personally cannot see myself leaving this building knowing that another (winter storm) Uri can happen,” Patrick said.

Silverstein said solutions cannot be focused solely on building natural gas plants to increase supply. She said state regulators must also keep their eye on demand-side solutions.

Solutions for reducing demand in the grid system can be done through investing more heavily into energy efficiency. Regulations to make sure that crypto-mining operations are doing their fair share to decrease electricity usage when there is a high or extreme level of demand in energy could also contribute to reliability.

“The reality is we can’t build new gas plants that fast,” Silverstein said. “We can get a whole lot of energy efficiency and a whole lot of demand response on the same schedule that we can get new gas plants.”