ERCOT ranked D- for Texas power grid planning, among nation's worst according to report

AUSTIN, Texas - The Electric Reliability Council of Texas (ERCOT), which manages power for about 90% of the state’s electric load, received a D- grade in 2025, according to a Feb. 2025 transmission planning report by Grid Strategies and the nonprofit advocacy group Americans for a Clean Energy Grid. 

Texas' D- grade for its electric transmission planning and development, ranks among the lowest-performing regions in the country as electricity demand from data centers, industry and population growth accelerates.

Texas D- for grid planning

What they're saying:

The grade reflects weaknesses across multiple categories, particularly Texas’ lack of interregional transmission planning and limited long-term, scenario-based grid planning, the report said. 

This is because Texas operates its own electric grid through ERCOT, which connects more than 54,000 miles of transmission lines and over 1,200 generation units, but is largely isolated from the rest of the U.S. power system. 

"Across most regions, interregional coordination relies on reliability-focused studies rather than proactive, scenario-based planning with durable selection and cost-allocation frameworks. As a result, interregional transmission remains one of the weakest elements of the national planning landscape, with planned capacity generally falling short of estimated need."

ERCOT’s isolated grid and challenges

Since the Texas grid is electrically separate from the Eastern and Western interconnections, the report cites ERCOT’s failure to routinely plan transmission links with neighboring regions, limiting the state’s ability to import or export power during extreme weather or system emergencies.

Dig deeper:

Texas’ transmission planning has also relied heavily on reliability-only studies rather than long-term, multi-scenario planning that accounts for future energy demand changes, extreme weather and economic benefits, the report said. 

Indicating that many large transmission projects approved in Texas are developed to address immediate reliability needs, rather than as part of a comprehensive planning framework. 

The delayed Permian Basin Reliability Plan

The report cites the Permian Basin Reliability Plan that was approved in Oct. 2024 to maintain reliability and connect significant electronic loads in the Permian Basin, primarily based on recent studies of oil, gas and data center loads, as well as address load growth in eastern Texas.

When that plan was released in July 2024, it identified two options; a 345 kV portfolio and a 765 kV portfolio. The Public Utility Commission of Texas (PUCT) approved the plan just three months later. 

The plan was passed without a decision on which portfolio to use until April 2025, highlighting transmission projects that were planned largely in isolation and do not include a full assessment of long-term benefits over the lifetime of the infrastructure.

"Accelerating demand growth is compressing planning timelines and raising the stakes for regions that continue to rely on reactive approaches," the report said, noting that Texas’ current planning practices may not be sufficient to maintain reliability and control costs over the long term.

Comparing Texas’ progress to national standards

Big picture view:

While Texas showed some progress in regional transmission development within the state, those efforts were not enough as the report assigned Texas a C for regional planning, an F for interregional planning, a B for stakeholder engagement, and a C- for outcomes, producing an overall D-, a drop from the state’s D+ rating in 2023.

Nationally, the report found modest improvements in transmission planning in several regions following federal reforms adopted for the purpose of innovating in regional planning. But the report warns that regions relying on incremental or siloed approaches, including Texas, risk falling further behind as electricity demand surges.