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Elon Musk Is Getting Into the Texas Electricity Business

Image for article titled Elon Musk Tells Texas to Come and Take It! (His Electricity)

Photo: Patrick Pleul (Getty Images)

Tesla might be best known as a company that pumps out (with a few exceptions) electric vehicles, but it looks like it might be selling electricity straight to the people pretty soon.

That’s according to a new report in Texas Monthly detailing Elon Musk’s newly instated subsidiary—Tesla Energy Ventures—that just filed with Texas’s Public Utility Commission to sell electricity straight to the residents in the state. Details on the project, which was formally registered on Aug. 17, are pretty thin right now; but we know that it’ll be helmed by Tesla’s director of regulatory credit trading Ana Stewart, and flanked by its current lead of energy and charging products, Rohan Ma.

According to the PUC filing, Tesla’s plan for the new venture is to target its current customers throughout the state. And undoubtedly, there are going to be some Tesla die-hards in Texas that are looking for an alternative in a state where the majority of the grid is powered by fossil fuels. That grid, you may recall, failed catastrophically during a February cold snap, leaving millions without power and hundreds dead. Subsequent peer-reviewed research has teased out the exact causes of the failure, and much of the blame rests at the foot of fossil fuel infrastructure that was unprepared for the weather, leading to widespread power losses right as people cranked up the heat. (Some Texans even turned to using electric vehicles that had been fully charged before the storm to stay warm.)

The fallout has come hot and heavy since then. Power providers across the state have come under fire from lawsuits for price gouging, regulators have been fired or resigned with abandon, and numerous utilities have filed for bankruptcy or sued the state’s energy grid regulator, ERCOT. Yet lawmakers have done basically nothing to help the situation, thanks to entrenched fossil fuel interests, and the grid once again teetered this summer.

In other words, there’s a pretty big gap in the Texas energy market right now that Tesla could fill. The state does have a healthy renewables industry, particularly when it comes to wind. Texans also have installed 1 gigawatt of small-scale solar capacity, but maximizing the panels that are there and beefing up storage and capacity further is essential to addressing the climate crisis. It could also improve electricity access, and trade unions have gone all-in on an all-electric future for Texas. (It could also, of course, be a way for Tesla to make money.) 

In March, another Tesla subsidiary called Gambit Energy Storage started work on a new energy storage facility based out of the suburban city of Angleton, Texas. The facility, when it’s finished, is essentially a massive battery that could plug directly into the Texas grid and power 16,400 homes in the state.

Musk’s company has also scaled up energy storage systems in Australia as well. Tesla built a utility-scale battery storage facility and created a virtual power plant” that allows customers with rooftop solar and Powerwalls in their homes to act as a network to move and store electricity. The venture in Texas could mirror those efforts, with Texas Monthly noting the PUC filing shows Tesla will approach existing customers.

Last year, Musk told investors that he thought Tesla’s energy business rival the company’s electric car ambitions. “I think long-term Tesla Energy will be roughly the same size as Tesla Automotive,” he said. “The energy business is collectively bigger than the automotive business.”

Musk doesn’t only have a professional relationship with the state, but a personal one, too, considering how he made a big show of his move down there at the end of last year (much to the chagrin of some Austin residents). If Tesla emerges as a power player in the state’s struggling energy market, Texans will be more willing to warm up to the guy. But if his power grid ambitions are anything like his robot plans, he could be setting himself facing a Texas-size disaster.

As usual, Tesla is unreachable for comment because it shut down its PR department last year.

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