AUSTIN (KXAN) — With Texas headed into another summer of record-breaking heat forecasts, state lawmakers took steps to better coordinate billions of dollars in energy conservation programs amid warnings that power demand could outstrip supply as early as 2026.

The Electric Reliability Council of Texas (ERCOT) recently forecast that the state’s growing demand for power could surpass available energy supply beginning in summer 2026, with demand nearly doubling by 2030 due to population growth, extreme weather and large industrial users including cryptocurrency mines and data centers.

In response, the Legislature passed House Bill 5323, creating the Texas Energy Waste Advisory Committee to coordinate state programs that reduce energy waste and improve electric grid reliability.

“This legislation just helps all of Texas,” said State Sen. Kelly Hancock, R-North Richland Hills. “The legislation focuses on energy efficiency. It talks about reduction in electricity utilization across the state. After all, we are the largest employer in the state of Texas.”

The new committee will bring together eight state agencies including the Public Utility Commission, ERCOT and the State Comptroller’s office, to coordinate the existing funding for demand reduction programs across different agencies. The Texas Advanced Energy Business Alliance (TAEB) estimates in total the state spends more than $3 billion on these programs.

“We have millions of dollars across different state agencies, in state funding and in federal funding that are being directed towards demand reduction,” said Matthew Boms, executive director of the TAEB. “All these different programs are happening at different state agencies, but there’s no one really steering the ship.”

Currently, those programs could reduce peak demand by up to 4.5 gigawatts if properly coordinated, according to Boms. While that represents a small fraction of Texas’ 86-gigawatt peak demand, Boms said that “4.5 gigawatts could be the difference between a grid emergency and normal conditions” during extreme weather events. 

The coordination gap became apparent during Winter Storm Uri in 2021, when inadequate weatherization and resistance heating in multifamily homes contributed to grid failures.

“We still have a winter problem in Texas,” Boms said. “All the resistance heating that we have, especially in multifamily homes, are consuming a ton of energy during these winter storm events.”

ERCOT’s most dire forecast predicts energy supply could fall 6.2% short of peak summer demand in 2026, widening to a 32.4% shortage by summer 2029. The grid operator attributed much of the projected demand growth to cryptocurrency mining operations, data centers and artificial intelligence infrastructure.

Hancock acknowledged the challenge of balancing economic growth with grid reliability as Texas continues attracting energy-intensive businesses.

“Energy needs are going to grow across the state with the growth of AI and all that comes with it,” Hancock said. “What we’re trying to do here is lead as an example, both on maximizing energy efficiency, [and] reduction in electricity utilization.”

The advisory committee will meet quarterly and submit biennial reports to the Legislature starting December 2026. Members can designate employees to serve in their place, with administrative support provided by the Public Utility Commission.

Current state conservation programs save about four megawatts of power, which Hancock called important during tight grid conditions when “everybody pitches in and does their part.”

The bill takes effect Sept. 1, 2025, as Texas prepares for another summer of potentially record-breaking energy demand.

“If we want to prevent a future catastrophe from happening, this is exactly the kind of work that needs to happen,” Boms said. “We need our state agencies to be coordinating their efforts and not be working in silos.”