“This drought has been the most intense one-year drought in Texas since at least 1895 when statewide weather records begin, and though it is difficult to compare droughts of different durations, it probably already ranks among the five worst droughts overall. The statewide drought index value has surpassed all previous values, and it has been at least forty years since anything close to the severity of the present drought has been experienced across Texas.”
— John W. Nielsen-Gammon, Texas State Climatologist (Briefing on the 2011 Drought)

“Failure to consider the interdependencies of energy and water introduces vulnerabilities whereby constraints of one resource introduce constraints in the other. That is, droughts and heat waves create water constraints that can become energy constraints, and grid outages or other failures in the energy system can become constraints in the water and wastewater sectors.”
— Energy – Water Nexus in Texas, The University of Texas at Austin with Environmental Defense Fund

Texas’ demand for electricity continues to increase.  At the same time, there is an expectation that increased heat and extended or repeated drought will continue for many years.  This combination requires Texas to explore ways to ensure we continue to have enough water and power to maintain and expand our vibrant economy.

Texas experienced record heat and drought in summer 2011, and the electric grid came within 7/10ths of one percent of the capacity at which the grid operator, the Electric Reliability Council of Texas (ERCOT), would initiate rolling blackouts. ERCOT responded aggressively by alerting and informing market participants, the Public Utility Commission of Texas, and other state leaders about the seriousness of concerns with heat and drought and coordinating market responses to the extent possible. This proactive approach can and has reduced the probability of outages – but the potential for economic loss caused by generation outages related to heat, drought, or transmission outages related to wildfires, is still significant and real.

There also is a likelihood of more heat and water stress in Texas’ future, and the longer term effects of any reliability failures or power instability on the Texas economy. Action is needed to protect Texas’ reputation as a premiere state for businesses to set up, operate, and expand.


As Texas develops and implements plans to address near and long-term power and water needs, there are a number of solutions that not only benefit the state’s competitiveness, but also help keep our power costs low even as our population and demand for electricity continue to grow.

  • Energy efficiency is the improved use of electricity that reduces demand or consumption but provides the same or higher level of end-use service, while frequently increasing comfort and productivity.  Energy efficiency benefits Texans by reducing waste in energy, reducing energy bills for Texas businesses and residents, reducing emissions, and reducing water use in electric generation.
  • Demand response is the capability to temporarily reduce or shift load in response to a particular signal, either from a coordinating entity like ERCOT or from a market price.  Demand response can benefit both retail and wholesale participants in the market by reducing consumption during periods of high wholesale and, potentially, retail prices.
  • Distributed renewable energy resources, such as solar photovoltaic panels, not only reduce demand on the grid, but also reduce the amount of water used to generate electricity.
  • Water conservation has the benefits of reducing waste of this precious resource, reducing water bills for businesses and consumers, and reducing energy requirements for water and wastewater treatment and pumping.

All of these strategies cost-effectively reduce economic risks associated with increasing electric demand relative to available generation capacity and water stress, a measure of an imbalance of water demand and available water resources.  There is increasing global concern with water stress and power availability, which in turn is driving a growing global market for leading technology solutions.  Programs that spur energy efficiency and other clean tech solutions also have the effect of reducing emissions and supporting strategic economic development.