Sleet and ice cover the Circle C Ranch neighborhood in Southwest Austin on Sunday, Jan. 25, 2026.
Jay Janner/Austin American-Statesman
Austin may have avoided major power outages during the most recent winter storm, but a fully maintained distribution system isn’t the reason.
Austin Energy told the City Council earlier this month that it was forced to cancel or delay about a quarter of its planned transmission line maintenance projects over the past four months because the grid could not safely handle taking those lines out of service.
Article continues below this ad
Austin Energy worker Louie Montoya tests a bulb while constructing the 59th Annual Zilker Holiday Tree in Zilker Park on Tuesday, Oct. 21, 2025. About 25 workers with Austin Energy and MasTec spent the day transforming the historic moonlight tower into a 155-foot-tall holiday tree with more than 3,000 red, yellow, green and blue LED light bulbs. A double star tops the display, measuring 10 feet from point to point. The tree lighting ceremony will be November 30 at 6 p.m.
Jay Janner/Austin American-Statesman
“Whether it’s delayed or it’s canceled, it essentially says we can’t do the work that we need to either maintain our system or upgrade it to prepare for future growth,” said Austin Energy Deputy General Manager Lisa Martin, calling the situation “another flag saying we need to take a call to action.”
The projects would have temporarily shut down transmission lines for repairs or upgrades. But engineers found that removing those lines would have overloaded other parts of the system, raising the risk of equipment damage and unexpected outages. Postponing the work, however, creates its own problems: a grid that is harder to maintain and potentially more vulnerable to longer and more frequent outages over time.
At the center of the problem, utility officials say, is a shortage of locally generated power.
Article continues below this ad
Austin Energy relies on a mix of electricity imported from across the state and power generated closer to home, including rooftop solar, residential batteries and natural gas plants within or near the city. During periods of extreme demand — such as severe winter weather — congested transmission lines make it harder to import electricity, increasing the city’s dependence on local generation to keep the lights on.
That reliance is only expected to grow as statewide energy demand rises and the grid continues to change, Martin said.
The lack of sufficient local generation also has cost implications for customers. When transmission constraints limit available pathways for electricity, Austin Energy may have to rely on more expensive generators to meet demand.
Article continues below this ad
“Essentially, when there’s not enough pathways, then they have to use a different generator to ultimately serve the need, and that comes at a higher cost,” Martin said.
Those higher costs are passed on to customers through the power supply adjustment rate on monthly bills. Large commercial customers are likely to feel the impact more acutely because a greater share of their bills is tied to that adjustment rate than residential or smaller commercial accounts.
The issue is further complicated by Austin’s plans to move away from coal-fired power. Mayor Kirk Watson said in 2024 that he wants Austin Energy to exit its share of the Fayette Power Plant by January 2029. The plant currently provides about 13% of the utility’s generation capacity.
Martin said closing the Fayette plant remains a “high priority” and acknowledged that doing so will make local generation even more critical to maintaining reliability and controlling costs.
Article continues below this ad
Austin Energy’s recently released 2035 plan also highlights the risk, noting that adding local, dispatchable generation would help protect customers from energy shortfalls and volatile market prices once Fayette is no longer part of the utility’s portfolio.
To address the shortfall, Martin said the utility is pursuing multiple strategies, including expanded rooftop solar and battery programs, requests for renewable energy proposals and continued investment in more efficient local power plants designed to operate during peak demand.
“Our community has told us time and again that they value reliability the most,” Martin said. “They also care a lot about affordability and environmental sustainability, so we have to balance all of those things and make sure we’re taking care of the most vulnerable. In the end, local generation solutions are key to meeting all of those objectives.”
Article continues below this ad