Tesla is entering the energy supply business. The EV giant filed an application with the Public Utility Commission of Texas to make its subsidiary Tesla Energy Ventures a retail electric provider (REP) in the state. The company can begin selling electricity to residents as early as November if the application is approved. Tesla plans to use its existing energy division to help drive sales, focusing on customers who already own Tesla products.
Zoom Out: Texas has a deregulated power market, with more than 100 REPs purchasing wholesale electricity from power generators and competing to sell it to consumers on the open market. In February, winter storms shut down large portions of Texas’s power grid, leaving millions without electricity for days. Since the state’s grid is isolated from the rest of the country, system operators could not import electricity to cover the shortfall. Because of the storm, some retail electric providers shut down, and wholesale electricity prices rose from a seasonal average of $50 per megawatt-hour to $9,000. Right after in March, Tesla began a secretive 100-megawatt energy storage project in Angleton, Texas.
