In “Wiring America,” EPIcenter affiliate Gaurav Doshi analyzes how Texas’s CREZ high-capacity transmission build-out curbed the market power of fossil-fuel generators. Using a two-stage empirical strategy, the study first shows that CREZ reduced wind curtailment, adding roughly 0.11 GWh of additional wind during peak hours and 0.22 GWh at the off-peak – and then demonstrates that each extra GWh of wind lowered price-cost mark-ups, most sharply at the 4 PM peak hours (by about $9/MWh). Counterfactual simulations show that these lower markups reduced excess generator rents by $215 million to $450 million per year. Beyond cheaper wholesale prices and a leaner dispatch order, CREZ improved reliability, reduced emissions, and strengthened incentives for further renewable investment. Combining rigorous economic modeling with rich ERCOT data, the paper underscores how strategic transmission expansions can limit market power and accelerate the clean-energy transition.
This summary was written with the assistance of Microsoft Copilot on July 8th, 2025. Its content was edited and verified by EPIcenter staff and affiliates.
Read the full paper here.