The Electric Reliability Council of Texas (ERCOT) formed in 1970, is one of eight Independent System Operators in North America, and is the successor to the Texas Interconnected System (TIS). TIS originally formed in 1941 when several power companies banded together to provide their excess generation capacity to serve industrial loads on the Gulf Coast supporting the U.S. war effort for World War II. ERCOT is one of nine regional electric reliability councils under North American Electric Reliability Corporation (NERC) authority. NERC and the regional reliability councils were formed following the Northeast Blackout of 1965. ERCOT's offices are located in Austin and Taylor, Texas.
The ERCOT region occupies the entire Texas Interconnection, which occupies nearly all of the state of Texas. Unlike the other major NERC interconnections, the high voltage transmission and energy market within the Texas Interconnection is operated by ERCOT as essentially a single power system instead of as a network of cooperating utility companies. The portion of the electric grid in the State of Texas that is under the administration of ERCOT was – and remains – essentially unconnected to electrical grids in other states and, in the absence of "electricity in interstate commerce," does not fall under federal regulation. [1]
Tierney, Susan (2008). ERCOT Texas’s Competitive Power Experience: A View from the Outside Looking In. Boston: Analysis Group, Inc.. pp. 68. http://www.analysisgroup.com/uploadedFiles/Publishing/Articles/Tierney_ERCOT_Texas_study_11-08.pdf.