If Elon Musk gets his way, the people of Texas may soon count Tesla as one of its many electric utility options.
After the outage last winter that left over 200 people dead, the state is without question in need of more innovation and change in its power sector. But while Musk would undoubtedly bring change to the Texas’ power sector, it may not necessarily be for the better.
As a company, Tesla has a spotty track record. It has previously failed to meet customer expectations with regard to its electric vehicles and has had issues meeting production targets.
Given this past performance and the issues Tesla has experienced to date with its solar roof tile project, it is not unreasonable to question their ability to function as a retail electricity provider in Texas.
By Musk's own admission last month, Tesla — which he often refers to as an energy company — has made “significant mistakes” with the rollout of the product. They have left a lot to be desired from installation to estimating prices to even providing basic customer service.
The problem seems to lie with the expansiveness of Musk's portfolio. Put simply, he's trying to do too much at once.
Musk wants to bring faster internet to rural areas. Unfortunately, the equipment has been too costly, the service is spotty, and the customer service is nonexistent.
He wants to bring driverless vehicles to the market. but industry leaders, including him, have criticized his software for being inadequate. The autopilot software is even being investigated by the National Highway Traffic Safety Administration for safety concerns.
Each of these problems (and many more) would be enough to consume a CEO of all their time. But none of these services appear to be Musk's priority at the moment. His focus seems to be on trying to get his experimental SpaceX rocket into orbit after a year that included many missteps, including a violation of its FAA launch license.
With all he has going on, can anyone honestly expect Musk to give his utility company the time and care it deserves?
Even when he's partnered with municipalities and delivered a product, the results have fallen below expectations. For example, Las Vegas is welcoming its new "innovative" tunnel to its convention center.
Pitched as a high speed solution to traffic, Musk's company instead delivered an underground road for Tesla taxis to use. That is an accomplishment in and of itself. But it's certainly not what was sold to the public.
Regulators in Texas should take note. If Tesla does end up getting approval to be a utility the company will surely deliver something, but if past precedent is any indication it will likely fail to meet the promise of whatever extraordinary innovation is initially pitched to the state.
Reliability is at the heart of the recent push to expand utility options in the state. Lingering issues that have been prevalent with other Tesla products should be enough of a red flag to make consumers think twice.
To be fair, the company chose "Gambit" as the name for its Texas grid operation, so one would imagine they are aware at some level of the risk involved with this project.
Texans have seen what catastrophic failure looks like in the utility sector. They never want to see it again.
If Tesla wants to enter the market, let it. But consumers should be wary of any big promises, and regulators should keep a close eye on its operations.
The state regulatory board has until November to respond to Tesla's request. Let's hope they keep them honest and do their homework before making a final decision.
George Landrith is the President and CEO of Frontiers of Freedom, a public policy think tank devoted to promoting a strong national defense, free markets, individual liberty and constitutionally limited government. To learn more about Frontiers of Freedom, visit www.ff.org. Read George Landrith's Reports — More Here.