Question: A recent article by the [Texas Tribune](https://www.texastribune.org/2011/02/08/texplainer-why-does-texas-have-its-own-power-grid/) explains why Texas has its own electrical grid:

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> The Texas Interconnected System — which for a long time was actually operated by two discrete entities, one for northern Texas and one for southern Texas — had another priority: staying out of the reach of federal regulators. In 1935, President Franklin D. Roosevelt signed the Federal Power Act, which charged the Federal Power Commission with overseeing interstate electricity sales. By not crossing state lines, Texas utilities avoided being subjected to federal rules. "Freedom from federal regulation was a cherished goal — more so because Texas had no regulation until the 1970s," writes Richard D. Cudahy in a 1995 article, "The Second Battle of the Alamo: The Midnight Connection."
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But what exactly does it gain from staying independent? Is it purely a political statement or is there a rational reason behind having a completely separate grid?

Answer: 
Tax Revenue
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By not trading on the national market, Texas avoids the cost of federal power regulations, as noted in several other answers. Now, the benefits of participating in the national market might seem like an obvious loss for Texas. They could have purchased power from many other states with excess capacity during this time.

However, Texas is enjoying what you might call the "Federal Privatization Tax", which is the situation that arises when a market operator is able to privatize profits while dumping costs on the public. The most obvious example is the 2008 Financial Crisis and the massive bailouts received by the banking sector.

It may not seem obvious that the same is happening in Texas, until you realize that Gov. Abbott declared a state of emergency, then requested Biden to declare a federal emergency for TX to free up FEMA and other assistance. And, because Americans are reluctant to leave their fellow Americans out in the cold, to suffer the consequences of their carefully considered decisions, [Biden agreed](https://www.npr.org/sections/live-updates-winter-storms-2021/2021/02/19/969465887/biden-to-authorize-broader-disaster-relief-for-texas) to the disaster declaration.

Federal Insurance
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It's funny that individual taxpayers are required to purchase liability insurance to enjoy the privilege of driving on public roads, but states are not required to purchase "regulatory insurance" to enjoy the privilege of federal disaster relief. When power plants in MN or ND or ME experience freezing temps, but survive just fine because federal regulations required larger safety margins, the ratepayers in those states pay more for electricity, but receive larger uptime performance. If there were a major disaster in one of those states that precipitated a federal disaster declaration and accompanying relief, taxpayers in other states should not resent the outcome too much, because the affected states have already paid in their "insurance premiums".

Texas, on the other hand, has chosen to forego the "federal insurance" of the national power regulatory framework, but *still receives the protection* of federal disaster relief. And so, Texas taxpayers are transferring my tax dollars to their state under the force of the Federal executive.

I would actually be ok with this, if FEMA dollars were conditioned upon states adhering to or adopting nationwide precautionary measures for whatever situation precipitates the emergency. "You want emergency relief for your short-sighted grid planning? No problem. But by accepting these dollars, you agree to fall under the oversight of the Federal Power Commission. Have a nice day."
It’s actually a purely economic reason. Regulations invariably increase cost, as regulation increases work above and beyond the cost of achieving a regulatory goal ie documentation of regulatory compliance.

Think of it this way, suppose they had to comply with the regulatory rules for every country in the world (ignoring jurisdiction). Suppose further that there were no conflicts, just that some were more strict than others. That would be a huge burden on a company just in the paperwork alone, but it would also be a problem in deciding which regulation to follow. If there’s a minimum distance between components, they would have to be aware of all of them, in order to be sure they complied.

Now, this of course isn’t that extreme, and for quite a while they didn’t have any regulatory rules to follow, but it still applies. No regulatory paperwork is going to be cheaper than one, and when the states added their own, one is cheaper than two.

NOTE: Just as you can exceed regulatory standards when they apply, you can exceed them even when they don’t. The desire to escape regulatory oversight is not limited to those that want to produce low quality crap. The main reason a company would want regulatory oversight is because they think it gives them an economic advantage. Not because they feel they need it in order to produce good work.