A lot factors into it, but yes -- essentially grids are sort of local. The US has three grids: East, West, and Texas. Folks ask why Texas has its own grid and

A lot factors into it, but yes -- essentially grids are sort of local. The US has three grids: East, West, and Texas. Folks ask why Texas has its own grid and we generally say "because Texas", but the real reason is just the way the grid grew in the early 20th century. Texas was isolated from the big industrial centers of the coasts and had abundant internal energy sources (coal and oil) so it just grew into its own grid and stayed that way. Inside each grid the frequency is internally regulated. Each grid is out of sync with each other so power transfer between grids is limited. A tie between grids requires converting energy to DC and back into AC synchronized to the receiving grid. ERCOT has 5 of these ties and their capacity is a small percentage of the demand. Additionally, there's a few generators at the border of the grid than can operate on two different grids (one grid at a time). They choose where to operate depending on pricing. Another problem to deal with is transmission capacity. If you have too much generation away from demand transmission gets congested. To deal with this we have nodal markets (http://www.ercot.com/content/wcm/training_courses/14/nodal101_september_2013.pdf http://www.ercot.com/content/wcm/training_courses/14/nodal10...).