Texas heat pushes electricity use to new monthly record

Reuters News
Posted: Sep 06, 2012 1:40 PM
Texas heat pushes electricity use to new monthly record

HOUSTON (Reuters) - Texas power use in the first week of September has reached a higher level than in any previous September, according to the state's power grid operator, but the record may be short-lived as triple-digit temperatures are forecast to boost power demand again on Thursday and Friday.

Power demand reached 64,862 megawatts in the hour between 4 p.m. and 5 p.m. CDT (2100-2200 GMT) on Wednesday, according to preliminary grid data, surpassing the September record of 63,161 MW set last year during a prolonged heat wave and drought.

The September 2011 record was first broken Tuesday afternoon when demand exceeded 64,638 MW.

The Electric Reliability Council of Texas (ERCOT) said Thursday's demand may reach 64,902 MW and Friday afternoon demand may top 65,100 MW, according to the agency's website.

Houston's high is forecast to reach 97 degrees Fahrenheit (36 degrees Celsius) Thursday, 7 degrees above normal, and 100 on Friday, according to AccuWeather.com.

The high in Dallas is forecast to hit 102 Thursday and Friday, 10 degrees above normal, before a cool front reaches the state over the weekend.

Warren Lasher, ERCOT's director of system planning, said the agency expected to have adequate generation resources through the week to avoid the need for any emergency action to curtail power use.

Real-time power prices in the state indicated ample power supplies Wednesday as prices only briefly rose to the $50-$90 range per megawatt-hour while next-day power prices traded in the $60s per MWh.

The state's all-time peak use of 68,379 MW was set in August 2011.

After ERCOT warned that rolling outages could occur this summer given the state's limited amount of surplus generation, several idled power plants were returned to service to bolster supply.

The state's shrinking reserve margin has led regulators to implement a number of wholesale market changes, including raising the price cap for power during times of scarcity, to encourage construction of new power plants to keep pace with growing power demand.

On Thursday, Dallas-based Panda Power Funds broke ground on a new 758-MW, natural gas-fired power plant near Temple, Texas. The plant was initially proposed in 2007 but was delayed by the national recession, low power prices and tight financial markets. The plant is expected to be operational in 2014 when ERCOT has projected a reserve margin below 10 percent.

"Today we break ground for Texas - to provide our state with the power it needs for future growth and economic vitality," said Todd Carter, Panda president, in a statement.

For the winter season, ERCOT's preliminary forecast, issued Tuesday, projects higher demand of 58,100 MW due to stronger El Nino conditions that typically lead to colder-than-normal weather in Texas.

So far this year, Texas has exceeded monthly power-use records in May, June, July and September.

One megawatt is enough to serve about 200 Texas homes during hot weather when air conditioners run for extended periods.

Power producers in Texas include Luminant, a unit of privately held Energy Future Holdings, NRG Energy, Calpine Corp, NextEra Energy and Exelon Corp.

(Reporting by Eileen O'Grady in Houston, editing by Gary Crosse)