By Tom Kleckner
Texas power prices bumped up against the market’s cap as the state registered another day of soaring temperatures and demand on Tuesday, just as ERCOT CEO Bill Magness predicted early in the day.
Addressing the grid operator’s Board of Directors during its regular bimonthly meeting, Magness said, “It’s going to be a tight day on the ERCOT system as we go through the afternoon.”
And indeed it was. With triple-digit temperatures once again driving up the use of air conditioners, ERCOT was forced to call a Level 1 energy emergency alert at 3:12 p.m. — its first such alert since 2014. The grid operator asked for conservation measures as its operating reserves dipped below their 2.3-GW threshold.
The EEA was canceled at 5:02 p.m., but not before demand came close to Monday’s record of 74.5 GW, topping out at 74.2 GW during the interval ending 5 p.m. Still, that broke the 2018 record of 73.5 GW, the sixth time in two days ERCOT has exceeded that mark. Eight of the system’s top 10 highest demand peaks have come since Monday. (See ERCOT Sets New Demand Mark, Smashes ’18 Record.)
Settlement prices hit quadruple digits during the 15-minute interval that ended at 2 p.m. and reached ERCOT’s maximum of $9,000/MWh at 3:45 p.m., staying in that range through the 5 p.m. interval. Monday’s prices had peaked at $6,537.45/MWh.
Day-ahead prices for Tuesday were trading in the $2,600 to $2,700/MWh range, said Potomac Economics’ Beth Garza, director of ERCOT’s Independent Market Monitor.
ERCOT’s website became sluggish during the afternoon as interested visitors watched the lines in a graph depicting capacity and demand nearly touch.
During his presentation to the board, Magness drew attention to a slide in his deck. It noted “warmer” temperatures during the second half of the summer, as opposed to the first half.
“Our expectations for August have advanced quite a bit in the last week,” he said.
Magness exuded confidence in ERCOT’s staff, which knew what was coming this summer. The grid operator had projected peak demand of 74.9 GW.
“If you ask any of the men and women working in the control room today, they’ll tell you this is what we train for,” Magness said. “That circle of support extends beyond the control room … into every part of ERCOT. This is what we train for; this is what we do; this is the service we’re supposed to provide. So let’s have it.”
After the meeting, ERCOT called on consumers and businesses to reduce their energy use through 7 p.m.
The Public Utility Commission of Texas also issued a press release calling for conservation, suggesting consumers make a few “simple choices” by raising their thermostats a couple of degrees, reducing lighting and using heavy appliances after sunset.
“When the energy demands of our state’s steadily growing population and booming economy intersect with hot summer temperatures, the supply of power can get a little tight,” PUC Chair DeAnn Walker said in the release.
ERCOT sent out a market notice Tuesday morning, alerting participants that the Texas Commission on Environmental Quality (TCEQ) will “exercise its enforcement discretion for exceedances of emission and operational limits of power generating facilities” should the generators exceed air-permit limits.
Generating facilities expecting to exceed their limits were directed to notify the TCEQ, and ERCOT said it would notify market participants when the agency’s “enforcement discretion” ends.
John Hall, the Environmental Defense Fund’s state director of regulatory and legislative affairs, suggested other alternatives to increased generation.
“While this may look like a zero-sum game, it doesn’t have to be,” Hall told RTO Insider. “Policymakers have a suite of tools — such as energy efficiency and demand response — to avoid the false choice between Texans’ air quality and a reliable grid.”
