The summer season may have officially begun early Tuesday morning, but ERCOT has already set three new marks for all-time peak demand this year.
The Texas grid operator confirmed demand peaked at a record 75.1 GW Thursday afternoon, breaking the previous record of 74.9 GW set on June 12. Those records were surpassed at 4:30 p.m. Monday, when demand hit 76,743 MW, less than 1,000 MW short of staff’s 77.3 GW peak forecast for the summer. (See ERCOT, PUC Say Texas Ready for Summer.)
Average peaks will remain above 75.7 GW for the rest of the week as the state continues to bake in extreme drought conditions that exacerbate the heat. The Houston area was expected to see temperatures approaching 107 degrees Fahrenheit Monday; widespread temperatures at 108 degrees or above would trigger a heat advisory.
ERCOT’s meteorologist says the footprint’s temperatures will be hotter this week than they were last week, with most of Texas seeing highs of 100 degrees or greater. He said temperatures of 103 to 105 degrees will be common later in the week; the European weather model is forecasting highs of 110 degrees or greater across North Texas this weekend.
Extreme to exceptional drought — defined as widespread crop and pasture losses, exceptional fire risk, and water shortages in reservoirs, streams and wells causing water emergencies — covers 70% of the state’s Southwestern region, which includes Austin, San Antonio and El Paso, according to the National Weather Service.
Sunday’s demand topped out at 73.8 GW Sunday, the 11th straight day it has exceeded 72.4 GW.
The grid continues to rely on wind and solar resources to provide between 25 and 30 GW of energy a day. ERCOT said it has more than 92 GW of expected capacity to meet the demand and has been able to avoid asking Texans to reduce their usage since an informal conservation appeal in May.
Since April, the grid operator has issued three operating condition notices, its lowest-level communication to the market in anticipation of possible emergency conditions. Thermal outages that topped 20 GW near the end of the maintenance season had dropped to 5.3 GW as of Monday.
ERCOT says it has enough capacity to meet demand as it continues to maintain a conservative operations posture by procuring up to 6.5 GW of operating reserves. However, the Independent Market Monitor said in its annual market report that the practice has cost the market up to $845 million year to date.
The Monitor is presenting its report to the grid operator’s Board of Directors Tuesday and a state House committee hearing Wednesday. The ERCOT directors will begin their bi-monthly board meeting Tuesday several hours after the summer solstice officially marks the beginning of summer at 4:14 a.m.
Securitization Bonds are Issued
A special-purpose entity, Texas Electric Market Stabilization Funding, will issue more than $2.1 billion in bonds to cover short pays to the market, a result of legislation last year to compensate market participants for $2.9 billion in debt incurred during the February 2021 winter storm. (See Securitization Offers Texas a Way Forward.)
ERCOT will distribute the bonds’ proceeds to load-serving entities that have demonstrated to regulators that they were exposed to extraordinary costs because of the supply and demand imbalance caused by generation outages during the severe cold.
The bonds will be issued in four tranches, totaling $2.12 billion, with weighted average lives of approximately seven, 16, 22 and 26 years. Their interest rates range between 4.264% and 5.167%.
The four tranches of ERCOT’s securitization bonds | ERCOTMoody’s Investors Service assigned a provisional rating of Aaa (sf) for each of the four tranches; a final rating will occur at closing, ERCOT said
The Texas Public Utility Commission authorized ERCOT to assess a monthly “default charge” on qualified scheduling entitles (QSEs) and congestion revenue right account holders to repay the default balance. The grid operator will post miscellaneous invoices to the QSEs Tuesday, and funds will be distributed Wednesday. ERCOT will distribute initial uplift charge invoices beginning in August. Until then, it will use market notices to provide the daily securitization uplift total.
Biannual interest payments to bondholders will begin Feb. 1, 2023, and occur every August 1 and February 1 of the first bank business day thereafter if those dates are not bank business days.
TAC Reviews Structure, Procedures
The Technical Advisory Committee held a workshop last week to review its structure and procedures as it continues to address stakeholder concerns about how it interacts with the new ERCOT board.
“I know there’s been a lot of angst amongst stakeholders as it pertains to what the stakeholder process will be like as we go forward,” TAC Chair Clif Lange said in opening the June 14 discussion. “We want to provide a menu of options, when appropriate.”
Lange said he and vice chair Bob Helton had recently met with director Bob Flexon, who chairs the board’s new Reliability and Markets Committee (R&M) that some stakeholders say is stepping on TAC’s toes. Lange said he and Helton were urged to streamline TAC’s subcommittees and to think of ways to change the structure and reporting relationships of the committee and its participation in the stakeholder process.
“The board is looking for opportunities for the R&M to provide input and recommendations to the board on items bubbling up through TAC,” Lange said. “[The board] sees this as a way to strengthen [the stakeholder] relationship. They see this as an opportunity to improve communications and understanding of the core areas of ERCOT.”
The committee discussed creating a liaison committee that would meet with the R&M as needed to inform the directors on coming ruling changes but failed to reach consensus on how the liaisons would be appointed. Members did agree that a proposal requiring them to be employees of the companies they represent made no sense when some organizations and stakeholder groups rely on outside consultants.
“[The experience proposal] gives the board some degree of certainty that TAC has the expertise membership can draw on,” Lange said.
Lange and Helton will continue the discussion at TAC’s June 27 meeting. They will then meet with the board and get its feedback.
RPG Recommends 345-kV Project
Staff told the Regional Planning Group last week that they will recommend to the board and TAC that a $477 million 345-kV transmission line addition in West Texas go forward as a Tier 1 project.
ERCOT said its independent review of the project indicates the additional pathway will address rapid load growth in the Delaware Basin area. The project includes 71 miles of double-circuit 345-kV lines from the existing Bearkat substation to the existing North McCamey substation and another 94-mile stretch from the North McCamey substation to the existing Sand Lake substation.
A final report for the project is expected to be released next month and will then go to TAC and the board in August for their endorsement.
The Lower Colorado River Authority, Wind Energy Transmission Texas and Oncor jointly submitted the Bearkat-North McCamey–Sand Lake 345-kV addition to the RPG in April, requesting critical designation. It is scheduled to go in service in June 2026.
