ERCOT reliability stays strong; energy conservation alert remains amid record demand

Grid reliability remains strong, while customers are encouraged to continue conserving energy during peak hours of 3-7 pm through June 18, the most recent Electric Reliability Council of Texas notice said.

"Conservation efforts combined with the changes in procedures and processes implemented by ERCOT and the PUC following the winter storm prevented the possibility of rotating outages," the notice said.

In addition, the grid operator activated all available generation units to help meet customer demand. About 1.2 GW of power was regained on June 14, it added.

Demand, wind generation

According to the preliminary ERCOT data, peakload demand reached 69.943 GW on June 14, setting the new June demand record. The previous system-wide record was set on June 27, 2018 at 69.123 GW. ERCOT expects load to peak at 70.395 GW on June 17 and 68.779 GW on June 18.

High temperatures in Dallas were forecast in the mid-90s degrees Fahrenheit on June 17-18, about 3 degrees above normal, while Houston highs were forecast in the low-90s to upper 80s F, mostly on par with seasonal norms, CustomWeather data showed.

Wind supply in the region was expected to rise consistently over the next couple of days, helping ease the upward pressure on the market. June 17 forecast stood at 7.57 GW, up 15% day on day, and June 18 generation was forecast at 8.76 GW, ERCOT data showed.

Prices fall

Power prices in ERCOT have been on the decline since reaching triple digits on the Intercontinental Exchange and since real-time locational marginal prices edged near the new $2,000/MWh systemwide cap on June 14.

ERCOT North Hub real-time on-peak locational marginal prices trended around $37/MWh, and Houston Hub LMP traded around $36/MWh as of 12:45 pm CT.

North Hub day-ahead on-peak for June 17 delivery dropped about $65.50 on ICE on the day to trade at $55/MWh, down from its previous settlement of $120.50/MWh.

Despite lower prices from earlier in the week, the contract moved 214.3% higher than last year at the same time, when it was priced around $17.50/MWh as temperatures in the North Texas region continued in the 90s F.

North Hub real-time on-peak for next-day delivery also saw falls, down about $37.50 to trade around $52.50/MWh; the balance-of-the-week strip for June 18 slid about $29 to trade around $41.50/MWh.

Natural gas prices also trended lower on ICE, with Houston Ship Channel down 15 cents to $3.19/MMBtu and Katy falling 19 cents to $3.20/MMBtu for June 17 flow.

Forwards tumble

North Hub real-time on-peak July-August summer contract fell $4 to trade around $92.75/MWh, a notable change from trading activity on June 14, when the contract priced around $133/MWh.

North Hub real-time on-peak July alone fell $2 to price around $72/MWh, and the August contract saw a $5 drop to trade around $111/MWh.

Looking further ahead, the North Hub real-time on-peak July-August 2022 contract fell about $3 from its previous settlement to trade at $74.25/MWh, also lower than on June 14 when it traded slightly below $100/MWh.