ERCOT set to break peakload records July 8-11; Texas triple-digit highs persist

The Electric Reliability Council of Texas forecast an all-time record peakload for July 8, possibly followed by more records through July 11, as a heat wave brought triple-digit high temperatures and idled wind turbines, boosting day-ahead on-peak power and spot gas pricing.

As of 1:30 pm CT, ERCOT forecast load to peak at 78.6 GW on July 8, well above the record of 77.5 GW set July 5, and the peakload forecasts for July 9-11 also exceed the existing record, ranging from a low of 77.7 GW on July 10 to a high of 80.6 GW on July 11.

As of 3:40 pm CT, ERCOT reported system demand at 77,818 MW, slightly more than July 5's record of 77,460 MW. Wind output had fallen to 4,082 MW, about 30% of the average output level for all of June.

The National Weather Service on July 8 had heat advisories or excessive heat warnings for virtually all of the eastern two-thirds of the Lone Star State. High temperatures forecast for the following major metro areas:

• Austin: 102 F July 8, 104 F July 9, 106 F July 10, 105 F July 11, 102 F July 12
• Dallas-Fort Worth: 105 F July 8, 106 F July 9, 101 F July 10, 104 F July 11, 101 F July 12
• Houston: 97 F July 8, 101 F July 9, 100 July 10, 98 F July 11, 96 F July 12
• San Antonio: 102 F July 8, 014 F July 9, 105 F July 10, 104 F July 11, 102 F July 12

One should note that humidity associated with Houston's proximity to the Gulf Coast increases the heat index to 106 F July 8 and 110 July 9.

ERCOT's population-weighted average high temperatures so far in July have averaged 98.3 F, about 7.1% higher than the 91.7% average for those dates over the previous five years, according to CustomWeather.

Power market impacts

So far in July, ERCOT North Hub day-ahead on-peak locational marginal power prices have averaged 175% higher than the average for the corresponding dates over the previous five years, with the price for delivery July 8 up $77.66 to $192.66/MWh, according to S&P Global Commodity Insights price data.

ERCOT North Hub on-peak spiked near $225 during July 8 trading on the Intercontinental Exchange to price around $462.50/MWh for July 11 delivery. Current prices trended over a thousand percent higher than the same time in 2021, when they averaged about $33.75/MWh.

Prices in the near term, however, had double-digit declines, as the balance of the week peak July 12-15 contract slid $60 to about $137.75/MWh. Following suit, the next week peak July 18-22 dropped $78 to $135.50/MWh.

Gas market impacts

Natural gas prices at the Houston Ship Channel have trended downward since the June 9 high of $9.26/MMBtu and have so far in July averaged just $5.554/MMBtu, but this remains more than double the $2.652/MMBtu average for the same dates the previous five years.

In preliminary July 8 trading, Platts' Houston Ship Channel gas index rose 31.5 cents to $5.955/MMBtu for Jan. 9-11 flows. Month-to-date natural gas demand in the Southeast and Texas has so far averaged 12% higher than July 2021.