Electric Power, Natural Gas
August 18, 2025
Heat wave spawns advisories in central US, boosting peakloads, power prices
HIGHLIGHTS
MISO, SPP notify market of capacity issues
Low natural gas mitigates power price spikes
A 12-day heat wave has brought temperatures significantly above year-ago levels to the central US, spawning system advisories and boosting power demand and prices, even as natural gas prices remain well below the previous five-year averages for these dates.
The National weather service on Aug. 18 issued an extreme heat warning for much of Arkansas, northwestern Mississippi and western Tennessee, and heat advisories are in effect along the Mississippi River Valley and nearby states, stretching into Oklahoma and Texas on the West and deep into Alabama, Kentucky and Tennessee on the east. The heat advisory also stretches from Iowa and northern Illinois in the north to central Louisiana in the south.
CustomWeather forecast the Southwest Power Pool to have a population-weighted average temperature of 84.9 F Aug. 18 and 83.7 F Aug. 19, compared with long-term averages of 80.4 F for those dates. SPP's average temperature has been about 1.8 degrees F above normal since Aug. 6.
CustomWeather forecast the Electric Reliability Council of Texas to have a population-weighted average temperature of 85.3 F Aug. 18 and 83.9 F Aug. 19, compared with long-term averages of 73 F and 74.6 F, respectively. ERCOT's average temperature has been about 0.4 degrees F above normal since Aug. 6.
MISO, SPP issue advisories
MISO at 8:15 pm CT Aug. 17 issued a Capacity Advisory Initiate for the MISO South region effective at 1 pm ET Aug. 18, due to "forced generation outages, above normal temperatures [and] higher than forecasted load." The MISO South region comprises much of Arkansas, Louisiana, Mississippi and East Texas.
SPP at 6:38 pm Aug. 17 issued a Conservative Operations Advisory for entire 14-state Balancing Authority Area effective noon CT "until an anticipated end time of 6 pm CT" on Aug. 18 "due to forced (unplanned) outages, high load, uncertainty in variable energy resource forecasts and elevated temperatures across the SPP territory.
The Electric Reliability Council of Texas issued no such advisory, but it forecast load to peak at 85.3 GW on Aug. 18, its highest peak so far in 2025, and well above the forecast peak of 79.2 GW included in ERCOT's Monthly Outlook for Resource Adequacy for August, issued June 6.
MISO forecast loads to peak at almost 116 GW Aug. 18, its highest level since Aug. 8's 117.8 GW, but still well below July's repeated grilling, when loads approached 121 GW.
SPP forecast loads to peak around 54.5 GW Aug. 18, which would be the highest level so far this summer, and the heaviest load since a previous heat wave struck Aug. 24, 2023, when the load peaked at 54.8 GW.
Energy market impacts
Although ERCOT has issued no advisories, its power pricing has surged into triple digits, compared with much more modest pricing in MISO and SPP.
In trading on the Intercontinental Exchange Aug. 18, ERCOT North Hub day-ahead on-peak was trading around $131/MWh for Aug. 19 delivery, up sharply from the Aug. 18 price of about $71/MWh.
MISO's Indiana Hub day-ahead on-peak was trading at less than $64/MWh for Aug. 19 delivery, don about $1.45 from Monday's price of $65.39/Mwh.
SPP South Hub day-ahead on-peak was trading around $60/MWh, up by more than $3 from Aug. 18's $56.85/MWh.
Weak natural gas prices may have played a role in mitigation power price gyrations.
Platts assessed Houston Ship Channel gas around $2.715/MMBtu for Aug. 19 delivery, up from $2.65 for Aug. 16-18 delivery, but down from the previous five-year average of $3.829/MMBtu for that date.
Platts had Chicago city-gates gas at around $2.705/MMBtu for Aug. 19 delivery, down 3.5 cents from $2.74/MMBtu for Aug. 16-18 delivery and down sharply from Aug. 19's five-year average of $3.729/MMBtu.
Platts had Panhandle Texas-Oklahoma gas around $2.65/MMBtu for Aug. 19 delivery, virtually flat from the Aug. 16-18 index but sharply down from Aug. 19's five-year average of $3.623/MMBtu.
