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ERCOT issues emergency alert as demand spikes again, prices reach cap

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ERCOT issues emergency alert as demand spikes again, prices reach cap

With a heat wave blanketing much of the state, the Electric Reliability Council Of Texas on Aug. 13 issued an emergency alert calling on consumer conservation as the grid operator continued to see near-record electricity demand.

By midafternoon, real-time energy prices were trading at the $9,000-per-MWh cap for the second time in the grid operator's history. ERCOT issued price-adders and called on all available power supplies.

The emergency alert called on consumers to turn up thermostats, limit appliance use and take measures to stay cool that do not rely on electricity consumption.

"High temperatures have resulted in record electricity demand over the last few days and may result in a new record today," ERCOT President and CEO Bill Magness said in a news release. "Consumers can help lower energy consumption by taking some simple actions between the hours of 3 and 7 p.m."

Demand in ERCOT reached record levels in the days leading up to Aug. 13. Demand reached 74,163 MW on Aug. 12, a record. As of 5:30 p.m. CDT on Aug. 13, demand was 74,050 MW and reserves were 3,269 MW.

ERCOT issues a level-one emergency alert when operating reserves drop below 2,300 MW and are not expected to recover within 30 minutes. Level-two emergency alerts occur when operating reserves are less than 1,750 MW. In that case, ERCOT can reduce demand by interrupting power to large industrial customers that have contractually agreed to shut down electricity when called upon. A level-three emergency alert occurs when operating reserves drop below 1,000 MW, in which case ERCOT orders transmission companies to implement rotating outages.

ERCOT canceled the emergency alert around 5 p.m. as reserves increased to over 3,100 MW.

High temperatures in Texas' summer come as no surprise, and ERCOT has been operating under record-low reserve margins, the difference between generation and forecast peak demand. ERCOT in May projected summer margins would be 8.6%, well below the 13.75% target.

According to ERCOT, normal mid-August temperatures are 102 degrees F in Dallas, 102 degrees F in Austin and San Antonio and 96 degrees F in Houston.

According to the National Oceanic and Atmospheric Administration, the temperature in Dallas on Aug. 13 reached 103 degrees F. Austin and San Antonio reached similar levels, and Houston hit 98 degrees F.

Jan. 23, 2018, was the first day in ERCOT's history that real-time energy prices reached the $9,000/MWh cap, according to its 2018 state of the market report.