Texas power prices soar ahead of record-breaking Memorial Day weekend
By Scott DiSavino
May 24 (Reuters) -Power prices in Texas soared for Friday with electric demand expected to break the record for the month of May for a second time this week, ahead of the long U.S. Memorial Day weekend as homes and businesses crank up air conditioners to escape a heat wave.
The Electric Reliability Council of Texas (ERCOT), which operates most of the state's power grid for 27 million customers, said the system was operating normally with enough supply available to meet expected demand over the next week.
In the spot market, next-day power prices at the ERCOT North Hub EL-PK-ERTN-SNL, which includes Dallas, soared to a two-week high of $141 per megawatt hour (MWh) for Friday, up from $21 for Thursday, according to pricing data on the LSEG terminal.
That compares with an average of $31 per MWh so far this year, $80 in 2023 and $66 over the prior five years (2018-2022).
Day-ahead prices on the ERCOT website, meanwhile, soared to $654 per MWh for one hour on Friday evening.
"May-to-date real-time pricing is 50% higher than in any year since 2010 (except for the 2022 natural gas price blowout). This results in more inefficient natural gas generators chewing through more gas ... to keep the lights on," analysts at consultancy EBW Analytics Group said in a note.
ERCOT projected power demand would peak at 75,118 megawatts (MW) on Friday and 76,493 MW on Monday, Memorial Day, which would top the current record for the month of May of 72,261 MW set last Monday.
The grid's all-time peak was 85,508 MW on Aug. 10, 2023.
Analysts expect ERCOT electric use will top that all-time high this summer with economic and population growth in Texas and demand for power from data centers, artificial intelligence and cryptocurrency mining rising fast.
One megawatt can usually power about 800 homes on a normal day but as few as 250 on a hot summer day in Texas.
NEAR-RECORD HEAT
High temperatures in Houston, the state's biggest city, will rise from 94 degrees Fahrenheit (34 Celsius) on Friday to 96 F (36 C) on May 26-27 before easing back to 94 F on May 28-29, according to meteorologists at AccuWeather.
The normal high in Houston at this time of year is 88 F (31 C).
AccuWeather said the forecast high of 94 F (34 C) for Friday was approaching the record for the day of 95 F (35 C) set in 1955.
ERCOT projected supplies would exceed demand by 5,000 to 42,000 MW over the next week with the 5,000 MW low expected during one hour in the evening of May 26 after the sun goes down and solar panels stop working.
That comfortable level of supply assumes nothing changes.
But things always change - power plants and transmission lines shut and return to service, weather forecasts change and storms cause outages.
Earlier this week, ERCOT said it experienced the "sudden loss of generation" totaling 1,438 MW on Wednesday. That reduced supplies.
The outage was at Panda Energy's gas-fired power plant in Temple and was likely caused by a tornado, according to energy data and analytics company Wood Mackenzie.
Panda Energy did not respond to requests for comment.
Reporting by Scott DiSavino and Laila Kearney in New York; editing by Jonathan Oatis
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