Spot natural gas prices at the Waha hub in West Texas turned negative for a second time this week even as power demand was set to break the record high for June as homes and businesses crank up their air conditioners to escape a brutal 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.
Next-day gas prices at the Waha hub plunged 604% to a negative $2.78 per million British thermal units (mmBtu) for Friday, the lowest since mid April, as pipeline constraints trap gas in the Permian Shale.
That was the second time gas prices fell into negative territory during this week’s heat wave and the 19th time so far this year.
High temperatures in Houston, the state’s biggest city, will rise from 94 degrees Fahrenheit (34.4 Celsius) on Friday to 99 F on Monday, July 1, before easing to the mid 90s F around the Fourth of July holiday, according to AccuWeather meteorologists.
Even though that is only slightly over the city’s normal high of 93 F at this time of year, AccuWeather said it will feel more like 106 F on Friday and 109 F on July 1 when considering humidity and other factors.
After breaking peak-demand records several times in April and May, ERCOT projected power demand would rise from 80,069 megawatts (MW) on Thursday to 80,942 MW on Friday, which would top the 80,787-MW record for June set in 2023.
Energy traders noted demand on Friday could fall short of the June record after actual power use on Thursday came in short of ERCOT’s record-breaking forecast for that day.
Looking ahead, ERCOT forecast demand would reach 82,314 MW on July 1, 83,387 MW on July 2 and 83,540 MW on July 5, which would break the 83,047-MW record for July set in 2023 on July 2 and 5.
The grid’s all-time peak was 85,508 MW on Aug. 10, 2023.
Analysts expect ERCOT electricity use will top that all-time high this summer due to economic and population growth in Texas and fast-rising demand for more power from data centers that run artificial intelligence and cryptocurrency mining.
One megawatt can power 800 homes on a normal day but as few as 250 on a hot summer day in Texas.
(Reporting by Scott DiSavino; Editing by Chizu Nomiyama)