The Texas power-grid operator forecast on Wednesday that electricity use will break peak-demand records for June and July over the next week as homes and businesses crank up air conditioners to escape a heat wave.
In response to that demand spike, spot power and natural gas prices jumped to their highest levels since earlier this year.
The Electric Reliability Council of Texas (ERCOT), which operates most of the power grid for 27 million customers, said the system was operating normally with enough supply available to meet expected demand.
High temperatures in Houston, the state’s biggest city, will rise from 95 degrees Fahrenheit (35 degrees Celsius) on Wednesday to 98 F on Thursday and likely remain in the mid-90s F through mid-August, 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 107 F on Wednesday and Thursday when factoring in humidity and wind.
After breaking peak-demand records several times in April and May, ERCOT projected power demand would rise from 80,180 megawatts (MW) on Wednesday to 83,422 MW on Thursday, which would top the 80,787-MW record for June set in 2023.
ERCOT forecast demand would reach 84,251 MW on July 1, which would break the 83,047-MW record for July set in 2023.
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 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.
SPOT PRICES JUMP
In the spot market, next-day power prices at the ERCOT North Hub, which includes Dallas, soared 64% to a one-month high of around $55 per megawatt hour (MWh), according to LSEG pricing data.
That compares with an average of $34 per MWh so far in June, $59 in May, $31 this year, $80 in 2023 and $66 over the prior five years (2018-2022).
Next-day gas at the Waha hub in the Permian Basin in West Texas soared 352% to a five-month high of positive $2.52 per million British thermal units (mmBtu) for Wednesday, up from a negative $1 for Tuesday.
That compares with an average of $1.16 per mmBtu so far in June, 19 cents in May, 87 cents so far this year, $1.82 in 2023 and $2.96 over the prior five years (2018-2022).
(Reporting by Scott DiSavino; Editing by Rod Nickel)