Today the group that monitors the Texas Electric Grid came out with a new assessment of the state’s power reserves heading into the summer. The Electric Reliability Council of Texas (ERCOT) says Texas is still at risk of rolling blackouts. But the likelihood has diminished as conservation has ramped up and more energy companies have brought “mothballed” power plants back online.
Those plants are operating thanks in part to the low cost of natural gas, which makes it economically attractive to run less efficient natural gas power plants. All but one of the state’s mothballed plants that are being brought back online are natural gas-fired plants.
Another reason plants are coming out of “mothball” status? ERCOT and Public Utility Commission (PUC) are signaling that they may be able to charge more for power during times of peak demand and increase generator revenues. The PUC discussed a move in April to raise the system-wide offer cap (essentially, how much generators can charge during peak demand, like during Texas’ hot August afternoons). They’re looking at raising that cap by fifty percent starting August 1, and tripling it (or even going higher) over the next three years. Texas currently has the highest offer cap in the nation.
“Clearly, the recent actions taken by the Public Utility Commission (PUC) and ERCOT have resulted in positive market signals, encouraging generators to bring their units back online for the hot summer months,” State Senator Troy Fraser (R- Horseshoe Bay) said in a statement today. “While the margins are still tight, I am encouraged to see not only investment in the ERCOT market, but also retired units coming out of mothball.”
Not everyone is happy with the idea of raising prices. “This report suggests the need for continued careful deliberation, but not rushed short-term changes that could shock the market and increase prices,” Dr. Randy Moravec, executive director from the Texas Coalition for Affordable Power, said in an email to StateImpact Texas.
All told, ERCOT expects to add more than 430 megawatts of electricity from month-balled plants that was not available last summer.
And climatologists are predicting it won’t be as hot as it was last year, which should help reduce demand.