Texas Heat Wave Spurs Power Prices to Their Highest Since 2021 Freeze

Texas power prices hit a 30-month high with demand expected to reach record-breaking levels Friday as homes and businesses cranked up their air conditioners to escape a scorching heat wave. 

The state grid that supplies power to 26 million customers was operating normally Friday morning, but supplies were expected to tighten after sundown, when solar power drops, according to the website of the grid operator, the Electric Reliability Council of Texas. 

To reduce demand, the grid urged consumers to conserve energy for a second day in a row on Friday afternoon. 

ERCOT said it avoided emergency operations on Thursday “due to the conservation efforts by Texas residents and businesses, combined with timely rainfall in the Houston area, improved wind conditions and additional grid reliability tools.” 

Next-day prices at the ERCOT North Hub, which includes Dallas, soared to $1,599 per megawatt hour (MWh) for Friday, the most since the 2021 February freeze when prices held at more than $8,000 for a couple of days. The same hub reported $925 MWh on Thursday.  

That compares with an average of $85 so far this year, $78 in 2022 and a five-year (2018-22) average of $66 per MWh. 

The fragility of the Texas grid was highlighted in 2021 when a massive blackout killed dozens and left millions without power, water and heat for days as gas supply lines and power plants froze. 

Houston, the biggest city in Texas, could reach a record-breaking 40 degrees Celsius (104 degrees Fahrenheit) on Friday, said the National Weather Service, which issued an excessive-heat warning for the greater Houston area. This month has seen 24 days of temperatures above 100 F.