Summer outlook for Texas electricity grid improves slightly

May 07--Record demand for electricity remains in the summer forecast for Texas, but the state's main power grid is slightly better positioned to handle it than what was described in a preliminary assessment earlier this year.

The cushion between estimated peak summer electricity usage and maximum generation capacity has increased by a small amount, primarily because three power plants that weren't expected to be operational now should be, according to the Electric Reliability Council of Texas, which oversees the state's electricity grid and is commonly known as ERCOT.

The change puts ERCOT's "planning reserve margin" at 11 percent, up from about 9 percent in a report by the agency two months ago.

"We do have some additional capacity that is coming to the picture, (and) that definitely improves the situation" for the summer, said Pete Warnken, manager of resource adequacy for ERCOT, which oversees most of the electricity flow in Texas.

In March, ERCOT officials expressed confidence in the reliability of the electricity grid under typical summer weather conditions but called the reserve margin slim, warning that so-called "load-control measures" -- including the possibility of rolling blackouts -- might be needed if conditions turned out to be much hotter than normal or otherwise extreme.

Warnken said Monday that the chances of rolling blackouts now are more remote. Still, he said, power reserves remain tight.

"There is a possibility that you may have what are called rotating outages" if the weather this summer turns out to be unusual, he said. But "it's probably reduced a little bit" because of the extra generation capacity.

The anticipated reserve margin for the summer already includes the estimated benefits of various conservation measures during periods of high demand, such as voluntary reductions by some large commercial electricity users

Peak electricity usage in Texas this summer is expected to hit an all-time high, coming in at 72,756 megawatts, a trend attributable to the state's growing economy and population. The anticipated peak demand would exceed previous record usage of 71,110 megawatts set in August 2016.

But this summer also will be first since Vistra Energy made the decision last year to close some coal-fired generation plants in Texas that it deemed uneconomical. Those plants together accounted for more than 5 percent of ERCOT generation capacity.

Still, three gas-fired plants now are expected to be operational this summer that ERCOT officials hadn't counted on to contribute. One is a new plant that is coming online sooner than anticipated, ERCOT officials said, while the other two -- one that had been "mothballed" and another previously listed as in an "extended outage status" -- are starting back up.

Those three plants, combined with additional developments since earlier in the year, will add about 525 megawatts to the reserve margin during the summer months.

Warnken declined to discuss the three plants specifically. However, he said the state's deregulated electricity market is generally working as it should when power producers add capacity to take advantage of low supply.

"We do expect the market to respond to scarcity conditions," Warnken said. "It's certainly a good bet to expect that they are going to be looking at summer conditions and making decisions appropriately."

Separately, a state Senate committee was scheduled to conduct a hearing Tuesday morning at the Capitol to review the reliability of the ERCOT electricity grid.

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