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Power Scare Shows Texas Grid Still at Risk After Blackouts

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Mark Chediak and Naureen S. Malik
·2-min read
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(Bloomberg) -- Texas faced a brief power-grid scare Tuesday night, less than 60 days after widespread blackouts left millions without light and heat for days during a deep winter freeze.

The grid operator, the Electric Reliability Council of Texas, asked for conservation for nearly four hours with a quarter of generators down for repairs and a mild cold front failing to reduce electricity demand as much as had been anticipated, leaving supply tight. Wholesale electricity prices jumped as high as 10,000% in some parts of the state.

Ercot ended the conservation appeal shortly after 8:30 p.m. Houston time without needing to call for any emergency measures.

The close call came after the February crisis when Texas suffered from catastrophic blackouts during a winter storm that knocked out nearly half of the state’s generation capacity. State lawmakers are now seeking to put in place a series of market reforms designed to avoid a repeat of the calamity that left more than 100 people dead.

Part of the problem on Tuesday was that Ercot failed to correctly forecast solar and wind production and had expected milder weather to reduce demand across Texas. But the cooler air stalled in one part of the state, leaving temperatures -- and demand for power -- higher than anticipated in large cities including San Antonio and Houston.

Many power plants schedule annual maintenance for this time of year, when demand is expected to be reduced due to lower temperatures. A few plants were also offline to make repairs related to the February storm, Ercot’s Vice President of Grid Planning and Operations Woody Rickerson told reporters at an earlier briefing.

The average spot on-peak electricity at Ercot’s North Hub jumped more than 10,000% to $2,012 a megawatt-hour as of 5:30 p.m, according to grid data compiled by Genscape. They had fallen back to $222 by 8:30 p.m. Prices are capped at $2,000 a megawatt hour, after regulators suspended the previous $9,000 cap following the energy crisis.

(Updates with new details throughout)

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