UPDATE 2-Texas grid says risk of power outages rises amid heat

* Surplus power below 1,750 MW triggers curtailments

* Loss of generation limits available reserves

HOUSTON, Aug 4 (Reuters) - Extreme heat and soaring power demand may force the Texas power grid operator to impose rolling outages on Thursday to prevent a wider blackout as residents struggle with a record-breaking heatwave.

The Electric Reliability Council of Texas, ERCOT, warned there was a high risk of rolling outages as the state's power reserves were nearly wiped out by high air conditioning demand.

The state -- broiling under a relentless streak of 100-plus Fahrenheit temperatures and drought -- has set three power consumption records this week, straining power plants.

Earlier, ERCOT moved to curtail power to some industrial customers Thursday afternoon as a way to boost surplus power to keep residential air conditioners running over the hottest part of the afternoon.

Power demand was not on track to set a record Thursday, but increased power-plant outages reduced supply, shrinking surplus power needed to avoid a widespread grid collapse.

Between 4,000 and 5,000 megawatts of generation was unavailable on Thursday, up about 1,000 MW from the previous day, according to ERCOT officials.

Rolling, or rotating, outages are temporary controlled outages where power delivery companies cut to small areas for periods of 45 minutes or so. Power is restored and other circuits are cut.

The situation should improve on Friday as afternoon power demand typically falls due to businesses that close early for the weekend.

The possible shutdown of a large power plant may have reduced the state's available supply compared to the previous day when the grid operator was able to narrowly avoid cutting power to so-called "interruptible" customers.

Interruptible customers are mostly large industrial plants, such as chemical plants, that are paid to be dropped to provide extra capacity for the remaining customers, ERCOT said.

Curtailing the interruptible customers, along with a small demand-response program, adds as much as 1,300 to 1,400 megawatts to the surplus.

The grid agency initiated an electric emergency an hour earlier on Thursday than Wednesday as surplus power reserves fell with rising temperatures.

Real-time power prices again jumped to the maximum cap of $3,000 per megawatt-hour while power for Friday delivery rose to nearly $600 per MWh, the highest in more than a decade.

Texas also saw record power monthly power peaks in May, June and July.