Latest arctic blast sends Texas power usage, prices soaring

HOUSTON, March 3 Mon Mar 3, 2014 12:53pm EST

HOUSTON, March 3 (Reuters) - A late arctic cold front that barreled as far as south Texas boosted the state's electricity consumption to a monthly record on Monday, according to preliminary data from the state's power grid operator.

Electricity usage in Texas has set peak-hour records in at least five of the past six months, according to ERCOT data, including a new winter record of 57,277 MW set in early January.

Power demand early on Monday reached 54,549 megawatts in the hour ending at 8 a.m. CDT (1400 GMT), surpassing the 47,665 MW record set on Sunday evening as sub-freezing temperatures and high winds pushed deep into the state, according to the website of the Electric Reliability Council of Texas (ERCOT).

The previous March record use for ERCOT was 43,033 MW set in 2002, according to ERCOT's website. Monday's March peak is 27 percent above the March 2002 record.

The record autumn and winter power usage has come as regulators and some power plant owners disagree about whether Texas' $35 billion power market needs an overhaul to encourage construction of new power plants.

Last week, ERCOT issued its summer supply outlook after lowering expectations for peak power use in the years ahead.

ERCOT issued a public call for conservation on Sunday evening, citing freezing temperatures that would strain available generation capacity.

"Based on the level of generation supplies that we expect to be available, we are asking consumers throughout the ERCOT region to reduce their electricity use as much as possible Monday morning," Dan Woodfin, director of system operations, said in a statement.

ERCOT was able to avoid a repeat of the emergency steps taken in early January to prevent rolling outages.

Real-time power prices briefly hit the market cap of $5,000 per megawatt-hour in some areas during the early morning hours on Monday and averaged $2,700 per MWh for about one hour.

Prices also briefly hit $1,000 on Sunday evening as cold temperatures reached Houston and settled in.

The latest arctic front left icy roads in north Texas and pushed temperatures 25 to 30 degrees Fahrenheit below normal for early March from Dallas to Brownsville.

The high in Dallas is expected to hit 32 degrees Fahrenheit (0 Celsius) compared to the normal high in early March of 65 degrees.

Tuesday's peak power demand is expected to ease to 51,600 MW as the state begins to warm up.

The extreme winter weather has boosted power demand well beyond ERCOT's winter forecast of less than 50,000 MW under normal weather conditions.

ERCOT's all-time peak use of 68,305 MW occurred in August 2011 during a prolonged heat wave and drought.

One megawatt can power about 500 homes during mild weather conditions and about 200 homes during high-demand summer months, ERCOT said.

Power producers in Texas include Luminant, a unit of privately held Energy Future Holdings, NRG Energy , Calpine Corp, NextEra Energy, Exelon Corp, LS Power and Panda Power Partners.

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