Texas power prices briefly top $9,000/MWH for second time in a week

Aug 15 (Reuters) - Spot power prices in Texas on Thursday hit $9,000 a megawatt hour (MWh) for second time this week in the real-time market as at least one large power plant was out of service and consumers cranked up air conditioners to escape a heat wave.

High temperatures in Houston, the state’s biggest city, have been at least in the mid-90 degrees Fahrenheit (34 Celsius) after hitting 100F several days earlier in the week, according to AccuWeather forecasts.

With continued hot weather forecast for the state, the Electric Reliability Council of Texas (ERCOT), grid operator for much of Texas, projected demand would hit a record high of 75,500 megawatts (MW) on Monday.

ERCOT on Thursday issued an emergency alert calling for conservation after its operating reserves dipped below 2,300 MW. It reported at least one large power plant of 450 MW went out of service late Wednesday, reducing supplies.

Texas set a record with 74,531 MW demand on Monday. Demand reached 70,842 MW on Thursday. One megawatt can power about 1,000 U.S. homes on average, but as few as 200 during periods of peak demand.

ERCOT has more than 78,000 MW of generating capacity to meet demand this summer, but has warned low reserves could force it to issue alerts.

Thursday’s alert allowed it to call on all available power supplies, including power from other grids. The spot price has hit $9,000/MWH only four times in the grid’s history.

ERCOT has said its planning reserve margin for this summer was a historically low 7.4% because several generators have retired even as demand rises.

Generators are retiring because power prices have declined in recent years as growing supplies of cheap natural gas from shale formations, like the Permian in West Texas, flood the market. Gas produces a little less than half the electricity in Texas. (Reporting by Gary McWilliams and Scott Disavino; Editing by Richard Chang)