Last week, officials from the Public Utility Commission of Texas and the Electric Reliability Council of Texas (ERCOT), which runs that state's main power grid, updated legislators on Texas' generation adequacy and ability to meet peak electricity usage this summer.
As SaveOnEnergy.com has previously noted, the state has only a razor-thin margin of "excess" power (called a reserve margin) to call upon on days when it is extremely hot, and additional power is needed above even the typical summer peak.
Officials told lawmakers that the picture remains bleak, and that if last summer's weather is repeated, the state would need conservation -- on top of the level of conservation seen in 2011 -- to avoid rolling outages and keep the lights on.
H.B. "Trip" Doggett, CEO of ERCOT, told lawmakers that from 2013 onward, the state will not have enough reserve capacity unless companies start building more power plants. "Making matters worse were last summer's extreme heat, which set records for demand, and the ongoing drought, which reduces the needed water flow to power plants," according to the Star-Telegram.
"We have to have conservation, and everyone made a tremendous difference during the peak of hot, summer days (last) August. We have to have that, plus some, to survive this summer without rotating power outages," Doggett told the House State Affairs Committee.
Aside from the risk of rolling outages, the shortage of generation will lead to higher electric rates -- both in the wholesale market, and eventually the retail market. Last summer, wholesale electric rates routinely hit the equivalent of $3 per kilowatt-hour (which is the cap on wholesale prices), while the lowest retail electric rates in Texas are currently 8 or 9 cents per kilowatt-hour.
With an even greater supply/demand imbalance this summer, wholesale electric prices will reach the wholesale price cap more frequently, forcing retail electric providers to raise their electric rates, as they must buy incremental power supplies needed for customers' "super-peak" usage on record-setting summer days at these high wholesale prices.
Customers can shield themselves from any looming hike in Texas electric rates by shopping for a low electric rate. Texas electric rates are still at the lowest levels seen in the past decade, making now the perfect time to make sure you're getting the lowest rate possible. By making electric suppliers compete for your business, you're guaranteed the lowest rate, and can ensure that you find a low electric rate before the summer price spikes hit.