Dive Brief:

• The Texas electric grid could set new energy demand records in the coming week as the state faces triple-digit temperatures in the waning days of spring, according to Electric Reliability Council of Texas.
• Peak demand could reach 82,275 MW on Wednesday, the first day of summer, according to ERCOT estimates. The current record of 80,148 MW was set last July.
• ERCOT announced Monday it has launched a new Contingency Reserve Service that will help to meet demand, and on Thursday the Public Utility Commission of Texas continued its efforts to develop a reliability standard for the electric grid.

Dive Insight:

Thursday’s PUCT meeting was the first since former Chair Peter Lake resigned earlier this month. Texas Gov. Gregg Abbott, R, tapped Interim Chair Kathleen Jackson to lead the commission until a permanent replacement is found.

Jackson is the newest commission member, joining the PUCT in August.

Lake was appointed by Abbott in 2021 following Winter Storm Uri and was tasked with leading efforts to improve grid reliability. Uri resulted in widespread blackouts and led to the death of almost 250 people in the state. 

Under Lake’s leadership the PUCT endorsed a performance credit mechanism designed to ensure existing generation would be available during times of grid stress. But the state legislature authorized a limited implementation of the PCM, largely choosing to incentivize the development of new generation instead.

“We have a lot of work ahead, including implementation of legislation from the recently concluded legislative session,” Jackson said.

On the commission’s to-do list is development of a reliability standard mandated by Texas lawmakers. ERCOT officials briefed the commission on preliminary modeling results and next week will present those findings to the grid operator’s board of directors.

ERCOT’s reliability standard modeling has centered on a 2026 test year using a resource portfolio based on an assessment of the system’s anticipated capacity, demand and reserves. The model includes existing and anticipated new generation, limits on the effective load carrying capabilities of wind, solar and battery resources, and the retirement of some thermal generation.

A reserve margin of 18.46% would result in a 1-in-10 standard, to ensure load shedding occurs only once in a decade, according ERCOT’s presentation. ERCOT does not currently have a reliability standard, but heads into this summer expecting a reserve margin of 23.2%.

“These [scenarios] are all based on the frequency, magnitude and duration framework that we've discussed before,” Woody Rickerson, ERCOT’s vice president of system planning and weatherization, told regulators.

The modeling does not include outages associated with Winter Storm Uri, Rickerson said, because regulators have since passed new weatherization rules designed to address generator failures that occurred during that storm. Developing a reliability standard based on a data set that includes Uri outages would cause outlier events “to look much worse than the vast majority of results” ERCOT modeled, he said, leading to more resources being required to meet a standard.

Before running additional simulations, Rickerson said ERCOT will improve modeling around the relationship between thermal outages and cold weather, potentially incorporate a recently proposed Operating Reserve Demand Curve, or ORDC, multi-step floor pricing approach, and incorporate the impacts of a firm fuel supply service. The ORDC is used by ERCOT to determine when scarcity pricing events occur.

In August, grid officials will go back to the ERCOT board with a progress update.

In the meantime, the Texas grid will face its first heat-related test of the year. Demand is expected to top 80,000 MW for three consecutive days next week, starting on Tuesday. The grid operator anticipates sufficient resources, but observers note coal and gas plant outages are higher than anticipated.

ERCOT’s new contingency reserve service launched this week and will help balance supply and demand during the heat wave, officials said. It requires resources to be available within 10 minutes.

“As summer temperatures begin to rise across Texas and with high demand forecasted, we will continue to use all operational tools available, including implementation of new programs,” ERCOT President and CEO Pablo Vegas said in a statement.