Electricity prices in Texas soared this week, with spot prices breaking above 10,000 per megawatt hour MWh, as utilities scrambled for power supplies to meet surging heating demand amid a brutal cold wave over the state.
Millions of Texans are without power after grid operator The Electric Reliability Council of Texas ERCOT instituted rolling blackouts as electric heating demand caused by the historic winter storm overwhelmed generation, some of which was knocked offline by the extreme weather.
The electricity shortfall caused prices to spike as utilities seek any power they can find.
Nextday power for Wednesday at the ERCOT North hub, which includes the cities of Dallas and Fort Worth, spiked to a record of 8,800 per MWh, a nearly sixfold jump from 1,489.75 on the previous day.
ERCOTs website showed wholesale power prices deliverable over the next five minutes broke above 10,000 per MWh earlier this week.
Real time prices were less than 50 per MWh before the cold blast hit Texas. ERCOTs average real time settlement price was around 9,000 per MWh late on Tuesday.
The surge in prices is due to the simultaneous constriction in supply due to freezeoffs and a surge in demand for heating, said Marshall Steeves, energy markets analyst at IEG Vantage, adding that the price spike is affecting residential and commercial users.
Homeowners who depend on power for home heating will be particularly impacted while businesses and manufacturers will face a spike in rates….