(Bloomberg) — Texas electricity prices soared more than 70-fold as a high number of power-plant outages raised concerns of a potential evening shortfall.
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Spot prices at the North Hub, which includes Dallas, jumped to more than $1,800 a megawatt-hour after 5 pm local time, versus about $26 at the same time Tuesday, according to data from the Electric Reliability Council of Texas. Prices were 165% higher than the cost of supplies secured for the hour in the day-ahead market.
This morning, Ercot, as the state’s main grid operator is known, issued a “watch” for a potential capacity reserve shortage from about 7-9 pm, meaning the buffer of spare supplies could fall to low enough levels to call on back-up generation, cancel or delay outages or curb usage.
The conditions are the tightest of the year so far and raises the risk of prices rising to the $5,000 cap — which they last did on April 16, when Ercot also warned of a potential shortfall.
“Ercot has not called for conservation this evening,” it said by email. “The grid is operating under normal conditions at this time.”
Unusually hot weather in the region has increased demand for cooling and lowered the efficiency of many power plants. Wind output has also failed from a day earlier and there are more outages.
The high prices may force big consumers, including Bitcoin miners, to curtail their operations for a few hours. Batteries are also expected to ramp up to keep the grid stable.
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