Texas power demand to hit record high for month of May next week

By Scott DiSavino

(Reuters) - Power use in Texas will likely break records for the month of May next week as homes and businesses crank up their air conditioners to escape a spring heat wave, the state's electric grid operator projected on Friday.

That heat will follow severe storms that pummeled the Houston area with hurricane-force winds on Thursday, killing at least four people, blowing windows out of high-rise buildings and leaving some 800,000 homes and businesses without power as much of the city was plunged into darkness.

Extreme weather in Texas is reminiscent of the February freeze in 2021 that left millions without power, water and heat for days and resulted in over 200 deaths as the state's grid operator scrambled to prevent the power system from collapsing.

That grid operator, the Electric Reliability Council of Texas (ERCOT), forecast electric demand would soar from 57,486 megawatts (MW) on Friday to 71,893 MW on May 20, 72,725 MW on May 21 and 74,346 MW on May 24.

Next week's peaks would top the current record for the month of May of 71,645 MW set in 2022, according to ERCOT. The grid's all-time peak was 85,508 MW on Aug. 10, 2023.

Analysts expect ERCOT electric use will break that all-time peak this summer with economic and population growth in Texas and demand for power from data centers, artificial intelligence (AI) and cryptocurrency mining rising fast.

One megawatt can usually power about 800 homes on a normal day but as little as 200 homes on a hot day in Texas.

High temperatures in Houston, the biggest city in Texas, will jump from 82 degrees Fahrenheit (27.8 Celsius) on Friday to the low to mid 90s F from May 18-29, according to meteorologists at AccuWeather. The normal high in Houston at this time of year is 86 F.

Earlier this week when the weather was forecast to be even hotter over the weekend, ERCOT warned of a "possible future Emergency Condition of reserve capacity deficiency" on Friday and Saturday.

With less heat now expected this weekend after the severe storms that reduced power demand by knocking out service to hundreds of thousands of homes and businesses, ERCOT said late Thursday it no longer sees the need to seek additional capacity on Friday and Saturday.

In the spot market, next-day power prices at the ERCOT North Hub, which includes Dallas, soared to a one-week high of $120 per megawatt hour (MWh) for Friday, up from $40 for Thursday, according to pricing data on the LSEG terminal.

That compares with an average of $30 per MWh so far this year, $80 in 2023 and $66 over the prior five years (2018-2022).

Day-ahead prices on the ERCOT website, meanwhile, soared to $688 per MWh for one hour late on Friday.

(Reporting by Scott DiSavino; Editing by Bill Berkrot)