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ERCOT: Power demand will not grow as fast as predicted


Power demand in Texas is not growing as quickly as previously forecast, Texas state grid operators said in a report released Friday.

The results were largely anticipated after the release of preliminary findings last month. And the Public Utility Commission already appears to be backing off plans to overhaul the power market that were to address fears of thinning power supplies.

“Although population and the economy continue to grow in the ERCOT region, the relationship between economic growth and peak electric demand has changed in the past several years,” said ERCOT director of system planning Warren Lasher.

“We believe recent improvements to our load forecasting methodology are providing a more realistic view of the future electric demand we need to be prepared to serve,” he said.

In May, ERCOT had projected the state’s power reserves — the amount of power they keep in excess to protect against blackouts — would fall below target by next year. But after revising how it calculates demand, ERCOT projects reserves will not drop to that level until 2017.

Still, the Texas population is growing by more than 1,000 people a day. And with steady economic growth, peak power demand is projected to grow 12 percent to more than 76,000 megawatts by 2023.

The state’s power plant fleet exceeds 75,000 megawatts. But between mechanical troubles and temporary shutdowns, power plants are not always available. Under the current target, Texas would need to add almost 8,000 megawatts of generation capacity over the next decade. That is the equivalent of more than four Comanche Peak nuclear power plants.

The report listed a reserve margin of 13 percent for this summer, below the target of 13.75 percent. But Lasher said the addition of four natural gas-fired plants by Aug. 1 would boost that margin to 16 percent in time for what is usually the hottest part of the year.

Long dependent on large-scale economic indicators to predict power use, ERCOT’s analysts have now moved to a more targeted approach. They look at specific customer groups such as residential and industrial. They are also tracking trends that include more energy-efficient buildings and changes in human behavior.

“One example is when times are tough, people make changes in their behavior and they actually reduce the amount of energy they use,” said Calvin Opheim, manager of load forecasting and analysis at ERCOT. “But what’s interesting is when [the economy] ticks up, they’ve learned these new behaviors and keep using less energy.”

The agency also revised how it uses past weather events to predict future ones after criticism that the brutally hot summer of 2011 was throwing off its forecasts. But Opheim said the new system did not have any significant impact on the forecast released Friday.

State Sen. Troy Fraser, R-Horseshoe Bay, a leading critic of the utility commission’s plan to overhaul the power market, heralded the report as proof that the current system is working.

“As we near what will almost certainly be another hot summer, I will continue a dialogue with the Public Utility Commission, ERCOT and my colleagues in the Legislature to ensure we’re planning appropriately for the needs of a thriving state,” he said in a prepared statement.

The state’s alternative energy sources are expected to continue to grow. Over the next four years, ERCOT is projecting more than 8,000 megawatts of new wind farms. And by 2016, the grid should have an additional 197 megawatts of solar installations, Lasher said.

The report served as a rallying point for critics of a proposed capacity market system, something that the power industry had pushed for in light of significant drop in wholesale power prices. At the forefront were the state’s industrial and manufacturing sectors and consumer groups, which argued that a capacity market would raise electricity prices and make Texas less attractive to business.

“This new report provides further evidence that the current energy-only market is working and that any move to increase prices by subsidizing generation companies would be unfounded,” said R.A. Dyer, policy analyst for the Texas Coalition for Affordable Power.