Cadwalader Alert: Record Breaking Heat Highlights Need for Improved Load Management

Cadwalader Alert: Record Breaking Heat Highlights Need for Improved Load Management

By Ken Irvin and Brenda Hanzl

It's hot in Texas.  Already struggling through the second worst drought in the state's history, many cities in Texas began August with a series of triple digit days, and a significant cool down seems unlikely any time soon.

Record breaking heat has led to record breaking demands for energy.  Texas has both regulated and deregulated electricity markets, with 75% of the state, including most of the cities of Houston and Dallas Fort-Worth, being served by the Electric Reliability Council of Texas ("ERCOT") which operates the electric grid and manages the deregulated market, and the rest of the state, including Austin and San Antonio, being managed by municipalities and other governmental entities.  ERCOT experienced the top eight days of electricity demand in history in August, including an all-time high of 68,294 MW on August 3.[1] The increased demand for energy has caused the wholesale price of energy to skyrocket to up to around 50 times the average daily on-peak wholesale energy price. Both the regulated and deregulated energy markets are struggling to manage the incredible demand.

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