Texas residents signing up or changing their electricity provider these last few weeks have faced high electricity rate in TX as hotter-than-usual temperatures cause demand for electricity to soar across the state. Exacerbating the problem, the primary driver of record consumption has been the rapid growth in Texas’ population as well as the economy.
Electricity usage in Texas has broken daily record highs 10 times in the summer of 2023, and electricity usage hit its most recent record of 85,435 megawatts on August 10, 2023, according to ERCOT.
Texas Population Increases Drive Electricity Use
Rising population explains almost all the structural increase in power consumption over the last two decades. Power consumption increased at an annual rate of 1.7% between 2003 and 2022 in conjunction with the population increase of 1.6%. Given underlying load growth, consumption will continue hitting new records each summer unless temperatures somehow drop below average, which is less and less likely every year. In May, before the current heatwave, consumption hit 36.4 billion kWh, up from 29.3 billion kWh in May of 2013 and just 26.9 kWh in May of 2003.
Hot weather has not caused rolling outages in Texas since 2006. But operators of the state’s grid have entered recent summers warning of the possibility of lower power reserves as a crush of new residents strains an independent system.
Heat + Growth = Higher Electric Rates
The stagnant heatwave continues to force residents to crank up their air-conditioning demand in homes and businesses. Temperatures in the state have been above the long-term seasonal average on 58 of the last 60 days.
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Consequently, the Texas grid continues to face the same reliability challenges to keep up with demand due to growth. Texans were paying about $275 per megawatt-hour for power on Saturday then the cost rose more than 800% to a whopping $2,500 per megawatt-hour on Sunday while prices on Monday topped out at $915/kWh.
ERCOT issued a weather watch for Monday, warning customers that the state may see higher temperatures, which will in turn put heavier demand on its electrical grid. The energy provider assured customers there is currently enough capacity to meet forecasted demand as temperatures are expected to reach between 102 and 108 degrees throughout the state. Texas has seen 26 straight days of above 100-degree temperatures.
This week’s expected electricity demand will mark ERCOT’s first big test since its grid crashed in the 2021 ice storm. Texas lawmakers say the grid is more reliable, but legislation passed this year designed to help the grid has drawn criticism.
Texas mostly relies on natural gas for power, which made up more than 40% of generation last year. Wind accounted for about 25%, with solar and nuclear energy also in the mix.
Texas’ grid is still not connected to the rest of the country, unlike others in the U.S. Even though solar power in Texas has increased significantly over the past few years, there are ZERO options to pull power from elsewhere if there are failures. Regulators continue to warn that demand will outpace supply on the hottest days.