Energy Market Update

• Tuesday May 13^th and 14^th saw some May daily weather records broken across Texas. On Tuesday, Houston came in at 95F, breaking a record of 94F going back to 1907 and that was followed on Wednesday (5/14) with a 96 F that broke the 93F record from 1995.  Austin hit its first +100F day of 2025, coming in at 101F on Tuesday, breaking the 98F record from 1925.  San Antonio got to a high of 102F on Wednesday 5/15, breaking the previous record of 97F.  From a load perspective, load reached a peak of 77.9 GW from 5-6 pm CT on May 14^th.
• For the coming week of May 19^th, the divide between northern and southern Texas continues this week with near-record heat in Houston and San Antonio with temperatures in low to mid 90’s in Houston and upper 90’s in Austin. Meanwhile Dallas is closer to the top of the ridge where cooler air from the north is tempering any warmth and temperatures will be in the mid to upper 80’s F. Early-season heat will back down next week with temperatures returning to normal and above normal. However, the models diverge by this time, lowering confidence in the forecast pattern. The overall trend will likely remain that any meaningful warmth will be across southern Texas and less so across the northern part of the state.
• The wind will be blowing this week, averaging 11-14 GW through Thursday and then bumping up to ~20 GW for flat average through the weekend, which should help offset the 20 GW of thermal outages.  Load is expected to reach 76 GW on Tuesday (13^th) and 82 GW on Wednesday. Wind will decline to an average output of 13-16 GW for balance of the week, and this could lead to tighter grid conditions later in the week. Solar will be consistent at 6-7 GW average output all week.

• The forward calendar strips week over week and month over month basis were the following:

Source: ERCOT

ERCOT Real Time Prices

• Real time prices saw their highest prices on Wednesday May 16^th in HE 20 (7-8 pm CT) when 5-minute prices spiked to $3,702/MWh and averaged $1,295/MWh for the hour. 

Source: ERCOT

Wind and Solar Output:

• Solar hit a new preliminary output record of 27,036 MW on May 12^th.  Last week saw overall little price volatility, with the exception of May 8^th when prices spiked to $4,528/MWh at 8-9 pm CT. Wind generation was only ~3.5 GW.  
• Two weeks ago, ERCOT achieved two combined solar and wind renewable output records. The first was for 41,675 MW on April 13^th at 4:40 PM CT and the second was for 41,916 MW at 2:45 PM CT on April 17^th.  See below.  Prices were stable for most of last week.
• Battery capacity saw a Maximum storage record of 5,970 MW on 4/10 at 7:30 pm CT and the 5^th new record in 2025, up from 4,587 MW on February 20^th.

Source: https://www.gridstatus.io/live

Generator Outages:

• Thermal outage season of maintenance peaked at +25 GW earlier in May but have been between 15-20 GW the past few weeks. Look for outages to get down to 5-10 GW post Memorial Day as ERCOT seeks to have sufficient generation online for summer conditions.   

https://www.gridstatus.io/graph/ercot-outages?iso=ercot&outageType=thermal

Source: ERCOT & Grid Status

TX Legislature, PUCT, & ERCOT News:

ERCOT seeks Good Cause Exemption from PUC to Adjust Load Forecasts - At the 5/15 Public Utility Commission of Texas (PUCT) open meeting, ERCOT discussed it request for a good cause exemption to adjust it load forecast for the 2025 Regional Transmission Plan. Under existing protocols resulting from HB 5066, ERCOT is required to include in its forecast all load reflected in officer letter attestations which would result in peak load reaching 218 GW by 2031.  ERCOT proposes to apply a methodology that discounts the load forecast to reflect historical load interconnection patterns that would result in a lower forecast of 145 GW by 2031. ERCOT believes the adjusted forecast is more accurate due to actual experience of previously forecasted loads coming into service at lower megawatt levels and at delayed in-service dates than initially claimed. Specifically, ERCOT proposes to make the following adjustments:

• Remove loads that have not submitted required model information or have only submitted partial information.
• Remove loads designated as "officer letter" but for which attestation letters from a TDSP officer have not been provided.
• Remove loads submitted by transmission-only TSPs.
• Include independent third-party load forecasts in whole or in part as deemed credible by ERCOT.

The PUCT agreed there needs to be a standardized process for all utilities. but had concerns with ERCOT’s proposed methodology since it is unclear whether utilities also applied a discount to the forecasts they provided to ERCOT. The PUCT will continue working with ERCOT and stakeholders to identify alternatives before they are prepared to consider approving the exemption at the next Open Meeting.

ERCOT Update: May 2025 Capacity, Demand & Reserve (CDR) Released

On May 16^th, ERCOT released it biannual Capacity, Demand & Reserve (CDR) report that lists the generation reserve margins for ERCOT for 2026-2030.  This May’s CDR is different in an important way as it now includes the new ERCOT Adjusted Load Forecast, which we discussed in previous weeks.  As a result of load forecasting methodology, TX HB 5066, ERCOT would project a peak load of 218 GW by 2031.  ERCOT’s adjusted load forecast reduces load forecast to 145 GW.  ERCOT’s all time peak load currently is 85,199 MW set in 2024 and the peak forecast for 2025 is 85,759 MW and then 94,159 MW for 2026. Data centers remain the majority of the load growth in ERCOT but how many duplicate data centers is the key question.     

The following table shows the summer peak Load and peak Net Load forecasts for 2026-2030, along with the associated peak load hours:

Source: ERCOT

Planning Reserve Margin for Summer Months

The load growth projections and the limited build out of new thermal resources continue to tighten reserve margins, which based on how load growth progresses could go negative by 2028.  A key factor for reserve margins in summer months is the strength of wind output. 

Source: ERCOT

PUCT Update:

Austin Legislative Update

Large Load Bill Advanced by House Committee - On 5/16, the House State Affairs committee passed its substitute for Senate Bill 6, the Senate-passed large load bill. The substitute was approved with a vote of 11 – 1, with two members present but not voting and another absent. Following the vote, committee chair Ken King commented that the bill remains a work in progress, noting that some members still have concerns about the language.  The committee substitute differs from the Senate version in several key ways:

• Large loads would no longer required to disclose interconnection requests outside of Texas.  The disclosure requirement instead would apply only to requests within Texas.
• Large loads bringing behind-the-meter generation capable of serving the full customer load or agreeing to curtail load at ERCOT's direction for at least 10 years would be expedited through the interconnection queue. If a large load fails to meet its obligation to curtail or deploy backup generation, the PUCT would assess a financial penalty.
• Co-location reviews would be conducted by ERCOT rather than the PUCT.
• As a condition of co-locating with an existing generation resource, the generation resource would be required to make the same amount of capacity available to the grid in advance of anticipated emergency conditions as was available prior to the co-location arrangement.
• All decisions made by ERCOT related to co-located arrangements with existing generation resources would be published on the PUCT website.
• Exemptions from the new co-location review would be granted to customers that register a new generation resource with a large load, regardless of whether the load is energized later or if the large load and generation resource are owned directly or indirectly by a parent company.