Article by Jason Ma, published on fortune.com on 5/18/2024.
Texas – Hotter temperatures in Texas are predicted to cause record-breaking energy use in May, leading to a significant rise in electricity prices.
The Electric Reliability Council of Texas (ERCOT) expects demand to increase from 57,486 MW on Friday to 74,346 MW by May 24, potentially surpassing the May record of 71,645 MW set in 2022.
High temperatures in cities like Houston and Dallas are driving increased air conditioning use. Spot market electricity prices surged, with ERCOT’s north hub next-day prices rising from $40 to $120 per MWh and day-ahead prices spiking to $688 per MWh, a 1,600% increase.
Despite a deregulated power market, consumer prices are affected by contract types, and providers are restricted from passing wholesale prices fully to residential customers since February 2021. Texas has seen growing power demand due to population influx, increased bitcoin mining, and the expansion of data centers and AI technology, further straining the grid.
