Texas electricity demand growing slower than once thought

HOUSTON — Texas electricity use during summer peak times is increasing slower than once thought, according to a report released Friday morning by the state grid manager.

Technology has improved the power efficiency of appliances and gadgets, largely canceling out the growing electricity demands of Texas’ expanding population.

The report from the Electric Reliability Council of Texas, which oversees most of the Texas grid, shows that the reserve margin for power generation — the safety net if demand climbs higher than expected, or if a plant goes down — will grow to 16 percent by August. That’s well above the current target of 13.75 percent.

Earlier power demand estimates raised concerns that the reserve margin could fall as low as 10 percent by the end of the decade. That fueled a policy debate over electricity reliability in Texasspurred by threats of blackouts in the blistering summer of 2012.

The new study, called the Capacity, Demand and Reserve Report measures the expected growth in demand of electricity, as well as the expected future capacity available. It uses a different formula to forecast demand and reflects slower-than-once-expected growth in the state’s power needs because of new energy efficiencies.

“While we continue to expect strong economic growth in the region resulting in strong growth in overall [electricity] consumption, our view is that growth at the peak time will not be as strong as we have forecasted in the past,” Warren Lasher, ERCOT director of system planning, told reporters in a conference call on the report.

Grid debate

The new report will help inform a debate on whether it is necessary to modify the Texas electricity market to ensure the construction of needed capacity.

The Texas grid is the sole “energy-only” market in the United States. In an energy-only market, generators pay all costs of new generation — including costly financing for constructing power plants — and are only paid for electricity generation used. Regulators have discussed a possible move to some form of “capacity-market”, which allows payments to generators for available capacity even if it is not used.

Industrial and manufacturing representatives, who have actively opposed a capacity-market because of the perceived higher costs they would shoulder, have responded enthusiastically to the new report.

“The state’s reserve levels are more than adequate to reliably and economically serve customers’ needs into the foreseeable future,” said Tony Bennett, president of the Texas Association of Manufacturers, in a written statement. The ERCOT report “reinforces that reserves in Texas are in good shape.”

The reserve margin for the summer has also benefited from four new natural gas plants with a total of more than 2,000 megawatts of capacity expected to come on line in time for the summer peak.

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