Texas grid operator seeks more power reserves to avoid winter shortages
Justin Sullivan/Getty Images News
Texas' ERCOT grid operator sought bids from power producers Monday to secure an extra 3K MW of power reserves this winter to avoid an "unacceptable" risk of an emergency in extreme conditions.
ERCOT estimates a nearly 20% probability that the state grid it manages will enter into an energy emergency alert in case of a repeat of last December's Elliott storm, and procuring 3K MW would cut the probability to less than 10%.
ERCOT said it is not forecasting energy emergency conditions for the upcoming winter season, but wants to "be prepared and ensure all available tools are readily available if needed."
A market notice said offers from mothballed or decommissioned units could include a 10%-plus "Incentive Factor that reflects the revenues the unit owner determines would be necessary to bring the unit back to operation."
The largest plants on ERCOT's mothball list are the 840 MW J.T. Deely coal-fired plant that CPS Energy closed in 2018 and a 292 MW unit at Talen Energy's Barney Davis gas-fired plant scheduled for closure on December 1.
Potentially relevant stocks include Vistra (NYSE:VST), NRG Energy (NYSE:NRG), Constellation Energy (CEG), CenterPoint Energy (NYSE:CNP), American Electric Power (AEP) and Sempra (SRE).
ERCOT, which operates the grid for more than 26M customers, hit an all-time high peak demand of 85,435 MW on August 10.

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