Dive Brief:

• The Texas electric grid is bracing for record winter peak demand next week, as a cold snap is expected to drive heating consumption. A new all-time winter system peak record is possible Monday morning, the Electric Reliability Council of Texas (ERCOT) warned on Thursday. 
• The grid operator also sent a message to market participants on Monday, warning generators to "prepare to preserve fuel to best serve peak load, and notify ERCOT of any known or anticipated fuel restrictions."
• ERCOT's current winter peak demand record is 65,915 MW, which was set in January 2018. The grid operator issued a Seasonal Assessment of Resource Adequacy (SARA) report in November that forecast a winter peak demand this season of 57,699 MW.

Dive Insight:

The November SARA report identified almost 83,000 MW of resource capacity that ERCOT expected to be available to meet winter peak. But Texas is experiencing a stretch of cold temperatures that is expected to culminate next week, and the grid operator wants to be prepared.

"This statewide weather system is expected to bring Texas the coldest weather we’ve experienced in decades," ERCOT President and CEO Bill Magness said in a statement. "With temperatures rapidly declining, we are already seeing high electric use and anticipating record-breaking demand in the ERCOT region."

Higher peak demand could cause Texas electricity prices to soar. When the state set its January 2018 winter peak demand record, prices briefly topped $2,200/MWh.

ERCOT's message to market participants said the grid operator expected temperatures to remain at 32F or below from Thursday to Monday. Generators were asked to review fuel supplies, notify ERCOT "of any known or anticipated fuel restrictions," identify planned outages and "consider delaying maintenance or returning from outage early."

Market participants were also asked to review and implement winterization procedures, and notify ERCOT of "any changes or conditions that could affect system reliability."

ERCOT also said it is working with transmission operators to "minimize transmission outages that could reduce the availability of generation or otherwise impact the ability of the system to serve demand."

The Public Utility Commission of Texas (PUCT) issued a statement saying it has been "working closely with government entities, ERCOT, and other organizations across the power industry to prepare to have adequate resources in the coming days."

"Plummeting temperatures predicted for the next few days will place significant demand on the ERCOT grid," said PUCT Chairman DeAnn Walker said. "The electric system response under stress will, as always, require significant coordination."

A spokesperson for Oncor Electric said the state's largest utility is monitoring weather impacts, and has resources and personnel on hand to address any outages. "Right now, generators across the state are generating enough power to meet the demand," utility representative Kerri Dunn said in an email. 

ERCOT is typically a summer peaking system, driven by air conditioning use. The system's record peak demand of 74,820 MW was set in August 2019.