Bill Thomas has let us know that summer pricing is rising significantly for 2018, due to three large coal plants shutting down in ERCOT.  If you are in ERCOT, buy your energy on the open market, and do not already have a contract that goes through the summer, you should probably get in touch with Bill.  His phone number is 361-992-1800, and his email is bill@thomasengineering-inc.com.

Here is what Bill sent me:

I have been pricing contract renewals for those TCGA member gins that contract their power through the TCGA’s Retail Electric Program over the past several weeks.  For those gins that have contracts expiring over the next few months I am seeing higher electric power prices due to decreased generation reserve capacity assets operating in the ERCOT region.  This is due to three large coal plants that will be closed permanently before the summer peak season.  A once hefty reserve margin of 21%+ is now down to approximately 10% for the 2018 summer peak season.  Reserve capacities for the next several summers are forecasted to be only slightly higher.  You can read the following ERCOT reports at the web addresses listed below.

Grid operator predicts record-breaking peak demand this summerhttp://ercot.com/news/releases/show/149147

New report shows tightening electricity reserve marginshttp://ercot.com/news/releases/show/144305

 

ERCOT is projecting a new summer peak demand due to a forecasted hotter summer.  With the projected shortfall in generation capacity I would expect to see Real Time Power prices to potentially be much greater this summer during July, August and September.  For those ginners on a Real Time Pricing Contract I would suggest that they get with their retailer to discuss the potential of much higher pricing and the options available to them.  Changing to a flat fixed pricing product now would be much cheaper than trying to change to a flat fixed price during the summer when the real time power prices are high.  Keep in mind that the market cap for real time prices in the ERCOT service area is $9,000 per MW, or $9.00 per kWh.  If a ginner was running their 1,000 kW gin for one hour during a $9,000/mW real time price spike, their electricity cost would be $9,000 for just that one hour.