Power prices in Texas for Tuesday topped $2,500 per megawatt hour (MWh) in the day-ahead market on expectations demand would reach record levels as homes and businesses crank up their air conditioners to escape the first heat wave of the 2023 summer.
The Electric Reliability Council of Texas (ERCOT), which forecast the record demand, operates the grid for more than 26 million customers representing about 90% of the state's power load. ERCOT has said it has enough resources to meet demand.
Extreme weather is a reminder of the 2021 February freeze that left millions of Texans without power, water and heat for days during a deadly storm as ERCOT scrambled to prevent a grid collapse after an unusually large amount of generation shut.
AccuWeather forecast temperatures in Houston, the biggest city in Texas, will hit 101 degrees Fahrenheit (38.3 degrees Celsius) on Tuesday. That compares with a normal high of 93 F for this time of year.
ERCOT forecast power use would reach 81,786 megawatts (MW) on Tuesday before slipping to 80,991 MW on Wednesday.
Tuesday's high would top the grid's current record peak of 80,148 MW on July 20, 2022.
One megawatt can power around 1,000 U.S. homes on a typical day, but only about 200 homes on a hot summer day in Texas.
Day-ahead power prices for Tuesday settled around $2,500 per MWh at 5 p.m. local time in several zones, including Houston and Dallas, according to the ERCOT website.
That compares with next-day prices at the ERCOT North Hub , which includes Dallas, that traded for $37 per MWh for the peak hours during the day on Monday, the U.S. Juneteenth holiday.
Next-day prices at ERCOT North have averaged $30 per MWh so far this year, $78 in 2022 and a five-year (2018-2022) average of $66.