By Mike Moyer, Power Market Compliance Services Specialist
Over the past few years, ERCOT has taken several initiatives to improve grid conditions in the Texas electric market. The goal is to have a sufficient supply of generation to meet demand and maintain capacity reserves for grid reliability during the peak in the upcoming summer and winter periods. Key Initiatives are:
Transmission Planning
In 2024, ERCOT completed a study which identified the near-term transmission needs. There has been an unprecedented amount of growth in Texas led by large load interconnections such as new data centers, AI, crypto mining, hydrogen related manufacturing and others.
This load growth along with the amount of congestion that currently exists on the system has led to discussions about introducing a 765kV infrastructure to the Texas grid. The addition of 765kV transmission would enable power to move more efficiently across long distance lines to these new load centers.
Ancillary Services Methodology
ERCOT has proposed changes to their Ancillary Services Methodology and is pending approval from the Public Utility Commission. The changes are designed to improve system reliability by considering system inertia, load variability and intermittent renewable resources. ERCOT also reviewed changes that could be made to better handle extreme scenarios, such as hurricanes and winter events.
Load Forecasts and Resource Adequacy
Load forecasts to anticipate peak demand periods are published monthly by ERCOT. The current load forecasts are projected out to 2033, to provide insights into expected demand patterns, aiding in resource planning and grid management. The Monthly Outlook for Resource Adequacy (MORA) report forecasts potential risks under an Energy Emergency Alert or during controlled outages. The report uses probability-based modeling to predict insufficient operating reserves during peak demand periods.
Grid Reliability and Resiliency Assessment
The Grid Reliability and Resiliency Assessment (GRRA) created in 2024 by ERCOT, identified reinforcements to the transmission system in Texas that need to be made, including hardening of many substations. These upgrades would enhance system resilience during extreme scenarios.
For the 2025 summer period in the ERCOT electric market, the Capacity, Demand and Reserves (CDR) report shows that planning reserve margins are projected to decrease compared to last year and the peak Net Load hour margin is expected to enter negative territory, beginning in the 2026 summer period.
ERCOT anticipates a significant increase in electricity demand for the summer of 2025 brought on by strong economic growth, increases in population and the rise of large load interconnections.
The Texas Legislature and state regulators are working together to apply measures to enhance grid reliability and infrastructure readiness. On the consumer side, electricity rates in the state are projected to remain at levels seen in 2024, with residential rates averaging between .15-.18 per kWh, including delivery costs. The most favorable pricing is seen in longer term contracts, 24 to 36 months.
ERCOT is proactively addressing these areas of concern to ensure grid reliability is maintained during the upcoming hot summer months in Texas.