Most ERCOT market participants have come to grips with the fact that “9-ish percent” reserve margins are likely “the new normal” in Texas’ energy-only market. Market reliability has been the story of the last 25 years in Texas.
As temperatures climbed into the triple digits this summer, big commercial and industrial companies shut down production lines, sent employees home and fired up backup generators. These moves, however, weren’t made to avoid the temporary spikes that sent wholesale electricity prices soaring to the maximum $9,000 per megawatt hour, but rather to cut their transmission costs throughout the year — and ultimately shift them to consumers and small businesses.