{"id":2868,"date":"2012-07-05T16:21:24","date_gmt":"2012-07-05T16:21:24","guid":{"rendered":"http:\/\/blogs.edf.org\/energyexchange\/?p=2868"},"modified":"2012-07-05T16:21:24","modified_gmt":"2012-07-05T16:21:24","slug":"forecasting-calamity-in-texas","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/energyexchange\/2012\/07\/05\/forecasting-calamity-in-texas\/","title":{"rendered":"Forecasting Calamity In Texas"},"content":{"rendered":"
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(Credit: www.newsinarlington.com)<\/figcaption><\/figure>\n

We\u2019ve already had a spring of record highs, and now a June that is breaking records for electric demand (in June and<\/span> July<\/a>), including a peak demand that has already surpassed the projected peak demand for this summer \u2013which we usually don\u2019t hit until August.\u00a0 Also, in an important decision last week \u2013 albeit one that won\u2019t really change much this summer except for wholesale electric prices \u2013 the Public Utility Commission (PUC) voted 2-0 to raise the cap on energy bids in the electric market.\u00a0 Given all of this activity over the past few weeks, one of the most interesting things to see has been the shift of focus from this summer to the next few summers, specifically 2014 and 2015, without stopping to consider why that time frame was chosen as a focus.<\/p>\n

It all comes down to one obscure forecast, one that has almost nothing to do with energy: the Moody\u2019s non-farm employment forecast.<\/a> The energy crunch on the horizon that has everyone worried is a direct result of projected growth in demand in 2014\/2015, derived from Moody\u2019s projection that employment will remain fairly level in the near term, followed by a drastic increase in Texas employment around 2014.\u00a0 Economic forces, in particular low natural gas prices and the need to further reduce pollution, will force some older, inefficient power plants out of the market, but the overwhelming factor is the projected ramp-up in demand in two years.<\/p>\n

An important question arises that hasn\u2019t been fully explored: why 2014, could it be later, or even sooner?\u00a0 Today\u2019s report on Texas Economic Indicators<\/a> from the Federal Reserve Bank of Dallas has good news: \u201cTexas factory activity surged in June\u2026 posting its strongest reading in 15 months,\u201d which is welcome news of continued economic expansion in Texas, but is our electric grid ready to handle this spike in demand?\u00a0 Tomorrow, the Bureau of Labor and Statistics<\/a> will release its monthly unemployment numbers, which will have additional relevance for Texas as we struggle to meet electric demand in the face of record temperatures and economically-driven population growth.<\/p>\n

The truth is, as with most projections, ERCOT\u2019s planning process involves a little bit of art combined with a lot of analysis, and with every new national and local report on employment indicators the near term risks to our electric grid may shift.\u00a0 As such, it\u2019s important to realize that the major decisions currently being made at ERCOT and the PUC are largely the result of a single forecast with a highly time-dependent factor.<\/p>\n

We won\u2019t know how accurate these forecasts are until after the fact, but the decisions being made in Texas right now will have substantial, long-lasting effects on electric rates and customers.\u00a0 Those effects haven\u2019t been fully examined by the PUC, as the Houston Chronicle pointed out<\/a> last week.\u00a0 Historically the PUC has hesitated to take on clean energy policies purportedly out of concern for their impact on consumer rates, so it\u2019s unclear why that analysis hasn\u2019t been undertaken for such major market changes.\u00a0<\/p>\n

What is clear is that these changes don\u2019t do much to address real long term issues like water shortages, rising costs associated with fossil fuels and the flexibility to adapt to future economic conditions.\u00a0 The recent Brattle reports \u2013 one<\/a> showing that demand response is needed to maintain future reliability and another<\/a> showing that solar power will help reduce electric costs \u2013 point to key steps the PUC can take to help customers deal with rising costs the will result from other PUC decisions.<\/p>\n","protected":false},"excerpt":{"rendered":"

We\u2019ve already had a spring of record highs, and now a June that is breaking records for electric demand (in June and July), including a peak demand that has already surpassed the projected peak demand for this summer \u2013which we usually don\u2019t hit until August.\u00a0 Also, in an important decision last week \u2013 albeit one …<\/p>\n","protected":false},"author":1508,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[38678,181],"tags":[],"coauthors":[],"class_list":["post-2868","post","type-post","status-publish","format-standard","hentry","category-demand-response","category-texas"],"acf":[],"yoast_head":"\nForecasting Calamity In Texas - Energy Exchange<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/blogs.edf.org\/energyexchange\/2012\/07\/05\/forecasting-calamity-in-texas\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Forecasting Calamity In Texas - 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