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01/23/2014

ERCOT looking at reducing its Texas power demand forecast

The state's largest power grid is considering a significant reduction in its 10-year forecast of electricity demand in the state, according to a preliminary report it released today. The move by the Electric Reliability Council of Texas could impact the current debate over whether Texas has enough electricity, a concern driving current efforts to give generators more financial incentive to boost power supplies.

Under a new forecasting model, ERCOT would trim its expected annual growth rate in peak electricity use to an average of 1.3 percent a year, compared to previous forecasts that were as high as 2.5 percent a year. ERCOT said the change reflects the fact that "the relationship between economic growth and electric demand has changed in recent years," with peak demand growing slower than the economy. The new forecast addresses this "decoupling," according to a summary of the changes posted on ERCOT's web site. That report is available here, and includes links to additional background on the matter.

ERCOT spokeswoman Robbie Searcy said the changes are being reviewed by various stakeholders. The other important part of ERCOT's outlook, its latest forecast of the supply of available power generation to meet demand, could be released in late February, she said. A lower demand outlook would indicate that the supply could also grow less and still maintain a good reserve margin. The Public Utility Commission has been debating changes to the state's deregulated electricity market in an effort to make sure generators have enough financial incentive to add new capacity and avoid power shortages in the future. 

-- Jim Fuquay

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