Texas wholesale electric prices spike more than 10,000% amid outages

The spot price of wholesale electricity on the Texas power grid spiked more than 10,000% on Monday amid a deep freeze across the state and rolling outages among power producers, according to data on the grid operator’s website.

Real-time wholesale market prices on the power grid operated by the Electric Reliability Council of Texas (ERCOT) were more than $9,000 per megawatt hour late Monday morning, compared with pre-storm prices of less than $50 per megawatt hour, according to ERCOT data.

The surge reflects the real-time megawatt hour price of electricity and the cost of congestion and losses at different points across the grid. Early on Monday, ERCOT said extreme weather conditions forced many power generating units off the grid, upending the supply of electricity.

ERCOT did not respond to an email message about the spike in wholesale electricity prices.

On Feb. 10, well before inclement weather hit Texas, spot wholesale prices on ERCOT settled around $30 per megawatt hour at the end of the day, ERCOT data show. But on Sunday, the price per megawatt hour surged past $9,000 on the grid.

ERCOT can be more susceptible to wholesale price spikes because it does not have a capacity market, which pays power plants to be on standby during peak demand and weather emergencies, for example. ERCOT’s model means consumers are not paying for generation that may never be called into action.

But early on Monday, ERCOT said extreme weather conditions caused many generating units – across all fuel types – to trip offline and become unavailable. That forced more than 30,000 megawatts of power generation off the grid, ERCOT said in a news release.