Wholesale electricity prices have reached $5,000 per megawatt-hour at Harris, and it has blamed it on congested transmission lines.  - Houston Chronicle

Wholesale electricity prices have reached $5,000 per megawatt-hour at Harris, and it has blamed it on congested transmission lines. – Houston Chronicle

By late Monday afternoon, a 30-minute car ride around Matagorda Bay meant a $3,653.44 difference in the price of a megawatt-hour of electricity.

With soaring energy demand, transportation bottlenecks limiting supplies to the Houston area, and the wholesale price of energy in Harris County jumping to $5,500 per megawatt-hour, compared to prices that typically average around $30. Meanwhile, on the other side of the bottleneck, just south of Matagorda Bay, power that had nowhere to go has flooded the market and driven prices into negative numbers for much of the day — meaning generators have had to pay customers for electricity.

It’s hard to pinpoint the exact reason why energy prices have fallen in many counties south of Matagorda Bay while prices have risen to the north, but Doug Lowen, president of energy consultancy Stoic Energy, said the evidence points to congested transmission lines.

Although energy demand was high in Houston, it was likely that there was not enough space on transmission lines to carry it from the South, where supplies were plentiful. If power generators add too much power to transmission lines at once, they can risk overburdening the system, Lewin said, which is one reason the Texas Electric Reliability Board, the state’s electric grid manager, is cutting the price in those areas to encourage them. To stop the flow of energy to the grid.

“The power is behind crowding,” Lewin said. That is why the network operator will cut prices, you just need to tell this generator to shut down, stop producing power and send it to the lines. Because if the equipment is overburdened, they can experience a power outage.”

As a result, energy prices have varied widely across the state.

A generator in the southern province of Matagorda reported receiving more than $1,800 per megawatt-hour in the wholesale electricity market around 4:30 p.m. of the energy she was putting on the grid. The two generators were located about 30 miles apart from each other.

ERCOT warned last week of potential aggravating network conditions as high temperatures on Saturday and Sunday rose above 93 degrees in most of the Houston area and still higher in Central Texas. On Monday, demand reached 71,000 megawatts, a record for the month of May. One megawatt of electricity is enough to power 200 homes on a hot day.

In the Houston area, the situation was complicated by a fire at the WA Parish power plant in Richmond. No one was hurt in the fire, but it caused a unit capable of generating 610 megawatts to stop.

The plant’s owner, Houston Energy NRG, said it would begin an investigation into the cause of the fire and the extent of damage to the unit once it was safe to enter. The NRG did not have an estimate of when the unit would return to service. The power generation capacity of Western Australia is about 3,600 megawatts.

“NRG owns a number of generating units across the state, and we are working to ensure that all of these units are operational to provide power to the region,” the company said in a statement.

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By 4:15 p.m., the wholesale price for power in most of the Houston area had jumped above the cap set by the Public Utilities Commission after the February 2021 freeze. A Northeast Harris County power generator offered to sell power to the grid for $5,436.14 per megawatt-hour at 4 :21 p.m., although the maximum price set by PUC is $5,000 per megawatt-hour.

“Pricing has already been exceeded, but only at certain resource points, not at the system level,” ERCOT said in a statement. “The cap is a cap on supply, not a cap on price, so congestion can drive prices when certain resources are held above the supply ceiling.”

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