ERCOT sees another tight summer for Texas power supplies in 2013

March 1 (Reuters) - The power grid operator for most of Texas said Friday the amount of electricity available to serve consumers will be tight again this summer as projected demand grows faster than generation is being built to serve those needs.

"Current estimates indicate that we likely will see very tight conditions on the hottest days," Kent Saathoff, vice president of Grid Operations and System Planning for the regional grid operator Electric Reliability Council of Texas (ERCOT), said in a statement.

"There is a significant chance that ERCOT will need to issue Energy Emergency Alerts and appeal to consumers to reduce their energy use on some of those days," Saathoff said.

ERCOT said sufficient resources will be available to meet anticipated spring demand, as long as extreme weather well beyond expected conditions does not occur during the early part of the season when power plants are undergoing maintenance to prepare for summer.

ERCOT also said its preliminary summer assessment anticipates a peak demand of 67,998 megawatts (MW), based on a weather outlook similar to that of 2010 and a slower-growth economic outlook.

The grid operator anticipates 73,708 MW of generation capacity before accounting for power plant outages, which typically total about 2,600 MW during an operating day.

The assessment counts wind power at 8.7 percent of its installed capacity. ERCOT has the most wind power in the nation with about 10,400 MW installed. ERCOT said its stakeholders are evaluating whether to increase the capacity value of wind based on performance in recent years.

One megawatt can serve about 200 homes during peak demand periods.

"Although we expect to have more resources available for summer demands than we projected at this time in 2012, we also expect higher demand this year," Saathoff said.

"Current trends call for a summer that is hotter and drier than normal," Chris Coleman, ERCOT meteorologist, said in the release. "Although we don't anticipate prolonged heat waves like those in 2011, we expect conditions in many areas to be similar to 2012."

ALL-TIME RECORD

The ERCOT region's all-time record peak occurred on Aug. 3, 2011, when consumer demand hit 68,305 MW. Power demands in the ERCOT region are highest in summer, primarily due to air conditioning use in homes and businesses.

Although the summer of 2012 was much milder than the record-breaking conditions that marked the previous year, ERCOT still experienced new monthly peaks in June, July and September.

ERCOT said it would release its final assessment for summer 2013 in May.

ERCOT said it will continue to assess conditions to determine if additional actions should be taken to help protect system reliability this summer, including the return of some "mothballed" units.

Texas utility regulators in 2012 increased ERCOT's offer cap, the highest price at which power can be offered into the market, to ${esc.dollar}4,500 per megawatt-hour (MWh) in August 2012, with annual incremental increases scheduled up to ${esc.dollar}9,000 in summer 2015. The cap will go up to ${esc.dollar}5,000 per MWh this summer.

ERCOT said it is also working on demand response programs to encourage consumers to use less power during the periods of highest demand.

The biggest transmission and generation companies in ERCOT include units of privately held Energy Future Holdings, CenterPoint Energy Inc, American Electric Power Co Inc , PNM Resources Inc, NRG Energy Inc, Exelon Corp, NextEra Energy Inc and Calpine Corp .