Texas Summer 2015 Energy Outlook

If you’re trying to plan your summer budget, you know that summer brings those often expensive summer cooling costs. But in Texas, electricity costs are driven by more than just the weather. The electricity industry itself can complicate things, and this year is no exception. So, to help you get a feel for what’s coming, here’s our Texas Summer Energy Outlook.

Texas Weather Forecast

The good news is that the state can expect a cooler summer. NOAA predicts that Texas temperatures will remain below average for May, but become less widespread below-normal across the state from June through August. NOAA’s seasonal forecast is for elevated chances for below normal temps throughout the southwest and southern plains.

This is partly the result of the late-arriving weak El Niño strengthening over time and continuing through autumn. El Niño typically brings more rainfall to Texas. Texas temperatures during El Niño tend to be somewhat cooler during the winter months and spring months. Cooler than normal temperatures are also forecast into the October-November-December season for now —but that’s also six months out. How cool is “below normal”? Though based on statistical norms, broadly speaking, it can run anywhere from 2°F to 10°F depending where you are in the state.

Cooler temperatures this summer not only mean lower air conditioning bills, but they also mean less natural gas will be needed to generate electricity —which may help continue keeping that fuel price low.

New EPA Regulations

The EPA Mercury and Air Toxics Standard (MATS) took effect on 16 April 2015. Several companies and 20 states filed suit against the EPA regulations which was heard before the US Supreme Court on March 25 saying the costs are too high. The North American Electric Reliability Corp (NERC) also said that the US electric industry isn’t ready to meet the requirements of the EPA’s Clean Power Plan (CPP). The court is not expected to announce a decision until June. About 600 powerplants could be affected and most of them in the south and midwest.

Meanwhile, Texas has been adding more generation capacity with 1.7 gigawatts of new natural gas generation and this past year wind power supported over 10% of demand. This past March, coal only generated about 5 gWh due to planned outages of about one third of the coal fleet.

ERCOT’s Summer Forecast

Even before the Supreme Court took up the recent MATS matter, ERCOT released its Seasonal Assessment of Resource Adequacy (SARA) for this summer back in the beginning of March. In spite of the EPA regulations, ERCOT does not expect “changes to available generation capacity for the summer season due to compliance with the Cross-State Air Pollution Rule (CSAPR) or Mercury and Air Toxics Standards (MATS).”

ERCOT expects a peak demand this spring of about 62,000 MW with the tightest capacity occurring towards the end of May when the highest number of generating sources will be shut down for maintenance. Preliminary summer estimates expect a peak demand of 69,000 MW. Last summer was expected to be hotter than it actually was and had a peak demand of only 66,454 MW on Aug. 25. Both spring and summer on-hand capacity is ample, rated at over 76,000 MW.

Your Summer Energy Bill

With NOAA forcasting “below normal” seasonal temperatures, ERCOT’s summer peak demand will probably have revised data when it’s finally released. The EIA projects that natural gas storage injections during this coming summer will the the fourth highest, ending in a net injection of 2,310 Bcf by October with total stored amounts for winter totalling 3,781 Bcf.

All this points to a Texas summer with reliable electricity supply, inexpensive fuel for generation, and temperatures that will help you economize on your home cooing costs without making you or your family break into a sweat.

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