U.S. power and natgas prices spike in Texas and California heatwaves

(Reuters) - Power and natural gas prices in Texas and California spiked this week to their highest levels in months as homes and businesses cranked up air conditioners to escape brutal heatwaves.

The Electric Reliability Council of Texas (ERCOT), which operates most of the state's power system, urged consumers on Monday to conserve energy during peak hours through Friday. The California ISO, which operates most of that state's grid, told consumers to prepare to conserve energy if needed.

Both grids have imposed rotating outages over the last year to avoid widespread collapses of their power systems - California in August 2020 and Texas in February 2021.

Rotating outages are supposed to leave a limited number of customers without service for a short time before switching to another group of customers. In Texas, ERCOT drew criticism after millions of homes and businesses were left in the dark - many for days.

For this week, ERCOT forecast power demand would peak at 70,816 megawatts (MW) on Tuesday, up from 69,943 MW on Monday, which was a record high for June. The grid's all-time high was 74,820 MW in August 2019. One MW typically powers about 200 homes on a hot summer day.

To meet that peak and have enough reserves in case something goes wrong, ERCOT has said it expects to have about 86,862 MW of supply available this summer. On Monday, however, the grid said an unusually large 11,000 MW of generation was out of service.

About 1,200 MW of power was regained overnight as some repairs were completed, it said on Tuesday.

In California, the ISO forecast power demand would reach 39,856 MW on Tuesday and 41,219 MW on Wednesday. That compares with the grid's all-time peak of 50,270 MW in July 2006.

To meet that peak and have enough reserves, the California ISO said it expects to have about 50,734 MW of supply available this summer.

Power and Gas Prices

State Price for Monday Price for Tuesday Price for Wednesday 2020 Average

Power MWh MWh MWh MWh

Ercot North Texas $84 $407 $25.52

Palo Verde Arizona $158 $120 $364 $40.71

SP-15 California $155 $120 $190 $40.18

Gas mmBtu mmBtu mmBtu

Waha Texas $3.15 $3.02 $1.18

SoCal City Gate California $4.45 $8.32 $3.02

PG&E California $4.09 $4.51 $3.01

Note - Power in Megawatt Hours (MWh) and gas in million British thermal units (mmBtu)

Note - The power and gas prices this week were the highest since the February freeze in Texas boosted

prices across the country.

(Reporting by Scott DiSavino, additional reporting by Sumita Layek; editing by Barbara Lewis, David Gregorio and Richard Pullin)

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