ERCOT Tracker: Loads boost power prices on month, but LMPs down on year

Houston — Weaker natural gas prices offset heavier peakloads to push day-ahead on-peak locational marginal prices lower in Electric Reliability Council of Texas markets this July, compared with July 2019, but prices were higher month on month, mainly because of the big month-to-month power demand surge.

September on-peak forwards were lower month on month, possibly reflecting July's relatively mild daily pricing, but higher year-on-year, probably due to expected warmer-than-normal weather forecasts.

ERCOT Houston Hub had the highest average day-ahead on-peak LMP this July, at $29.35/MWh, up about 22.8% from June but down about 20.3% from July 2019, according to the S&P Global Platts price database.

ERCOT South Hub had the lowest average day-ahead on-peak LMP, around $25.75/MWh, up about 15% from June but down 29.2% from July 2019.

At the Houston Ship Channel, gas prices averaged $1.698/MMBtu in July, down almost 26% from June's $2.294/MMBtu and down 24.2% from July 2019's $2.241/MMBtu.

At the Waha gas pricing point the average price in July was $1.303/MMBtu, down 4.3% from June's average of $1.362/MMBtu but up about 165% from July 2019's extraordinarily low average of 49.2 cents/MMBtu.

Peakloads averaged about 67.1 GW in July, up about 10.6% from June's 60.6 GW and up 2.15% from July 2019's 65.6 GW.

Weather appears to have played a big role in the peakload increase, as population-weighted cooling-degree days in July were up about 26.7% from June and up 11.9% from July 2019's CDDs, CustomWeather data shows.

This July's population-weighted average daily high temperature was 94.3 degrees Fahrenheit, up from June's 90.8 degrees F and July 2019's 92.5 degrees F.

Forward markets

Looking toward September, ERCOT North Hub on-peak averaged about $41.25/MWh in July, down from its $43.30/MWh June average but up from the $36.25/MWh that September 2019 on-peak forwards averaged in July 2019.

At the Houston Ship Channel, September forwards were down on the month and year. The September on-peak average was $1.800/MMBtu in July, down from $1.826/MMBtu in June and down from the $2.196/MMBtu that September 2019 forwards averaged in July 2019.

At the Waha gas pricing point, September on-peak averaged $1.408/MMBtu, up from June's $1.362/MMBtu and from the $1.168/MMBtu that September 2019 forwards averaged in July 2019.

The National Weather Service on July 16 forecast all of Texas to have a 50% to 60% chance of above-normal temperatures for the August, September and October timeframe.

Generation mix

With gas prices remaining so low, gas-fired generation had no problem expanding its leading share to more than 53% of ERCOT's generation mix, up from 46% in June and 53.2% in July 2019.

Coal's share was also up, at 16.9% in July from 16.6% in June, but down from 19.8% in July 2019.

Wind's share, at 17.1% was down from June's 23.3% but up from July 2019's 15.7%.

Solar power's share was down on the month at 2.8% from 2.9% in June, but this July's output, 1.1 TWh, was slightly more than June's 1 TWh. In July 2019, solar's share was 1.3%, and its output was 511 MWh.