This story has been updated.
With several more days of triple-digit heat expected this week, and projections showing Texas will see its hottest summer on record, CPS Energy officials assured the utility’s board members late last month that it’s done all it can to prepare for new peaks in energy demand.
They also acknowledged, however, that overall grid reliability issues still exist that they cannot control.
But with local supply projected to be higher than local demand, CPS Energy officials said the utility is in good shape even with these early scorching temperatures.
CPS Energy has a 15% reserve margin for this summer, which is above its planning target of 13.75%, said Kevin Pollo, CPS Energy’s vice president of energy supply and market operations. Expected peak demand is projected to reach 5,524 megawatts, while the utility expects to generate up to 6,358 megawatts.
On June 6, demand for power broke the utility’s “peak hour” demand record, hitting 5,216 MW from 6 p.m to 7 p.m. Officials said they expect it may come close to being broken again Tuesday.
But the utility’s 15% reserve margin — calculated by subtracting demand from generation capacity — should be a sufficient cushion to meet San Antonio’s needs, Pollo said, “and we are projecting essentially a record-breaking summer.”
While several CPS Energy units were down for maintenance, as of June 7 the utility was down just 103 megawatts, according to a spokeswoman — and San Antonio will have enough power to get through several 100-degree days next week, even without those units online, he added.
ERCOT has also improved its reserve margin over the last year, Pollo said, largely due to more renewable resources coming online across Texas — a trend that is expected to continue in upcoming years
The state grid operator has said it will have sufficient generation to meet Texans’ summer needs, but Pollo noted that there are a couple of scenarios where extreme peak load, combined with higher than normal power plant outages and low renewable output “could put us into an energy emergency alert.”
While Texas has never had to implement rolling blackouts at the scale of what was seen during Winter Storm Uri in February 2021, the state now has the capability to better manage statewide demand, CPS Energy’s interim CEO and President Rudy Garza assured trustees.
Garza added that ERCOT and Texas utilities have also been working to better understand the implications of certain weather patterns.
CPS Energy is not relying on ERCOT, however. The utility is actually finalizing the hiring of its first meteorologist on its staff, Garza told trustees.
Despite Garza’s assurances, Mayor Ron Nirenberg criticized the confidence in ERCOT and its projections. As CPS Energy works to change the composition of its generation portfolio in coming months by adding more renewables, the utility should definitely keep the reliability of those sources in mind, he said.
“If … we’re still the backbone of ERCOT’s emergency service, then it’s our customers who are subsidizing that lack of comprehensive understanding of the energy grid in Texas,” Nirenberg said. “Therefore, to me, our greatest risk beyond some of the obvious is the fact that we still remain tethered to ERCOT.”
Garza acknowledged that changes still need to be made at the legislative level to better protect the grid and its reliability, but he said the best CPS Energy can do for its own customers is to continue to add reserve margin — despite the fact that doing so could mask what Nirenberg called “bad behavior” by ERCOT.
Because leaving the ERCOT market isn’t a reality for CPS Energy, the utility must continue to push for reliable electricity where it can, Garza said.
Having such a robust reserve margin puts San Antonio in a “good market position,” to sell power and earn money Garza said, rather than having to buy electricity from the market, as it did during Uri, which will cost customers tens of millions of dollars over the next 25 years.
