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The Texas electricity market proved once again why it's a leading innovator, and power customers around the world should pay attention.
Six months ago, critics predicted that Texans would suffer soaring electricity prices and rolling blackouts in what they predicted would be cruel summer. Generators had shut down expensive coal-fired power plants, raising questions about whether supply could meet demand.
The Summer of 2018 was indeed one of the hottest on record. ERCOT, which meets 90 percent of the state's electricity needs, set a new record for demand at 73.2 gigawatts. But the lights stayed on, and prices remained reasonable.
Texas's lightly-regulated market, heavily reliant on renewable energy, worked as planned. The sky did not fall.
In July, a string of hotter than average days set 14 of the top 15 hourly demand records in ERCOT's history. Prices exceeded $300 a megawatt-hour during some 15-minute intervals, but average prices settled well below what traders had anticipated. Electricity bills were typical for a Texas summer.
Wholesale electricity in Texasaveraged $28.25 a megawatt hour in 2017, among the lowest in the nation, but can legally go as high as $9,000. Power plant efficiency and additional wind energy is credited for keeping the rates low.