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Magic Valley EC News

Record Low Electricity Reserve Margin Expected This Summer

You can help combat peak demand with MVEC’s Rush Hour Rewards program

Every summer we advise you to be mindful of energy consumption as the temperatures rise, and I want you to know this is not because it makes a good seasonal talking point. Higher temperatures cause energy use to rise in the summer months all over the state. In a recent report, the Electricity Reliability Council of Texas (ERCOT) reported an expected reserve margin of just 8.4 percent this summer—a record low. That’s just over half of the reserve margin target of 13.75 percent.

Who is ERCOT?

Who is ERCOT, and why do they matter to our members’ electricity utilization? ERCOT manages the flow of electric power to more than 25 million consumers in the State of Texas by scheduling power on the statewide electricity grid. This grid connects more than 46,500 miles of transmission lines that make up about 90 percent of the state’s electric load. Once ERCOT issues an alert, additional resources reserved for use during shortage conditions are utilized.

What is a reserve margin?

The reserve margin is the extra power available to the grid on top of the electricity demand ERCOT predicts for the summer. It serves to absorb a sudden spike in demand or an unexpected loss of generation capacity. A record low reserve margin means there is a higher risk of rotating outages. If something breaks at a power plant, or electricity demand gets too high during a peak, there may not be enough electricity left to go around. If that situation comes to pass, ERCOT will issue an Energy Emergency Alert, allowing the agency to call upon all available power supplies, including electricity from other grids and demand response resources. Rotating outages are used as a last resort to keep the grid operational and prevent the risk of a statewide blackout.

Why is the reserve margin historically low?

Texas is growing. There are thousands of new residents and a number of large companies locating their operations in the Lone Star State. Plus, there has been significant development in the oil and gas industry, particularly in West Texas, recently. All that growth means the state is using more electricity, a problem that’s compounded by the fact that there isn’t much new baseload generation coming online to compensate for the growth.

In Texas, baseload power plants are typically fueled by coal and natural gas. These generation plants operate nearly 24 hours a day, seven days a week and provide consistent and steady power. In December, ERCOT reported that three planned gas-fired power projects, totaling 1,763 megawatts, have been canceled since May 2018, and other projects have been delayed. It’s also worth noting that three coal-fired power plants in Texas shut down in early 2018. Those plants produced 4,167 megawatts, enough to power nearly 2.1 million Texas homes.

That’s not to say, however, that there hasn’t been generation growth in Texas. Wind generation has increased significantly, and some utility-scale solar energy projects have been built in Texas over the past few years. Those types of energy sources are attractive to investors because they are heavily subsidized by renewable energy tax credits.

However, while those sources have their benefits, they don’t provide the baseload power that’s necessary to provide consistent, reliable electricity. The sun doesn’t always shine, and the wind doesn’t always blow. Because of its unpredictable nature, renewable energy is used as a supplement to baseload power supplies.

What can you do to prevent rotating outages?

Rest assured that rotating outages are a last resort and will only occur if absolutely necessary. However, if at any point over the summer ERCOT calls on utilities to drop load through rotating outages, Magic Valley Electric Cooperative must comply.

Rush Hour Rewards

To help combat peak demand in summer months, June—September, Magic Valley offers a demand response program known as the Rush Hour Rewards program. Members who sign up for this program play a significant role in the operation of the electric grid by helping us reduce and shift their usage during peak periods. If you are interested in learning more about this program, I invite you to visit

You can also help lower the risk of rotating outages by conserving energy during peak hours, usually from 3 to 7 p.m., each day this summer.

Here are just a few tips to help you save energy:

  • Turn your thermostat up 2–3 degrees during peak hours.
  • Only run major appliances, such as your dishwasher, oven, washer or dryer, early in the morning or late in the evening.
  • Keep windows and doors closed and use blinds and drapes to block your home from the sun’s heat.
  • Unplug nonessential electronics and appliances.

I want our membership to know that we will do everything possible to keep the lights on this summer. However, we ask that you keep yourself up to date in the event that ERCOT issues Energy Emergency Alerts. During these alerts, we ask that you do your part to reduce energy consumption during this critical time.