Texas Governor Rick Perry is due to announce his run for the presidency tomorrow in South Carolina. As he enjoys his travels to and fro abroad a nice, cool airplane, the people of his state are clamoring in need of cooling. For the second year in a row, Ercot, the organization managing Texas’ electrical grid, has underestimated the level of electricity demand in its summer forecast. Ercot’s summer forecasts are based on an average of figures from the 10 previous summers. Problem is the past two years have been unusually hot. Subsequently, electricity demand this past July was 12% higher than any prior July. But because Ercot is drawing an average, this spike gets muddled by the inclusion of the other previous averages. The result is a surge in demand and a lack of means to meet that demand. It seems their modeling is in need of some updating.
Rebecca Smith of the Wall Street Journal reports the details in a read worth your time.
Bottom line: Like so many areas of our system, deregulation of markets can only last so long before someone needs to step in. We’ve seen this on a larger scale with our financial markets. Now, we’re seeing it on a smaller scale in our electricity markets.
Governor Perry needs to recognize that his cowboy ways will not stop the heat beast rolling his way…