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There is a “high likelihood” the state’s power grid will be operating under emergency conditions Thursday, Electric Reliability Council of Texas CEO Pablo Vegas told the Public Utilities Commission at its morning meeting. It would be the first time since Winter Storm Uri in February 2021 that the grid entered emergency conditions.

Electricity demand is forecast to exceed committed supply Thursday from 7 p.m. to 9:30 p.m., according to preliminary data from the grid operator late Thursday morning. The gap between supply and demand will be “more tight than any other day” this summer, Vegas told commissioners.

The expected tight conditions come due to very high heat, very high demand and the low expected output of wind power in the late afternoon as solar resources ramp down with sunset, Vegas said.

Natural gas and coal plants, which can underperform or fail in high heat, are seeing “at or near normal forced outage levels,” Vegas said. Grid data showed approximately 6,800 megawatts of natural gas and coal outages as of 11:30 a.m. Going into the summer, ERCOT predicted that natural gas and coal plants would see “typical” outages of 5,034 megawatts.

Shortly before noon, ERCOT issued a conservation request for 3 p.m. to 10 p.m. — the fourth such request of the summer — a non-emergency notice to the public that asks all Texans to conserve energy use. The state’s grid operator manages 90 percent of the Texas electricity grid and acts as both traffic control for the flow of electricity across the state and as the trading floor for the wholesale electricity market.

To conserve power, the grid operator suggested residents set their thermostats a degree or two higher, avoid using large appliances such as washers or dryers, turn off and unplug non-essential lights and appliances and turn off pool pumps. Businesses can turn off lights and equipment in spaces that are not in use and turn off air-conditioning outside of business hours. ERCOT also requested that all government agencies implement all programs to reduce energy use at their facilities.

Reliant, a retail electricity provider that sells electricity to consumers, asked its customers to conserve Thursday through Monday from 2 p.m. to 9 p.m. in an email to customers Wednesday night. Reliant cited the extreme heat Texas is currently experiencing, which prompts consumers to blast the air-conditioning to stay cool, thus driving up energy demand. CenterPoint, Houston’s natural gas provider and transmission and distribution company, also sent an email to its customers Thursday boosting ERCOT’s conservation request.

If the grid operator decides to initiate emergency operations, it would deploy a series of tools to try to reduce demand and call upon other available sources of supply.

ERCOT has three levels of emergency operations, based on how many megawatts are left in operating reserves, the grid’s backup stores of electricity. One megawatt of electricity can power about 200 Texas homes during periods of peak demand, according to ERCOT.

The first level is initiated when operating reserves drop below 2,300 megawatts and are not expected to recover within 30 minutes. Under level one, the grid operator would bring online all available electricity generation, release any unused reserves and import up to 1,220 megawatts of electricity from neighboring electric grids. ERCOT has far fewer connections to neighboring grids than other U.S. power grids.

Level two is initiated when operating reserves drop below 1,750 megawatts and are not expected to recover within 30 minutes. Under level two, the grid operator would continue to pay large industrial customers to reduce power use and try to reduce electricity use from transmission companies.

Level three, the highest level of emergency, is initiated when operating reserves drop below 1,430 megawatts. If reserves drop even further to below 1,000 megawatts and are not expected to recover within 30 minutes, as a last resort, ERCOT will order rolling outages. ERCOT projections around noon Thursday show demand exceeding supply in the early evening.

Rolling outages are supposed to be outages staggered among different areas to reduce demand and prevent further, potentially weeks-long damage to the power grid. The grid operator has not reached any level of emergency since February 2021, when what were supposed to be rotating outages cascaded into outages that lasted for days in the infamous Texas winter freeze.

So far this summer, ERCOT has asked for conservation four times – most recently twice last week – but has not yet initiated emergency operations.

ERCOT has called for statewide rotating outages four times: in 1989, 2006, 2011 and 2021, according to a 2020 ERCOT memo on its use of emergency alerts. If the grid operator orders rotating outages, utilities are required to initiate outages based on the percentage they’ve contributed to historic peak demand, according to the memo.

Rotating outages would primarily affect residential neighborhoods and small businesses and are supposed to be limited to 10 to 45 minutes before they’re “rotated” to another location, thus the name. Each transmission company — in Houston, that company is CenterPoint — is responsible for determining which areas they will black out to meet the amount of demand they’re required to reduce.

Texas has seen an unprecedented summer for the power grid, with Texans setting 10 preliminary records for electricity demand since the end of June amid a persistent heat wave and sustained population growth.

The current record stands at 85,435 megawatts set two weeks ago, shattering the record of 80,038 megawatts going into the summer set in 2022. As of 11:30 a.m., Thursday’s demand is expected to peak at 84,928 megawatts at 5 p.m.

The wholesale price of electricity was forecast Thursday afternoon to skyrocket to nearly $4,000 per megawatt hour at 8 p.m., when supply of electricity was projected to be the least available compared to demand, according to preliminary ERCOT data. Earlier in the day, when electricity was more plentiful, prices ranged between $30 to $70 per megawatt hour.

In Texas’s deregulated energy market, retail energy providers — the utility companies that send consumers their electricity bills — purchase power from energy generators on the wholesale marketplace to resell to consumers. When the wholesale price of electricity surges, retail providers may eventually pass down the increased cost to consumers in the form of higher energy bills.