coronavirus and electricity grid

Impact of Coronavirus on Texas Electricity Grid

In times of uncertainty, it’s natural for people to be concerned about those things that they can’t control. At ElectricityPlans.com we are working to get answers to some of the most common questions you may have about electricity reliability.

Will my power be disconnected if I can’t pay my bill?

What are electricity prices like right now?

Will the lights stay on during the COVID-19 Pandemic?

Yes. There is nothing to indicate that there will be electrical outages.

In fact, Grid operators, or Independent Service Organizations (ISO) all have business continuity plans in plans in place to deal with emergency situations, including pandemics. Examples of ISOs include including ERCOT (Electricity Reliability Council of Texas), PJM Interconnection, Midwest ISO, New York ISO and New England ISO.

The same goes for investor-owned utilities, generation companies and retail energy providers. In fact, all public utilities have emergency contingency plans in place.

Stakeholders review and update these plans on a regular basis. The plans include communications plans, back-ups, work-from-home, and emergency operations. Mock emergency drills are held in advance to identify issues that must be addressed.

ElectricityPlans.com is based in Texas. We reached out to ERCOT (Electricity Reliability Council of Texas) to find about their Coronavirus precautions and grid readiness.

According to Leslie Sopko, ERCOT Communications Manager:

“ERCOT provides a critical service to Texans, and we are taking an abundance of caution to ensure the health and safety of our staff during this time. We are taking extra measures for grid operators, including alternating facilities and implementing other procedures that encourage social distancing.”

Sopko continued:

“ERCOT is identifying staff and vendors who are needed on-site to maintain critical functions. As an example, grid operators must work on-site. We implemented a voluntary work from home policy for employees and contractors who do not need to be on-site to perform their job responsibilities.”

ERCOT issued their Pandemic Preparedness documentation in January, and an update on March 12.

So rest assured, while the Coronavirus Panedemic is a new type of emergency, being prepared to deal with an emergency situation is not.

Want to create a business continuity plan for your business? Here are tips on what to include in your plan.

Will my power be disconnected if I can’t pay my electric bill due to the Coronavirus?

Effective March 30, 2020, the Public Utility Commission of Texas has introduced a new fund to help consumers who need help paying their electricity bill.

The Texas COVID-19 Electricity Relief Program (CERP) helps consumers who are having trouble paying bills due to job loss or other COVID-19 related hardship.

There are two aspects to he CERP program:

  • Retail Electric Providers (REPs) must offer a deferred payment plan to any residential customer who requests one, regardless of their previous payment history.
  • REPs must suspend electricity disconnections for residential customers who have been added to the state’s unemployment and low income list due to the effects of COVID-19.

You can read more about the Texas COVID-19 Electricity Relief Program (CERP) and how to apply in our complete FAQs article.

How will electricity usage and rates be impacted by Coronavirus?

Grid operators and generation companies are already seeing changes in power usage as America prepares to work remotely.

Commercial electricity usage will drop as schools, restaurants, movie theaters, offices, day care centers and other non-essential services close during the Coronavirus Pandemic. Industrial demand is not expected to be impacted. Office workers will be working from home.

That means that electricity usage will shift from the predictable pattern that supply desks and schedulers are used to.

The shift in work patterns makes it difficult for grid operators to predict demand for every hour of the day, according to Cody Moore, head of gas and power trading at Houston-based Mercuria Energy America, in an article published in Bloomberg.

“We have grid operators that are trying to forecast scenarios that they’ve never seen before,” Moore said. “The only thing we can conclude for sure is it probably increases volatility.” (Source: Bloomberg)

Consumers that have a fixed rate energy contract will not be impacted by this rate volatility and risk.

But it’s a cost that energy companies will need to price into their future offerings.

How will the Coronavirus impact electricity prices for my home/business?

Energy contracts are sold to the public on the basic of forward market prices. The forward markets are based on projections of supply and demand. (See more in our article, Texas Electricity Trends for 2020.)

As of now, there has been little change in pricing for the 12-month forward market price for electricity in the ERCOT market. But that may change.

However, there are a number of factors that come into play, according to sources at Megawatt Daily, a publication of Platts S&P Global.

These factors include:

  • Demand: In addition to the Coronavirus Pandemic, Industrial energy customers are watching the oil price wars between Russia and Saudi Arabia. A slowdown in the economy could lessen demand for electricity.
  • Supply: Lower demand could mean ample supply, which would indicate lower long term prices.
  • Weather: With Americans working from home, electricity usage patterns will look more like a residential load. Since approximately 50% of residential usage is tied to heating and cooling, demand will be closely tied to weather.

And as stated in our previous section, the change in usage patterns brings volatility in the energy trading markets. Volatility brings risk. Risk brings higher costs.

At this time, long term contracts continue to be less expensive than short-term contracts in ERCOT, based on planned generation assets and demand.

If you are in the market for residential electricity right now, you can take a wait and see approach and watch 12 month rates. However, we recommend locking in a fixed rate energy plan for your home or business, with a 24 to 36 month contract term.

Commercial rates may be another story. Retailers may offer lower prices on commercial contracts because they know demand will be down for their existing customers. Check all of the options available to you and lock in the best rate you can find.

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What can I do to control my energy bill if I have to spend more time at home?

Energy data analytics expert Innowatts projects that your bill will increase by 8% or more while you work at home during the Coronavirus.

Here are some simple ways you can conserve:

  • Set your HVAC system to a moderate temperature of 75-78*.
  • Use ceiling fans to keep cool.
  • Open your blinds to make use of the natural light.
  • Unplug appliances and chargers when not in use.

With the kids home from school, take some time to talk about energy conservation. Our article, “6 Tips for Raising Energy-Smart Kids” or “13 Fun Earth Day Activities for Kids” will help you get started.

You can find more ways to save on your electricity bill on our blog.

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