Aug 8 (Reuters) - Electric demand in Texas will reach record levels on Thursday as consumers crank up their air conditioners to escape a heat wave baking much of the state, according to projections by the state's power grid operator.
High temperatures in Houston, the biggest city in Texas, were expected to near 100 degrees Fahrenheit (38 Celsius) every day through Aug. 14, according to AccuWeather meteorologists. The normal high in Houston at this time of year is 96 degrees.
The U.S. National Weather Service (NWS) issued heat advisories for Thursday in much of Texas, Oklahoma, Arkansas, Louisiana and Mississippi. In Houston, the NWS said the combination of heat and humidity would make it feel more like 105 to 110 degrees F.
The Electric Reliability Council of Texas (ERCOT), grid operator for much of the state, forecast that heat would push peak demand to more than 73,800 megawatts (MW) on Aug. 8 and 74,900 MW on Aug. 12, which would top the current all-time high of 73,473 MW set on July 19, 2018.
One megawatt can power about 1,000 U.S. homes on average, but much less during the peak summer cooling and winter heating seasons.
Despite the record demand forecast, next-day power prices at the ERCOT North hub EL-PK-ERTN-SNL dropped to $57 per megawatt hour for Thursday from a one-year high of $209.25 for Wednesday.
ERCOT has said it expects to have about 78,154 MW of generating capacity to meet demand this summer, but warned there was an increased chance that low reserves would force it to issue more alerts urging customers to conserve energy than last year.
ERCOT has said its planning reserve margin for this summer was a historically low 7.4% because several generators have been retired even though demand is rising.
The reserve margin is the difference between total generation available and forecast peak demand, with the difference expressed as a percentage of peak demand.
Generators are being retired because power prices have been declining for years as growing supplies of cheap natural gas from shale formations, like the Permian in West Texas, flood the market. Gas has produced about half the state's electricity for years.
Lower power prices make it difficult for some generators, like those operating old coal-fired plants, to make money selling electricity.
Ercot North prices have fallen to an average of $33.87/MWh over the past five years (2014-2018) from $41.37 during 2009-2013 and $59.19 during 2004-2008.
Reporting by Scott DiSavino Editing by Bill Trott