ERCOT recently published a 12% chance that power reserves could drop below 1,500 megawatts this summer. This means power consumers could face rolling blackouts to prevent a statewide grid failure. Two things are certain in Texas – world class queso and unrelenting summer heat. Businesses should be cautious about ERCOT's projections, which assume that all energy sources will work as expected when we get into the peak of summer.  

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Texas summers are characterized by high temperatures and low renewable output, exacerbating the likelihood of power supply shortfalls should these factors overwhelm cooling systems at operational facilities.  

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Since ERCOT doesn’t operate or maintain power plants, their assumptions are akin to assuming your old car’s air conditioning will work as well in July and August as it did in March.  

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Population growth, widespread industry electrification, electric vehicle adoption, and data center development are fueling unprecedented power demand growth in Texas. Load requirements are further amplified by Texas’ hot summer climate. In May alone, the Texas grid notched five monthly power demand records, indicating what’s possible during this summer’s peak cooling season.  

Recently, an energy client experienced significantly higher power usage than projected, causing issues with their fixed-price agreement. The power provider threatened to terminate the contract, creating an urgency for the company to restructure its agreements.

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Mobius expeditiously stepped in to optimize the client’s power procurement, resulting in immediate cost savings of $200,000, a nine-month contract ensuring power supply at reduced costs, and a plan to integrate and organize expiring agreements into one comprehensive strategy.

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"Extreme weather and rising demand have made the energy landscape more uncertain than ever. This client case exemplifies the broader market need to analyze and optimize power procurement agreements to enhance reliability, resiliency, and cost savings."

Casey Ragsdale, President of Mobius Risk Group.

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Extreme weather and surging power demand have pushed aging infrastructure to its limits. With increasing grid uncertainty, it is crucial for businesses to analyze and optimize power contracts around their specific mandate. Being savvy about market trends, peak demand periods, energy source availability, and regulatory changes can give businesses added optionality.  

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Flexible contract terms are key, allowing for price adjustments and load flexibility. Demand response options can help businesses save money by reducing or shifting their energy use during peak times. It’s also important to have clauses for penalties if energy providers don’t deliver. Aggregating, where multiple companies join forces to negotiate better rates, can also lead to more favorable conditions and cost savings.  

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ERCOT’s stability and Texas’s electric grid depend on proactive measures to handle uncertainties. For businesses, analyzing and optimizing power contracts is crucial for securing reliable prices and supply amidst increasing grid uncertainties. By understanding markets, negotiating flexible and risk-mitigated contract terms, and leveraging aggregation, businesses can better navigate the power market’s complexities.

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