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Texas Power Grid Expected to See High Demand During Severe Cold This Week
February 01, 2022

The Electric Reliability Council of Texas (ERCOT) said today that it expects the state's electric grid will be reliable and there will be enough power supply to meet demand ahead of extreme cold weather later this week. The extreme cold weather comes nearly a year after Winter Storm Uri in February 2021 shut down refining, petrochemical/resin production, and logistics.

Winter Storm Landon is forecast to bring snow, sleet, and freezing rain from the Rockies to the Plains, Midwest and parts of the Northeast through Friday. Severe cold weather, snow, and ice are also expected throughout Texas starting on Wednesday and lasting through the end of the week. ERCOT already issued a watch for an extreme cold weather event with possible icing conditions.

Texas Governor Greg Abbott said the state is working around the clock to respond robustly to the winter storm that is expected, as the power grid is expected to see its highest demand by Friday.

"ERCOT will have an excess 15,000 megawatts of power available, even at the time of highest demand," Abbott said. "ERCOT is well prepared for conditions as they currently stand but remains flexible in order to respond to power and demand needs."

The Texas power grid has come into question since a Winter Storm Uri. The impact from the winter storm led many Polyethylene and Polypropylene producers to declare force majeures and initiate allocation programs for much of 2021, while prices shot up to record highs. Although commodity-grade resin prices have since eroded from record highs during Q3 and Q4 of 2021, current Polyethylene levels are some $.06-.14/lb above where they were a year earlier, according to The Plastic Exchange.

The Public Utility Commission of Texas (PUC) completed a multi-month inspection process of power generators in December and said over 99% have winterized their facilities. The state has also identified critical natural gas infrastructure to ensure these facilities maintain power and operations during the winter weather. The PUC will continue to monitor grid conditions across the state. Additionally, ERCOT will monitor weather conditions and will update electricity demand forecasts as the weather event progresses.

The Railroad Commission of Texas has conducted operational calls with local gas distribution companies, major gas producers, and pipeline operators throughout the state. They have also inspected 100% of intrastate underground natural gas storage facilities.

By Brian Balboa for The Plastics Exchange.

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