Texas Power Grid Implements Emergency Measures To Avoid Outages, Reasons Unclear

Texas declared a power emergency Wednesday evening and relied on emergency operations to avoid blackouts and outages. The Energy Reliability Council of Texas, responsible for managing the state's power grid, announced a "level 2 emergency" due to limited supply.

ERCOT called for all available power generation and drew on reserves in order to stay ahead of demand. Within a few hours, the supply had normalized, and the council was able to lift emergency conditions, according to Bloomberg.

Two years ago, an uncharacteristic winter storm led to enormous energy demand, driving energy prices high and causing blackouts in certain areas of Texas. This summer, high temperatures have also put a strain on the state’s power grid, with ERCOT asking Texans to conserve energy 10 times in the last few months, according to the Texas Tribune. 

Demand for energy in Texas peaks in the late afternoons, when people get home from work and school and turn on their thermostats. Texas gets about 20% of its power from renewable sources, like wind and solar, which can dwindle in the late afternoons, at the same time demand picks up on hot summer days.

Read Also: Electricity Costs Spike 800% In Texas With Extreme Weekend Temperatures

ERCOT has not specified the reasons behind the 'level two emergency' declaration on Wednesday.

“We knew wind was low and demand was high, but there was no reason to expect conditions to be worse than many other days this summer,” Katie Coleman, an attorney for the Texas Industrial Energy Consumers, told Bloomberg. “We are still trying to understand what happened.”

Playing The Heat: There are a number of stocks that could potentially benefit from high energy demand and temperatures. 

Generac Holdings Inc GNRC manufactures generators that people can use to power their homes in the case of outages. Typically, Generac’s stock does well anytime there is an ongoing widespread outage. 

In addition to Generac, there are a number of publicly traded companies that manufacture air conditioning equipment. Examples are Whirlpool Corp WHR, Carrier Global Corp CARR and others. 

Apart from Generac, several other publicly traded companies produce air conditioning equipment. This includes Whirlpool Corp WHR and Carrier Global Corp CARR, among others.

To see a full list of air conditioning stocks, click here. 

Read Also: 7 Air Conditioner Stocks For This Summer's Infernal Heat Wave

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