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Texas' electric reserves for next summer a bit low

FORT WORTH, Texas (AP) -- The future of the state's electricity supply is improving, but Texas still could struggle during next summer's peak demand, the agency that oversees most of the state's independent electric grid said Monday.

The peak demand for electricity is expected to grow less quickly than previously thought, ERCOT chief executive Trip Doggett said in a statement Monday. Several new plants also are expected to start providing electricity in 2014, 2015 and 2016, according to a new long-term outlook released by the Electric Reliability Council of Texas, or ERCOT.

But projected reserves for summer 2013 have decreased slightly, according to the report.

ERCOT is responsible for managing most of the state's electric grid, while private companies generate the electricity. Texas is the only state with an independent power grid.

ERCOT tries to maintain a 13.75 percent reserve margin in case demand spikes or a generator shuts down unexpectedly. But generation capacity has not kept up with growth — Texas' population is expected to nearly double in the coming decades — or with the demand during the hot Texas summers, cutting into ERCOT's reserves.

The agency said Monday it will have a reserve margin of 13.2 percent next summer, and by 2014, those reserves will drop to 10.9 percent, still below target but more than had been forecast.

But if three power-producing projects that are being constructed come online as scheduled in the third quarter of 2014, ERCOT's reserves could be 13.6 percent in time for the peak demand, usually in August, the agency said.

Warren Lasher, ERCOT's director of system planning, said Monday that the long-term outlook will change over time as construction projects move forward.

In October, the Texas Public Utility Commission voted to double the cap on wholesale electricity prices over the next three years, saying that a price hike was necessary to encourage more power plant construction and prevent outages in areas served by ERCOT.

Industry experts say companies that operate the state's power plants are losing revenue because prices are too low for most of the year and only make money during the hottest summer and coldest winter months.

Texas customers only pay for electricity that reaches the grid, not for companies' banked capacity.