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NRG CEO predicts ERCOT margins to shrink further

The grid operator for most of Texas has acknowledged that reserve margins are falling, but according to Gutierrez, the decline is more precipitous than thought.

“We’re seeing continued pressure for retirements, given the low prices experienced in Texas over the past several years,” Gutierrez said during the company’s second quarter earnings call. “On the supply side, we continue to see delays in new builds with actual megawatts brought online coming in well below expectations.”

But the fundamentals in this market are strong,” Guiterrez said, referring to demand. Weather-normalized demand growth in the region hit 2.3% over the last year, he said, “which is well above the flat to negative growth of every other competitive market in the country.”

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