ERCOT Prices Remain Steady Despite Record Load

Facing eye-opening load projections due to the ongoing AI race and data center boom, U.S. independent system operators (ISOs) and policymakers are scrambling to adopt strategies to meet the moment. Some demand growth has already arrived, however, and we are beginning to see its impact on U.S. electricity markets. Texas, one of the leading areas for data center development in the U.S., recently experienced prolonged high temperatures and record-setting load, a near-identical scenario experienced by PJM last month. However, a combination of factors, including actions taken by the Electric Reliability Council of Texas (ERCOT), could be responsible for why electricity prices remained relatively stable throughout the heat wave in Texas.

A Diverse Mix of Large Loads Coming Online

So far in 2026, several measurable increases in ERCOT’s load distribution factors data have appeared, and they are not all data centers. Other large-load additions that have contributed to the recent demand growth in ERCOT include Stage III of the Corpus Christi LNG facility and the expansion of Steel Dynamics’s Sinton Mill. However, multiple large data centers have also started drawing power from the grid. Two substations adjacent to the OpenAI Stargate data center campus in Abilene, Texas, have seen a combined increase of about 400 MW in their highest hourly loads this year compared to the maximums they experienced in 2025. This represents the largest new load in Texas so far this year, which should increase in the future, as this increase represents one-third of the campus’s planned 1.2 GW installation as of June 12^th. Despite the Texas governor’s recent moratorium on data center approvals, demand should continue to increase from both already approved data centers and other facilities with high power demand.

High Temperatures Push Load to New Records

ERCOT’s recent load growth has already spurred new daily peak demand records. A heat wave in mid-July pushed ERCOT to break its previous record of 85,559 GW from August 20^th, 2024, before reaching its highest-ever peak of 91,090 GW on July 22^nd. Sustained heat this month then resulted in ERCOT’s daily peak loads reaching above the previous 2024 record 26 times in a 34-day span, including every day from August 11^th through August 23^rd. This sustained level of high demand would pose a challenge for any grid operator, and as load grows and summers get hotter, grids will likely have to face similar events more frequently.

How ERCOT Kept Prices Stable

Despite the record load, ERCOT managed to make it through this recent stretch with relatively stable prices overall and few jumps in its day-ahead market (DAM). Hourly average DAM prices in ERCOT between July 21^st and August 23^rd were only 15% higher than the rest of the summer. In contrast, PJM’s average hourly DAM prices were 90% higher during the period of near-record demand between June 25^th and July 19^th, when the ISO saw tremendous variability and prices skyrocketed to over $1,000 per megawatt-hour on two separate days. These prices signify the potential for higher risks of load-shedding and blackouts for its constituents.

ERCOT’s “Connect and Manage” approach to interconnection may have given the ISO a leg up when it comes to handling data center-driven demand growth by making it easier to construct large quantities of batteries and solar generation. Since the start of 2022, ERCOT has added 60 GW of power capacity, compared to only 22 GW in PJM, despite the latter seeing almost twice the peak load of the former. However, as data centers connect in droves over the coming years and push electricity prices higher, one may question if, and when, greater pricing volatility will come for ERCOT. 

Conclusion

Even though Texas is not seeing the worst impacts of the high-temperature/high-load combo on its power prices, state policymakers are still exploring ways to better manage its massive large-load interconnection queue. Should power capacity be unable to keep up with load growth, actions may be needed to avoid potential disaster, such as load shedding or even blackouts, during moments of high power demand. Only time will tell how many data centers are built or how governments and grid operators will handle these large-load additions to the system. In the meantime, make sure to check back in for more Energy Market Insights as we continue to cover these rapidly shifting electricity markets.

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