What happens when bad weather strikes the power grid? Depending on the storm, and the region, some customers may lose power if distribution lines are damaged. More serious cases, like when key generators are tripped offline, may lead to more serious consequences.
Groundhog Day 2011 in Texas provides an example of the more serious consequences: power prices rising to 40 times their previous level, coupled with rolling blackouts. The Electric Reliability Council of Texas, or ERCOT, operates the electric grid and manages the deregulated market for 75 percent of the state: about 22 million customers in areas including Houston, Dallas, Fort Worth, San Antonio, Austin, Corpus Christi, Abilene and the Rio Grande Valley.
Thanks to the weather, apparently there just isn't enough power to go around. Reports indicate that ERCOT has imposed rolling blackouts after multiple power plants were disabled by a major ice storm. Rolling blackouts are an extraordinary measure, seen more often in other countries than in the U.S. When the utility cuts your power, unless you're connected to distributed generation or storage, your lights will go dark.
Beyond the rolling blackouts, the price of energy may lead to other consumer impacts. Reuters reports that hourly energy prices in ERCOT rose from $50 per megawatt-hour to $2,000 per megawatt-hour, a forty-fold increase. (Although individual residential ratepayers may not feel that price spike directly, it would translate into paying $2.00 per kilowatt-hour if they did - and large commercial and industrial ratepayers who buy power at wholesale in the market are exposed to these prices directly.) Sounds like a good time for demand response!