3 min read

Update: Hurricane Hanna Causes Spike in Hub-to-Load-Zone Costs in the Valley

August 13, 2020

Market - ERCOT


Last week, we reported that there was significant damage to one of AEP’s 138 kV transmission lines in the wake of Hurricane Hanna. The damage to this transmission line significantly increased nodal congestion charges across ERCOT’s South Load Zone. This week, AEP repaired this transmission line. The blue colors in Figure 1 below show that nodal congestion costs in the Valley have significantly decreased since last week. This is good news, especially given the extreme demands placed on the grid from triple digit temperatures this week.

hurricane hanna updateFigure 1: LMP Contour Map: Real-Time Market, from ercot.com


Hurricane Hanna made landfall on Saturday, July 25th, the first hurricane to hit Texas since Harvey in 2017. It came ashore as a Category 1 hurricane, between Corpus Christi and South Padre Island, bringing maximum sustained winds of 90 mph and large amounts of rain across the Rio Grande Valley.

Hurricane HannahFigure 1: Hurricane Hanna Track July 22-27, 2020, from weather.com

As the storm crossed South Texas, it damaged one of AEP’s 138 kV transmission lines in its path. On Monday afternoon, as electricity loads began to recover, other transmission lines in the area that were trying to handle the additional load of the damaged line became overloaded.

These overloaded transmission lines significantly increased the amount of congestion on this portion of the electricity grid. Higher congestion costs produced much higher than normal Nodal Congestion charges in ERCOT’s South Load Zone, as seen in the graphic below by the orange and red colors across the Valley. These congestion costs are intensifying each afternoon, as local electricity loads on the system start to peak. On Monday, Aug. 3rd, these congestion costs got as high at $0.70 per kWh between 3:00 and 4:00 PM, and remained above $0.10 per kWh until approximately 7:00 PM.

locational marginal pricingFigure 2: LMP Contour Map: Real-Time Market, from ercot.com

AEP anticipates having the two-mile stretch of transmission line near Edinburg repaired by the middle of August. But in the meantime, AEP is urging all customers in South Texas to limit electricity use during the peak hours of the afternoon.

Reach out to your energy advisor or contact us for more details. 

Topics: Markets ERCOT

Written by 5

Founded in 2011, 5 comprises a team of energy innovators, commodity traders, analysts, engineers, and former energy supplier executives. Together, they serve a broad array of private and public sector clients throughout the United States and Mexico, providing strategic advice on energy-related matters including procurement, demand-side management, rate optimization, regulatory intervention, benchmarking, bill auditing, RFP management, sustainability planning services, renewable power, and distributed generation. With an eye on growth, 5 has initiated a number of strategic partnerships and acquisitions, including the 2019 acquisition of Luthin Associates. 5 has been named to the Inc. 5000 list of fastest-growing companies in the U.S. for five consecutive years. The firm has also received numerous accolades and national awards for its corporate culture, leadership and innovation, including 5 consecutive years as a top 10 Best Company to Work for in Texas according to Texas Monthly Magazine.