August is where ERCOT’s summer 2026 risk concentrates. The base case already prices in a hot month, and the bullish scenario is the one that keeps desks up at night. If you carry ERCOT length or short into late summer, this is the window that decides your book.
The heat gets baked in
The defining feature of August is the “baked-in” nature of the heat. Low soil moisture across Texas makes triple-digit highs easier to hit and harder to break, and the high-pressure ridge anchors most firmly this month. That combination sets a high floor for daily demand.
Both analog years, 2018 and 2023, show system-weighted average highs in the mid-to-upper 90s. The 2023 analog goes further, with overnight lows approaching 80°F. Warm nights are the real problem. When overnight lows sit near 80°F, demand never fully recovers, which is why the 2023 analog makes August the most dangerous month for sustained demand.
Relief is possible but not guaranteed. In the latter half of the month, MJO transitions and weak backdoor fronts from the northeast can test the ridge’s resilience. Without those disruptions, the bullish risk stays dominant through the month.
Why the tail is so fat
Here’s the number that matters. Under the 2023 analog, 80 GW peaks are not hyperbole, and North Hub will need imports from other areas on the hottest days. Our analysts describe the bullish August scenario as “off the chart.”
Adam Jordan, Director of Power Analytics, put the 2023 experience plainly:
“August 2023 was the first time ERCOT had ever seen an 80-gigawatt peak, and they saw it 17 times that month. That sustained heat, where everything looks like a 4CP, that’s the scary stuff.”
That pattern feeds a specific structural risk. ERCOT is discussing a move from 4 CP to 12 CP for coincident peak planning. If load stays even across many days, as it did in August 2023, CP exhaustion becomes real: companies end up on call for every peak day of the month.
The one thing holding prices down
The supply stack has changed since August 2023. Solar and battery additions make it cheaper to serve any given level of net load than it was two years ago, which puts a ceiling on prices in non-extreme conditions. The open question for August 2026 is whether the heat analog overwhelms that cheaper backstop. On the extreme days, it can.
Read the full ERCOT price, heat rate, and congestion outlook in our Summer 2026 Power Market Outlook.
