ERCOT market monitor's 2025 report: prices up 13.8% as gas costs jumped 61%
Potomac Economics told ERCOT's TAC that the implied heat rate fell 28% and average PRC topped 11,000 MW, even as ERCOT argues PRC is the wrong metric for judging reliability.
Jeff McDonald, Ph.D., director of ERCOT IMM and vice president of Potomac Economics, presented an overview of the 2025 State of the Market Report for ERCOT to ERCOT TAC on July 29, 2026.1
Potomac Economics found that ERCOT's all-in price of electricity increased by only 13.8% year-over-year despite a 61% year-over-year increase in the price of natural gas.2
Potomac Economics reported that ERCOT's implied heat rate — the price of electricity divided by the price of gas — decreased by 28% year-over-year.3
Average PRC was over 11,000 MW in 2025.4
From 2017 through 2020, resource-hours committed through RUC per year ranged from 202 to 613.5
Potomac Economics states that ERCOT has argued PRC is an inappropriate metric for assessing reliability.6
The frequency of shortage conditions has dropped precipitously in recent years.7
ERCOT established a conservative operations policy after Winter Storm Uri to maintain a high level of reserves on the grid at all times.8
Inaccurate forecasting of battery state of charge is a growing challenge for ERCOT's appropriate use of Reliability Unit Commitment.9
Coverage notes
Gridlight’s notes on what we looked for and did not find; these statements are Gridlight’s own and are not claim-checked against archived sources.
- The presentation materials summarize ERCOT's rebuttal to the monitor's reserve and shortage-frequency findings but do not show whether ERCOT has committed to, or resisted, any change to its conservative-operations policy or ancillary-service procurement targets in response.
- The materials do not connect the RUC resource-hour trend or the battery state-of-charge forecasting challenge to any other driver discussed in the report, so this piece does not draw a connection between them.