ERCOT moves customers from retailer after default

HOUSTON, May 27 (Reuters) - The Texas grid agency will begin transferring electric customers from Houston-based National Power to other retail suppliers on Wednesday after the company said it could no longer meet its financial obligations, the agency said.

The power retailer is the second this month to default, according to the Electric Reliability Council of Texas (ERCOT) which administers customer switching for 6 million Texans in the state's competitive market.

The Texas wholesale power market has seen wild price swings triggered by a number of factors including a jump in wind generation, transmission congestion and late spring power plant maintenance schedules.

Since April, next-day power prices have exceeded $100 a megawatt-hour in some ERCOT areas, well-above year-earlier prices as volatility between the zones was exacerbated by increased wind generation.

Prices in the real-time market have frequently hit the market's $2,250 MWh cap, according to ERCOT data.

Next-day power in the Houston zone and in South Texas for Wednesday delivery traded between $400 and $500 per MWh, compared to less than $70 per MWh a year ago.

"When you see volatility in the supply market, that's when we've seen problems for retailers," said Mark Jacobs, chief executive of Reliant Energy (RRI.N), one of the state's largest retailers last week.

National Power had 15,163 customers, the bulk of which were residential customers that will be moved to other providers designated for each area of the state in the next three days, ERCOT said in a statement.

The company's total load is about 616 megawatt-hours a day, ERCOT said.