Resource adequacy, summer demand remain priorities for ERCOT Board of Directors

AUSTIN -- The Electric Reliability Council of Texas (ERCOT) Board of Directors at its July meeting took several actions to ensure market rules and practices continue to support an efficient market and address future resource adequacy concerns.

Board members also sought assurance that the grid, generators and consumers are prepared for days when temperatures and electricity use likely will escalate.

“While significant efforts have gone into preparing for our peak season, we have a lot of work ahead of us,” said ERCOT Board Chairman Craven Crowell. “The recent rains and more normal temperatures have certainly been welcome, but our experience this summer shows that ERCOT must remain vigilant.”

Staff presented ongoing and upcoming conservation messaging and shared concepts for public service announcements that are scheduled to begin in August. The Public Utility Commission of Texas (PUC) “Power to Save” campaign will focus on taking action during the 3-7 p.m. hours to reduce peak demand and help consumers save money on their electric bills.

“I’m encouraged by ERCOT’s and the PUC’s efforts to increase consumer education and awareness of the tremendous power consumers have in shaping our market,” said Crowell, reminding board members that “increasing the amount and sophistication of demand response is a key piece of the puzzle in resolving resource adequacy concerns.” 

The board also approved implementing $500 user fees for congestion revenue right account holders and for independent entities that register to use ERCOT’s Market Information System. These participants will be required to pay fees consistent with those already assessed to qualified scheduling entities (QSEs) and competitive retailers. 

Other July board meeting updates

CEO Update

ERCOT CEO Trip Doggett provided several updates, which included:

·         On June 25 and 26, ERCOT experienced new June peak demand records of 65,047 megawatts (MW) and 66,583 MW, respectively, and the system was able to serve the load, as well as 66,002 MW of demand on June 27, without declaring an Energy Emergency Alert or deploying non-spinning reserves. One MW is enough electricity to power about 200 homes during peak demand.

·         Wind power generation hit a new instantaneous record of 8,368 MW at 7:25 p.m. on June 19, surpassing the previous record of 7,925 MW set in April.

·         ERCOT began in late June to post non-binding forward prices on its website to help encourage price-responsive demand.

·         The first auction for participants in the Emergency Response Service 30-minute pilot project awarded contracts for less than 20 MW of demand response. Market participants had very limited time following new PUC rules and ERCOT approval of the project, and ERCOT staff anticipates more participation as the project matures.

·         The ERCOT-sponsored Beginners Learning Alternative Designs for Energy club at Taylor High School won first prize, $1,000 for next year’s program, during the recent IEEE Photovoltaic Specialists Conference in Austin.

·         A recent Network Model Management System (NMMS) upgrade has integrated planning and operational modeling data, the successful result of six years of coordination by ERCOT and stakeholders to enable the planners and operators to work from the same data. Crowell praised the effort, which he said “leads the industry nationwide, and puts ERCOT and its market participants in a unique position to ensure current operations and future plans are based on an integrated, consistent data.”

Independent Market Monitor Report

In addition to his regular monthly report on electric prices, energy use, heat rate, congestion costs, ancillary services procurement and wind production, Dan Jones from Potomac Economics presented a report disputing recent claims of market manipulation.

Technical Advisory Committee Update

The board discussed and ultimately approved three Nodal Protocol Revision Requests (NPRRs) that had not received unanimous approval by the Technical Advisory Committee:

·         NPRR416 – Creation of the RUC Resource Buyback Provision: Allows generators to convert reliability unit commitments submitted prior to the operating hour to self-committed resources, without a financial penalty, up to one hour before the units are scheduled to go on-line.  

·         NPRR459 – Better Matching Forward Collateralization with Forward Risk in the Real-Time Market: Changes the process used to determine the amount of collateral required from QSEs by making adjustments to better reflect the seasonality of market prices.

·         NPRR469 – Modification to Constraint Competitive Tests (CCT): Defines a test to determine if a constrained transmission element has multiple owners that can reduce the transmission flow and competitively relieve the constraint or if a single owner has market power and relieves the constraint in a non-competitive manner.

The board also adopted a methodology for setting maximum shadow prices for network and power balance constraints to reflect the upcoming increase to the System-wide Offer Cap and the TAC’s recommended changes to the Power Balance Penalty Curve that were requested by the PUC.

Other NPRR approvals

The board approved on consent 14 NPRRs and two Planning Guide Revision Requests (PGRR) that were approved unanimously by the Technical Advisory Committee.

·         NPRR436  – Clarify the Use of the Defined Term Season and Its Derivatives

·         NPRR438  – Additional Minimum Counterparty Qualification Requirements Including Risk Management Capability Requirements

·         NPRR443  – Removal of Switchable Generation Resource Plans from Protected Information

·         NPRR445  – DC Tie Load Zone Price Clarification

·         NPRR446  – Correction of Non-Spin Ancillary Service Schedule Telemetry for Standing Non-Spin Deployment

·         NPRR447  – Remove Day-Ahead Qualified Scheduling Entity Requested Decommit Language

·         NPRR452  – Clarification of Reactive Power Requirements

·         NPRR454  – Removal of Unfunded Project List Language

·         NPRR455  – CRR Shift Factors Report

·         NPRR456  – Clarification of Definition of Electrically Similar Settlement Points and Heuristic Pricing Posting

·         NPRR457  – Daily Update of New Electric Service Identifiers and Advanced Metering System  Meter and Switch Hold Indicators Changes

·         NPRR458  – Establishment of ERCOT’s Central Counterparty Role

·         NPRR462  – Removal of Consumer Benefit Test from the ERCOT Planning Criteria

·         NPRR468  – Alignment of System-Wide Offer Cap and Scarcity Pricing Mechanism Language with PUCT Substantive Rules - Urgent

·         PGRR017  – New Planning Guide Section 6.1 Steady-State Model Development

·         PGRR019  – New Section 1 Overview

The next regular meeting of the ERCOT board is scheduled for Sept. 18. Streaming video and archived broadcasts of ERCOT board meetings are available at Texas Admin.

The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to 23 million Texas customers - representing 85 percent of the state's electric load. As the independent system operator for the region, ERCOT schedules power on an electric grid that connects 40,500 miles of transmission lines and more than 550 generation units. ERCOT also performs financial settlement for the competitive wholesale bulk-power market and administers retail switching for 6.6 million premises in competitive choice areas. ERCOT is a membership-based 501(c)(4) nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature.