News Release

March 25, 2013

New pilot program offers incentives to reduce electric use during summer peaks

AUSTIN, TX, March 25, 2013 -- The Electric Reliability Council of Texas (ERCOT) Board of Directors at its March meeting approved a pilot for the upcoming summer that will expand its options to reduce electric use during peak summer conditions when demand is high and power supplies are tight.

The Weather-Sensitive Emergency Response Service pilot is open to electric users — either as individual customers or as part of an aggregated group of consumers — who can reduce power use by at least 100 kilowatts (kW), about the amount 20 homes use during peak demand. Participants, through qualified scheduling entities, will be paid based on how much they reduce demand, either in testing or an actual event. ERCOT can use this option beginning with the first level of energy emergency alert (EEA 1), when operating reserves drop below 2,300 megawatts (MW). Most ERCOT demand response programs go into effect during EEA 2, when reserves drop below 1,750 MW.

"During the hottest hours of summer peak days, electric use by residential consumers represents about half of total demand, due mainly to increased use of air conditioning," said ERCOT CEO Trip Doggett. "This pilot will provide new incentives for participants to reduce that weather-related consumption and support reliability for the entire grid.

A presentation by ERCOT’s new meteorologist, Chris Coleman, indicated that this summer may offer opportunities to use the new demand response option.

"An overall hot and dry — hotter than normal, drier than normal — scenario is forecast over the next six months, in particular for the summer season," said Coleman. "Drought concerns will also continue for most of the ERCOT region throughout the summer months."

The ERCOT board also unanimously endorsed two Regional Planning Group recommended projects to upgrade existing transmission facilities in the Eagle Ford Shale region, where electric use has grown rapidly due to oil and gas exploration and production. The upgrades, which are targeted for completion by the end of 2014 and by summer 2016, will improve grid reliability and support growing demand.

During executive session, the board also ratified two new vice presidents, who will begin their new roles April 1. Ken McIntyre will be the new vice president for Grid Planning and Operations, and Brad Jones will be the new vice president for Commercial Operations.

Other March board meeting updates

Chief Executive Officer Report

ERCOT CEO Trip Doggett provided several updates, which included:

  • ERCOT recently released the preliminary summer Seasonal Assessment of Resource Adequacy (SARA), which indicated there is a significant chance that ERCOT will need to issue Energy Emergency Alerts and appeal for conservation on some days during the upcoming summer season.
  • Results from the loss-of-load probability study, which will help inform future decisions about ERCOT’s target planning reserve margin, continue to advance through the stakeholder process. The margin, currently set at 13.75 percent, is the difference between annual firm peak load and generation capacity. The target is designed to support reliability criteria of no more than one grid-related outage event in 10 years.
  • The first wind record for 2013 was set on Feb. 9 at 7:08 p.m., with wind resources providing nearly 28 percent of the 34,082 MW load at the time. Doggett noted that all Competitive Renewable Energy Zone projects in the ERCOT region are on track for completion by the end of 2013, which will enable more wind power to move across the grid from West Texas.
  • Participants from the Engineering Development Program, which encourages entry-level engineers to learn more about their field by working at ERCOT, were recognized by the board.
  • ERCOT is currently tracking 162 active generation interconnection requests totaling more than 48,000 MW.

Independent Market Monitor report

In addition to the regular monthly update on electric prices, energy use, heat rate, congestion costs, ancillary services and wind production, Dan Jones from Potomac Economics presented a review of the 2012 Wholesale Market Outcomes.

Technical Advisory Committee (TAC) recommendations

The board approved 14 NPRRs, four Planning Guide Revision Requests, two System Change Requests and two Nodal Operations Guide Revision Requests.

The next meeting of the ERCOT Board of Directors will be May 14.

The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to more than 25 million Texas customers -- representing about 90 percent of the state’s electric load. As the independent system operator for the region, ERCOT schedules power on an electric grid that connects more than 46,500 miles of transmission lines and 600+ generation units. It also performs financial settlement for the competitive wholesale bulk-power market and administers retail switching for nearly 8 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. Its members include consumers, cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities, transmission and distribution providers and municipally owned electric utilities.

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