News Release

September 24, 2013

ERCOT Board brings demand response to the real-time electric market

AUSTIN, TX, Sept. 24, 2013 — Some electricity consumers could participate more actively in the Texas electric market in the future, following actions by the Electric Reliability Council of Texas (ERCOT) Board of Directors at its Sept. 17 meeting.

A revision to market rules will enable some eligible electric users to provide demand response services at five-minute intervals through their retail providers. Participating controllable load resources will be able to offer this service through ERCOT’s day-ahead market, in turn setting the price to provide that capacity on a real-time basis when reserve power is needed to help keep up with demand. In a related action, the board also approved performance requirements for participation in the program, which is set to begin after necessary system updates are completed.

“I applaud the staff and stakeholders for bringing us new ideas and workable solutions on these issues and others,” said ERCOT Board Chairman Craven Crowell of the steps to continue diversifying ERCOT’s demand response options.

The board also heard a report on a pilot enabling weather-sensitive loads — essentially electric use associated with increased air conditioning use in the summer — to participate in ERCOT’s Emergency Response Service (ERS). The pilot will end Sept. 30. Although ERCOT did not need to activate ERS this summer, periodic tests provided data that will be useful as stakeholders begin shaping rules to create a program by next summer.

With summer 2013 coming to an end, the board also received a number of updates on summer performance. Peak demand on Aug. 7 reached 67,180 megawatts (MW) — later updated to 67, 245 MW following initial settlement. This is about 1,000 MW below the peak forecast in the summer Seasonal Assessment of Resource Adequacy (SARA), due primarily to mild weather conditions in the Houston area during the 4-5 p.m. hour when electric use in the ERCOT region hit the highest level. One MW is enough power to serve about 200 homes during times when electric use is highest.

Reserve margin update

Director of System Planning Warren Lasher reported on issues associated with the planning reserve margin that helps measure resource adequacy in ERCOT’s long-term forecasts.

Lasher updated the board on steps ERCOT will take in the future to address stakeholder concerns associated with generation outage data, measurement of voluntary demand response by consumers, and analysis of wind power capacity.

Crowell noted that continuing discussions at the Public Utility Commission of Texas (PUC), along with an ongoing study to identify an Economically Optimal Reserve Margin, “will have an important and significant impact on how we look at the reserve margin metric in the future.”

The PUC plans to receive input on a number of resource adequacy topics, including the components associated with the planning reserve margin, during an Oct. 8 workshop. New PUC Commissioner Brandy Marty attended the ERCOT board meeting.

Other September board meeting updates

Chief Executive Officer Report

ERCOT CEO Trip Doggett provided several updates, which included:

  • With energy use so far this year falling below annual forecast, ERCOT expects to end the year with a $1.6 million revenue shortfall. Steps to balance the budget will include continued efforts to control labor expenses, facility costs, hardware/software support and contract costs.
  • By late August, about 88 percent of Texas was in moderate or worse drought. ERCOT is actively involved in statewide drought preparedness and is working with stakeholders to prepare for potential impacts to electric generation in the ERCOT region.
  • The most recent SARA, released Sept. 1, indicates that the system will have adequate generation available even in the most severe planning scenarios.
  • Recent updates to ERCOT’s information technology systems provided improvements in many areas, including the market and energy management systems, and support implementation of several market rules.
  • An update to the ERCOT Energy Saver mobile app now includes real-time system conditions, wholesale pricing information and access to news releases and other information. The update is available for Apple and Android devices.
  • ERCOT staff presented six papers, participated in six panel discussions, and led two working groups during the July meeting of Institute of Electrical and Electronics Engineers (IEEE) Power and Energy Society.

Independent Market Monitor report

Beth Garza of Potomac Economics provided the regular monthly update on electric prices, energy use, heat rate, congestion costs, ancillary services and wind production. The IMM report included a discussion of pricing trends, decreases in the need for some reliability-related regulation services, and the peaker net margin so far in 2013.

Technical Advisory Committee (TAC) report

The board approved 10 Nodal Protocol Revision Requests, eight of which were unopposed. Approved NPRRs include two associated with scheduling load resources and others related to the wholesale storage load definition, price-reversal mitigation and managing credit exposure.

TAC Chair Kenan Ogelman also reported on steps being considered to reduce the settlement timeline and other recent TAC activities.

The next meeting of the ERCOT Board of Directors will be Nov. 19.

 

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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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