News Release

November 26, 2013

ERCOT programs, operational improvements move forward

AUSTIN, TX, Nov. 26, 2013 – The Electric Reliability Council of Texas (ERCOT) Board of Directors at its Nov. 19 meeting took actions to enhance operational flexibility and improve market signals when operating reserves are tight.

Those steps included approving the protocol revisions needed to implement an Operating Reserve Demand Curve (ORDC). This real-time price adder will apply incrementally to energy sold when operating reserves are low. The ORDC reflects the increasing value of energy as the risk of outages goes up.

The board also approved revisions to ERCOT’s Emergency Response Service, establishing the rules for a 30-minute ERS option that began as a pilot in 2012. Although the grid has not experienced an emergency requiring ERS since the pilot began, ERCOT has tested the ability of more than 1,500 sites to reduce their electric demand as directed within 30 minutes of activation.

By the end of the pilot, ERCOT was able to dispatch about 138 MW of demand response capacity — enough power to serve about 27,600 homes — during late-afternoon peak demand hours. While ERCOT has a well-established 10-minute ERS program, this 30-minute option will help make ERCOT demand response programs more accessible for some commercial customers and groups of residential consumers who could not qualify for the 10-minute option.

Additionally, the board approved a protocol revision that will reduce the time required to settle obligations in the real-time market from seven days to five days after the operating day. The reduced timeline will address concerns about credit exposure associated with recent and future increases to the systemwide offer cap.

The board also approved changes to how some resources are calculated in determining the planning reserve margin.

Strategic plan focuses on innovation, collaboration

The board announced a Strategic Plan for the next five years that focuses on four key areas for future success: operational reliability, flexible market design, data transparency and access, and committee strategic alignment.

“As technologies evolve, ERCOT must be nimble and creative while remaining focused on its core priorities,” ERCOT Board Chair Craven Crowell stated in the plan. “Our vision is not only to keep the lights on in Texas, but also to ensure that ERCOT is making the most of new resources and ideas to prepare for the grid and electric market of the future.”

Crowell thanked the Public Utility Commission of Texas (PUC) for approving ERCOT’s biennial budget for 2014-15, which focuses on key strategic priorities. The budget approval includes the first increase in ERCOT’s system administration fee since 2004. The new fee of 46.5 cents per megawatt-hour — an increase of about a nickel a month for average residential consumers — becomes effective Jan. 1, 2014.

Regarding ongoing resource adequacy discussions, Crowell explained that the board does not plan to take action on proposed changes to the target reserve margin until the PUC provides further direction.

“I believe the best course for the ERCOT board at this point in time is to avoid adding a new reserve margin announcement to this fast-moving series of events,” he said. “Rather than clarifying matters, this would complicate the work of the policymakers and only serve to confuse the public.”

Other November board meeting updates

Chief Executive Officer Report

ERCOT CEO Trip Doggett provided several updates, which included the following:

  • ERCOT staff is working to refine its load forecast models and process. Staff will update the board on these proposed changes on Dec. 10. The release of the next Capacity, Demand and Reserve report will be postponed.
  • ERCOT staff has been working with generation companies to assess preparedness for winter weather. These assessments include selective site visits and review of weatherization plans.
  • Two ERCOT executives recently visited a desalination plant in El Paso to learn more about its operations and potential for demand response.
  • He noted several recent staff successes, including national publication of a synchrophasor study and leadership in educational partnerships that were recognized for excellence by the State Board of Education.

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. She also reported on peaker net margin trends since 2011.

Technical Advisory Committee (TAC) report

The board approved 14 Nodal Protocol Revision requests, including those noted above, and one Planning Guide Revision Request as presented by TAC Chair Kenan Ogelman.

The next meeting of the ERCOT Board of Directors will be Dec. 10.

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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.

Contact
512-275-7432
media@ercot.com