History

Early History Recent History
Timeline
1941 1970 1995 1996 1999 2002 2003 2006 2007   2010 2011
TIS
Formed
ERCOT
Created
Legislature
Deregulates
Wholesale
ERCOT
Becomes
ISO
Senate
Bill 7
Retail
Market
Opens
Nodal
Market
Project
Begins
Nodal
Protocols
Approved
Wind
Capacity
Tops 8,000 MW

 

Nodal Go-Live New Records for Summer, Winter, Wind

1941 – Utilities Band Together to Aid War Effort

At the beginning of World War II, several electric utilities in Texas banded together as the Texas Interconnected System (TIS) to support the war effort. They sent their excess power generation to industrial manufacturing companies on the Gulf Coast to provide reliable supplies of electricity for energy-intensive aluminum smelting.

Recognizing the reliability advantages of remaining interconnected, the TIS members continued to use and develop the interconnected grid. TIS members adopted official operating guides for their interconnected power system and established two monitoring centers within the control centers of two utilities, one in North Texas and one in South Texas.

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1970 – TIS Forms ERCOT to Comply with NERC Requirements

TIS formed the Electric Reliability Council of Texas (ERCOT) in 1970 to comply with North American Reliability Council (NERC) requirements. ERCOT was staffed by two retired employees from utilities.

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1981 – ERCOT Assumes Central Operating Coordinator Role

In 1981, TIS members transferred all operating functions to ERCOT, and ERCOT became the central operating coordinator for Texas. ERCOT opened its first office in 1986 and hired four full-time employees.

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1995 – Texas Legislature Votes to Deregulate Wholesale Generation

In 1995, the Texas Legislature amended the Public Utility Regulatory Act to deregulate the wholesale generation market. The Public Utility Commission of Texas (PUCT) began the process of expanding ERCOT's responsibilities to enable wholesale competition and facilitate efficient use of the power grid by all market participants.

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1996 – ERCOT Becomes First ISO in the US

On August 21, 1996, the PUCT endorsed an electric utility joint task force recommendation that ERCOT become an Independent System Operator (ISO) to ensure an impartial, third-party organization was overseeing equitable access to the power grid among the competitive market participants.

This change was officially implemented September 11, 1996, when the ERCOT Board of Directors restructured its organization and initiated operations as a not-for-profit ISO, making it the first electric utility industry ISO in the United States.

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1999 – Legislature Votes to Deregulate Retail Electric Market

On May 21, 1999, the Texas Legislature passed Senate Bill 7 (SB 7) which required the creation of a competitive retail electricity market to give customers the ability to choose their retail electric providers, starting January 1, 2002.

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2000 – Market Protocols Developed through Stakeholder Collaboration

From 1999 to 2000, ERCOT sponsored a stakeholder process to address how ERCOT's organization would administer its responsibilities to support the competitive retail and wholesale electricity markets while maintaining the reliability of electric services.

In thousands of hours of meetings and mark-up sessions, the stakeholders or market participants worked together to develop new ERCOT protocols – the rules and standards for implementing market functions regarding energy scheduling and dispatch, ancillary services, congestion management, outage coordination, settlement and billing, metering, data acquisition and aggregation, market information systems, transmission and distribution losses, renewable energy credit trading, registration and qualification, market data collection, load profiling and alternative dispute resolution.

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2001 – Ten Control Centers Merged into One Control Center

On July 31, 2001, the existing 10 control areas in the ERCOT region were consolidated into a single control area.

Wholesale power sales between electric utilities began to operate under the new electric industry restructuring guidelines, including centralization of power scheduling and procurement of ancillary services to ensure reliability.

Commercial functions were centralized to facilitate efficient market operations, including meter data acquisition and aggregation, load profiling and statewide registration of retail premises to facilitate switching by customers between competitive electricity providers.

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2002 – Retail Electric Market Opens, Enabling Customer Choice for 6.5 Million

On January 1, 2002, ERCOT launched the competitive retail electric market – on time and on budget – allowing individuals and corporations in most cities to choose power suppliers.

SB 7 applied specifically to investor-owned utilities, enabling customer choice for 6.5 million, but allowed municipal utilities and electric cooperatives (approximately 24 percent of the ERCOT load) to decide if they wanted to opt to participate in competition.

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2003 – Nodal Market Design Project Begins

In September 2003, as part of Project 26376, the PUCT ordered ERCOT to develop a nodal wholesale market design, with the goal of improving market and operating efficiencies through more granular pricing and scheduling of energy services.

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2004 – Major System Upgrade; First Cooperative Joins Competitive Market

In August 2004, ERCOT launched a major transaction system upgrade, culminating a massive two-year project and representing the largest upgrade of the electronic transaction system since the retail market launch. Switching transactions averaged 38,000 per month and 9,000 per day during 2004.

Nueces Electric Cooperative (NEC) became the first cooperative or municipal utility to “opt in” to participate in the Texas competitive electricity market. NEC enrolled its first customer on September 1, 2004.

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2005 – One Fourth of Residential Customers Switched to Competitor

By September 2005, more than 2 million total customer switches to a competitive retail provider had been completed. Almost one-fourth of residential customers had switched to a competitive retail provider, in addition to 29 percent of small non-residential customers and 72 percent of large non-residential customers.

That September, the Texas Nodal Team submitted draft nodal protocols to the PUCT.

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2006 – Nodal Market Protocols Approved; Energy Usage Hits 62,339 MW

On April 5, 2006, the PUCT signed an order approving the stakeholder-developed protocols for the nodal market, with an implementation date of January 1, 2009.

On August 17, 2006, a record high demand of 62,339 megawatts of power was used.

Texas moved ahead of California as the top wind-producing state.

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2007 – Wind Capacity Tops 8,000 MW; Residential Switching at 46 Percent

A record 3,220 MW of wind generation was added to the ERCOT grid for a total of 8,005 MW, maintaining ERCOT’s lead as the top wind-producing state.

Five years after launching the retail market, 46 percent of residential customers had switched from the incumbent utility.

On May 31, 2007, Bob Kahn, former Austin Energy deputy general manager, was named CEO.

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2008 – New Launch Date for Nodal Market Announced

A new go-live date of December 2010 for the nodal market implementation was announced.

Almost 6,600 miles of transmission improvements completed since 1999, and approximately 39,000 MW of new generation added since 1996.

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2009 – Peak Demand Hits 63,400 MW

On July 13, 2009, a new record high peak demand of 63,400 megawatts of power was used.

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2010 – Nodal Market Launches Dec. 1

On Dec. 1, ERCOT launched a comprehensive nodal market featuring locational marginal pricing for generation at more than 8,000 nodes, a day-ahead energy and ancillary services co-optimized market, day-ahead and hourly reliability-unit commitment, and congestion revenue rights.

Wind Output Hits 7,227 MW

Wind output hit a new record of 7,227 MW on Dec. 11, representing 25.8 percent of the load.  Wind generation in the ERCOT region totaled 9,528 MW as of Decenber 2010.  With more than 10,000 megawatts of new renewable generation in the ERCOT-administered state Renewable Energy Credit program, Texas exceeded the state legislature’s goal 15 years early. 

Peak Demand Exceeds 65,000 MW

On August 23, 2010, ERCOT recorded a new record high peak demand of 65,776 MW of power. 

Doggett Named CEO

On May 27, former chief operating officer and interim CEO Trip Doggett was officially named CEO.

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2011 – New Records for Summer, Winter and Wind 

ERCOT set a new all-time summer peak demand of 68,867 MW on Aug. 3, in addition to breaking monthly demand records in February, May, June, July September and December. A new winter peak demand record of 57,315 MW was recorded on Feb. 10.  ERCOT also hit an all-time high for wind output on Oct. 7, when wind generation reached 7,400 MW–more than 15 percent of the load at the time.  Installed wind capacity surpassed 9,600 MW in 2011–maintaining ERCOT's lead as the top wind producer in North America.