ERCOT Organization Backgrounder

Overview

Founded in 1970, ERCOT is an independent, not-for-profit organization responsible for overseeing the reliable and safe transmission of electricity over Texas' main electricity power grid. ERCOT is one of 10 electricity reliability regions in North America operating under the reliability and safety standards set by the National Electricity Reliability Council (NERC).  As the independent system operator (ISO) since 1996, ERCOT has been the broker between competitive wholesale power buyers and sellers. ERCOT ISO also provided the platform upon which Texas' electric utility industry made the transition to state-legislated retail competition, which began on January 1, 2002.

The Power Grid

Texas' main electric power grid is a 38,000-mile network of long-distance, high-voltage transmission lines and substations that carries bulk electricity to multiple utility companies for distribution to their customers. This grid, which has an approximately 70,000 megawatts of available generation capacity, delivers approximately 85 percent of Texas' overall power usage to 20 million Texans.

Coverage Area

The ERCOT coverage area includes approximately 75 percent of the land area in Texas. The region does not include the El Paso region, the northern panhandle, a small area around Texarkana and a small portion of the region around Beaumont.

Members

ERCOT's members include electric utility market participants in the areas of investor- and municipally-owned electric utilities, rural electric co-operatives, river authorities, independent power producers, power marketers and retail consumers.

Governance

ERCOT is a membership-based 501 (c)(6) nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas (PUCT) and the Texas Legislature.   The ERCOT board of directors is a 16-member "hybrid" group that includes six market participants from each of the six electric utility market groups,  three consumer representatives, five independent (unaffiliated) members, the ERCOT CEO and the Texas PUCT chair (non-voting). The Technical Advisory Committee (TAC) makes policy recommendations to the board of directors. TAC is assisted by four standing subcommittees, as well as numerous workgroups and task forces.

Executive Operations

ERCOT's board of directors appoints ERCOT's CEO and COO to direct and manage ERCOT's day-to-day operations. They are accompanied by a team of executives and managers, who are responsible for critical components within ERCOT's four operations areas.

Staff

ERCOT's staff includes professionals highly trained in power system engineering and business operations, who carry out dispatching, operations planning, system planning, accounting, and support functions.

Operations Areas

To carry out its appointed duties, ERCOT is involved in many activities every day within its four operations areas:

• Market Operations includes maintaining the intricate balance between forecasted electricity power generation schedules and actual electricity demands among all competing market participants.
• Production Operations includes transmission grid security, planning, and market support.
• Financial Operations includes client relations, meter acquisition and data aggregation, settlements, billing, business rules, registration, load profiling, and renewable energy credit program management.
• Registration includes acting as a centralized registration agent for both retail premises and market participants for the entire state of Texas.

Facilities

ERCOT operates out of two locations:

• Executive and Administration Center - The 45,000-square-foot executive and administration center near the Austin-Bergstrom Airport houses a backup operations center.
• Operations Center - ERCOT's operations activities are headquartered in Taylor 25 miles northeast of Austin in an 85,000-square-foot operations center and additional 75,000-square-foot facility.