Topics:

• New Release of Grid Operations Application
• Annual Transmission Report
• Hurricane Report Summary
• Fee Case, Nodal Proceedings
• Staff Updates

New Release of Grid Operations Application Implemented

$20.1 Million in Market Savings Anticipated

ERCOT went live October 5 with a new release of its grid operations application, EMMS 4, which is anticipated to create $20.1 million a year in savings to the ERCOT market.  Chief Information Officer Ron Hinsley reported at the Board of Directors meeting Tuesday, Oct. 18, that the total software upgrade encompassed nine protocol revision requests through 17 projects and affected 60 ERCOT servers.  More than 85 ERCOT employees were involved in all phases, representing approximately 31,000 hours.  The new platform was activated over a weekend.  No impact to the frequency control application was reported, and only minimal impact to the real time balancing market was experienced, Hinsley said.

Annual Transmission Report Shows Significant Reduction in Congestion Costs

Director of Transmission Services Bill Bojorquez presented highlights of ERCOT's 2005 Report on Existing and Potential Electric System Constraints and Needs to the board.  Capital and operational improvements have reduced congestion costs significantly, Bojorquez said, including the use of dynamic line ratings.  Dynamic line ratings adjust for outside air temperature, enabling grid operators to permit more power to flow across the network during certain hours as transmission lines can carry more electricity when the temperature is lower.  More than 2,000 line ratings are analyzed and adjusted hourly, based on temperature.

Since 1999, ERCOT transmission service providers have completed over 4,400 circuit miles of transmission lines and 24,600 MVS of autotransformer capacity, with an estimated capital cost of over $2.2 billion.  Projects identified in the report to serve the electric system through 2011 are estimated to cost approximately $2.8 billion over the next six years and are expected to add 3,750 circuit miles of high-voltage transmission lines and 23,600 MVA of autotransformer capacity to the ERCOT system.

Intrazonal (local) congestion costs have decreased from over $360 million in 2003-04 to less than $250 million in 2004-05, due mostly to transmission and operation improvements.  Local congestion costs are uplifted to ERCOT market participants region-wide, based on load-ratio share.  Inter-zonal congestion costs have decreased from over $80 million in 2001-02 to less than $30 million in 2004-05.  This decrease can be attributed to the implementation of direct assignment of zonal costs to market participants scheduling energy over identified constraints.

The annual comprehensive report was filed Oct.10 with the Public Utility Commission (PUC).  The 116-page report is posted on the ERCOT Web site under Reports and Presentations 2005.

Hurricane Rita Summary Reported

Chief Operating Officer Sam Jones presented a summary of Hurricane Rita preparations and impact at the board meeting.  Within the ERCOT region, up to 70,000 customers in the Lufkin/Nacogdoches/Tyler area experienced outages, starting at 5 p.m., Sept. 23, due mainly to distribution system damage.  One 76 MW plant was forced out by the storm and 12 of 30 plants in the Houston area were shut down in advance of the storm.  Transmission damage included 16 138 KV lines, one 138/69 KV autotransformer, nine 69 KV lines and one 69 KV substation.  All were back in service by 6 a.m., Sept. 28.

Jones noted that the brunt of power outages due to storm damage was sustained by customers in the Entergy Gulf States service area, which is adjacent to but not interconnected to the ERCOT grid.  Jones updated the board on ERCOT’s efforts to assist the enablement of two block-load transfers to help Entergy and Deep East Texas Electric Cooperative (DETEC) restore service.  The DETEC tie with TXU Electric Delivery has been discontinued, and the tie between CenterPoint and Entergy is scheduled to begin the disconnection process this week, a CenterPoint spokesman said.

The complete report is available on the ERCOT Web site Meeting Calendar by date of the board meeting.

Timelines for Fee Case, Nodal Proceedings Presented

CEO Tom Schrader reported on the progress of two contested cases before the Public Utility Commission (PUC): the 2006 ERCOT fee filing and the nodal market protocols.  A pre-hearing on the fee filing is scheduled for Thursday at the PUC, and the hearing before the commissioners is anticipated in January or February, Schrader said.

Timeline for the nodal market contested case is:

ERCOT has posted a copy of its fee and rate application on the ERCOT Web site under Legal Notices.

The nodal draft protocols are posted under TNT Documents.

Board materials and presentations are posted each month on the ERCOT Web site Meeting Calendar by date of the board meeting.

Staff Updates

Kristi Hobbs was promoted to manager of market rules. She has been with ERCOT since 2002 and was formerly with the electric division staff of the Public Utilities Commission of Texas.  She has undergraduate and masters degrees, with honors, from Texas A&M University.

Calvin Opheim was promoted to manager of energy analysis and aggregation, bringing 20 years of industry experience to the position.  Opheim joined ERCOT in August 2000 as a senior meter data analyst and played a key role in implementing ERCOT's data aggregation system.  In addition, he was extensively involved in market synchronization efforts.  He was promoted to manager of settlements and billing applications in 2002 and has managed all Lodestar development efforts since that time.  Prior to joining ERCOT, he worked for two utilities in Florida in the areas of load research/profiling and load forecasting.

Mark Walker resigned as deputy general counsel in September to accept a position as director of regulatory affairs for one of the ERCOT Region market participants.  Walker was with ERCOT for more than five years and helped draft the first set of protocols.  He was involved in all legal matters and directed regulatory and legislative relations.

ERCOT Meeting Calendar

October 2005