TOPICS:

• Board Sends Responsive Reserves Proposal Back For More Study
• NERC Releases Long-Term Reliability Assessment
• ISO/RTO Council Issues Reports On Markets, Demand Response, Renewables
• Over 83,000 MW In Generation Requests Under Review
• Energy Use 2.9 Percent Below Forecast

BOARD SENDS RESPONSIVE RESERVES PROPOSAL BACK FOR MORE STUDY

After a lengthy discussion, the ERCOT Board of Directors voted in Tuesday’s meeting to remand the issue of additional responsive reserves (RRS) procurement back to the Technical Advisory Committee (TAC) for additional work. 

The follow-up issues to be completed by the December board meeting include:

• Is the proposed increase of RRS by 500 megawatts (MW) from 2,300 MW to 2,800 MW the right amount, and should it also include non-spinning reserves (NSRS)?  
• Is the proposal consistent with Section 6.4.1(2) of the ERCOT Protocols and the long-term solution provision of the Emergency Interruptible Load Service (EILS) Rule (PUCT Subst. R. 25.507(h)?  
• Can Loads-acting-as-Resource (LAAR) be maintained at the existing 1,150 MW in all hours of the RRS market if the board increases the amount of RRS, or combination of RRS and NSRS?  (ERCOT staff is working on system changes necessary to ensure that LAAR can continue to participate in the RRS market at the current 1,150 MW level and will report at the December board meeting if the system changes have been completed.  The changes are expected to require six weeks for completion.)  
• Should LAAR be increased above 1,150 MW if RRS is increased above 2,300 MW (with the understanding that the ERCOT study to determine whether this is viable is currently underway but may take up to six months to complete)?  
• When is the increase in RRS or RRS/NSRS combination needed (what time frame and days)?  
• A comparison of the benefits of EILS with an increase in RRS or RRS/NSRS combination.  

In other action, the board approved the 2008 Closely Related Elements and two nodal protocol revision requests. 

ERCOT staff reports included:

• Nodal Update
• Competitive Renewable Energy Zone Update
• Grid Operations Report
• Market Operations Report.  

Board meeting documents are posted on www.ercot.com with the October meeting agenda.  

NERC RELEASES LONG-TERM RELIABILITY ASSESSMENT

Electricity usage in the United States is projected to grow more than twice as fast as committed resources over the next 10 years, the North American Electric Reliability Corporation (NERC) announced in its annual 2007 Long-Term Reliability Assessment, released Tuesday.  The report concludes that some areas – including Texas – could fall below their target capacity margins within two or three years unless additional resources are brought into service. 

ERCOT’s reserve margin is adequate through 2008, the report states, but could fall below the 12.5 percent target starting in 2009, based on existing generation and new generation with signed interconnection agreements.  It does not include over 6,000 MW of mothballed capacity that could be returned to service and a significant number of uncommitted resources under development which will likely improve the reserve outlook.  

ERCOT is also developing transmission plans to study whether up to 25,000 MW of wind capacity can be integrated.  A Competitive Renewable Energy Zone transmission optimization study was recently ordered by the Public Utility Commission of Texas.  In addition, owners of nuclear generation plants are proposing a total of 6,176 MW in ERCOT through 2015. 

Vice President of System Planning Bill Bojorquez is chair of the NERC Reliability Assessment Subcommittee which produced the report.  The 237-page document is available on www.nerc.com.   

ISO/RTO COUNCIL ISSUES REPORTS ON MARKETS, DEMAND RESPONSE, RENEWABLES

The ISO/RTO Council (IRC) released three reports Tuesday highlighting the value that North America’s 10 Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs) bring to the electricity markets they administer.  

The reports are: “Progress of Organized Wholesale Electricity Markets in North America,” “Harnessing the Power of Demand: How ISOs and RTOs Are Integrating Demand Response into Wholesale Electricity Markets,” and “Increasing Renewable Resources: How ISOs and RTOs are Helping Meet This Public Policy Objective.”  

The reports, as well as an 18-page summary of the reports and an ISO/RTO sourcebook, are available on the IRC Web site at www.iso-rto.org.  

OVER 83,000 MW IN GENERATION REQUESTS UNDER REVIEW

The system planning division is currently tracking 195 active generation interconnection requests totaling over 83,000 MW, including more than 35,000 MW of wind generation, according to the September System Planning Report.  

Natural gas projects in the interconnection queue increased to 25,525 MW from 17,390 MW last month.  Nuclear projects remain at 12,386 MW; and coal remains at 9,949 MW.  Wind projects increased to 35,511 from 34,564 MW. 

The regional planning group – including transmission owners, market participants and other stakeholders, led by ERCOT staff – is reviewing proposed transmission improvements with a total cost of $24.8 million. 

New generation which began operations last month included Post Oak Wind Farm in Shackelford County, 200 MW.  

The planning summary also reports that zonal congestion costs for January to August 2007 totaled $31.3 million, according to the CSC utilization report.  The report is posted with the Wholesale Market Subcommittee September meeting documents. 

ENERGY USE 2.9 PERCENT BELOW FORECAST

Preliminary ERCOT settlement data for demand and energy indicates energy consumption through September was down 0.7 percent from last year at this time and 2.9 percent below the forecasted demand (based on normal weather). 

Consequently, revenues from the system administration fee are below budget, as of August 31.  This shortfall is offset by increased generation interconnection study activity and lower operating expenses. 

The unofficial peak demand during September, based on initial settlement data, was 55,079 MW on Friday, Sept. 7.  The all-time maximum peak demand for September is 59,524 MW, recorded on Sept. 28, 2005.