The Electric Reliability Council of Texas released today an update of its May 2007 assessment of electric peak demand and reserves showing an improved generation outlook.   

The addition of 836 megawatts (MW) of planned generating capacity beginning in 2009 plus 2,460 MW in 2010 has improved the short-term electric supply outlook for the ERCOT region.  CEO Bob Kahn presented  the December update at the Public Utility Commission’s open meeting this morning. 

The previous assessment showed ERCOT’s reserve margin dropping to 10.1 percent beginning in 2009.  With the updated generation additions, the 2009 reserve margin increases to 12.1 percent, slightly below the 12.5 percent target needed to ensure reliability for extreme temperatures and unexpected major generation outages. 

In the updated assessment for 2010, the reserve margin increases to 14 percent, from 8.3 percent. 

Reserves continue to look tight in 2011, 2012 and 2013 with respective reserve margins of 11.2 percent, 10.5 percent and 8.2 percent.   

Potential resources that are not included in the assessment include over 4,000 MW of generation capacity which is currently mothballed but could be brought back into service. 

Other potential resources include units that are in the final phase of an interconnection study but lack either an air permit or signed interconnection agreement.  ERCOT is currently tracking new generation proposals totaling 893 MW in 2008, to 15,517 MW in 2013.   

The December update of the May 2007 Capacity, Demand and Reserves report is focused on generation and does not include a revised update of the load forecast, which will be updated in the next annual forecast in May 2008.  

“Reserve margins are assessments based on best estimates of a snapshot in time,” said Bill Bojorquez, vice president of system planning for ERCOT.  “The assessments change as new generation is added and old generation is mothballed or decommissioned,” Bojorquez said. 

“To ensure long-term reliability for the region, ERCOT must inform market participants of the generation outlook because in the deregulated market, it is the generation owner who bears the risk of investment and decides when and where to build,” Bojorquez said.  “We are optimistic that additional generation interconnections under study for summer 2009 operation will be completed by the time the full report comes out in May.” 

The ERCOT coverage area includes electrical consumer load in 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. 

RESERVE MARGIN

Generation reserves in excess of forecasted peak demand needed to ensure reliability for extreme temperatures and unexpected major outages; minimum reserve margin target of 12.5% approved by ERCOT Board of Directors in 2002 

NEW GENERATION

Completed air permits or interconnection agreements since the May 2007 report