TOPICS:

• Board Approves Revised 2009 Budget
• Board Briefed on Nodal Schedule, Budget Details
• 2008 Energy Consumption Up 1.7 Percent

BOARD APPROVES REVISED 2009 BUDGET

The Board of Directors for the Electric Reliability Council of Texas, grid operator for most of the state, approved a revised 2009 budget excluding nodal activities and maintaining the current system administration fee at its Tuesday board meeting.  

The base operating budget includes a $168.5 million total spending authorization, based on a system administration fee of $0.4171 per megawatt hour (assessed on wholesale energy transactions).  This marks the fifth straight year that ERCOT has maintained a flat or declining fee, CEO Bob Kahn told the board. 

The board had previously approved a 2009 budget in May; however, it assumed a nodal market launch in December 2008.  The revised budget excludes operating cost increases necessary to operate a nodal market, given the delay in the nodal market implementation date, which is tentatively scheduled for December 2010 pending board and regulatory approval. 

The budget presentation is available at this link. 

REGIONAL TRANSMISSION PLANNING CHARTER APPROVED

The board also approved a revised ERCOT Regional Planning Group Charter and Procedures with edits regarding the designation of “neutral projects” and generation interconnections outside the ERCOT region.  The revised planning charter combines the three regional planning groups into a single group and formalizes the coordinated five-year transmission plan process and provides expedited review for projects in that plan. 

REPORTS ON INVESTMENT FUNDS, NODAL, WIND ISSUES, OTHERS PRESENTED

Chief Financial Officer Steve Byone told board members that ERCOT had received an additional distribution of $86.9 million from The Reserve’s U.S. Government Fund.  About 5 percent – or $10 million – of the original investment with the money-market investment management company is still outstanding.  Byone said he expected to receive approximately $3 million of the remaining funds in March or April, but he cautioned that all remaining funds are subject to litigation and expected to take longer to resolve.  [ERCOT closed all its accounts with The Reserve on Sept. 16, 2008, several days after the bankruptcy of Lehman Brothers Holdings, Inc., which triggered a high level of redemption requests for The Reserve’s funds.] 

Vice President of System Planning Kent Saathoff gave a presentation on the challenges in integrating increasing amounts of wind generation in the system.   

Presentations on the nodal implementation included an update from Chief Information Officer Ron Hinsley and from a report from Utilicast, an independent consultant hired by the board to assist in oversight of the nodal project. 

Other staff reports included:

• Market Operations Update
• Informational Technology Report
• Grid Operations and Planning Report

PROTOCOL REVISIONS APPROVED

In other action, the board approved eight protocol revision requests (PRRs) and eight nodal protocol revision requests (NPRRs):

• PRR 753 PRR Appeals Process
• PRR 778 Clarification of Authorized Representative
• PRR 779 Transparency for Power System Stabilizer and Full Interconnection Studies
• PRR 780 Extending Black Start Service Bid Timeline
• PRR 781 Emergency Interruptible Load Service Self-Provision Formula Correction and Clarifications
• PRR 783 Elimination of the Non-ERCOT Load-Serving Entity Fee
• PRR 788 Ramp Rate Limits for Existing Wind-Powered Generation Resources
• PRR 792 Revised Renewable Portfolio Standards Allocation Process
• NPRR 140 Revision to Congestion Revenue Rights Obligation Margin Adder
• NPRR 142 Emergency Electric Curtailment Plan Media Appeal Change
• NPRR 152 References to Section 22 Attachments
• NPRR154 Corrections of Entities Able to Bid for Point-to-Point Obligations in the Day-Ahead Market
• NPRR 155 Clarification of Authorized Representative
• NPRR 159 Resource Category Start-up Offer Generic Cap for Wind Resources
• NPRR 160 Elimination of the Non-ERCOT Load Serving Entity Fee
• NPRR 162 Change the Sign Convention of Net Real Power Consumption, LPC, and MPC of Load Resources. 

BOARD BRIEFED ON NODAL SCHEDULE, BUDGET DETAILS

ERCOT board members met again on Wednesday following the regular board meeting so that staff could brief them on the nodal budget and schedule details in preparation for a vote on it in February.   Presentations from the meeting are available at this link. 

2008 ENERGY CONSUMPTION UP 1.7 PERCENT

Energy consumed in the ERCOT region in 2008 totaled 312,401 gigawatts, a 1.7 percent increase over 2007, according to the 2008 demand and energy report.  The month of June had the highest increase over 2007 at 11.8 percent, followed by July with 11.3 percent and May with 9.6 percent. 

The report also includes a breakdown of total energy consumed by fuel type: 

The peak hourly demand last year was 62,174 megawatts (MW), recorded on Monday, Aug. 4, in the hour-ending at 5 pm.  This 2008 peak did not top the all-time maximum peak demand of 62,339 MW, recorded on Aug. 17, 2006.