Market Information System Grid and Market Conditions

News Release

October 07, 2005

ERCOT at a Glance: News Update - October 7, 2005

ERCOT Temporarily Connects to Neighboring Grid to Assist in Hurricane Recovery Efforts

ERCOT last week helped to enable temporary limited power transfers to neighboring utilities in southeast Texas struggling to restore service after being hard hit by Hurricane Rita.

The ERCOT grid is one of three national interconnections and is usually not connected to the neighboring grid to the east. However, a procedure is provided in the ERCOT Protocols to allow a temporary block-load transfer for emergency situations in a manner that assures reliable operations and accurate financial settlement.

ERCOT worked with the Public Utility Commission (PUC), transmission operators and the affected utilities in the adjacent region on two transfer requests. On the northeast side of Houston, a 138-kV tie point was connected, allowing CenterPoint Energy to deliver electricity to the Entergy Gulf States service area to restore power to the Lake Livingston pumping stations, essential to the Houston water system. Entergy serves a large area of southeast Texas and borders the eastern edge of the ERCOT Region north of Houston and Beaumont.

A second block-load transfer was enabled by restoring and re-energizing a 138-kV Huntington- Etoile transmission line between TXU Electric Delivery and the Deep East Texas Electric Cooperative. Deep East Texas serves all or part of eight counties, four of which border Louisiana along the Sabine River.

ERCOT will monitor restoration efforts related to each block-load transfer point to limit its use to the emergency. The transfers will be discontinued as soon as power is restored in the neighboring region.

Operators Score High 90''s on Operations Audit

ERCOT operators scored 96 percent on an operations audit conducted last month, Director of Compliance Larry Grimm reported at the September board meeting. Of 251 items assessed, the review found only 10 items of non-compliance, all low risk except for one of moderate risk.

Chief System Operator James Hinson said this was a significant improvement over the 87 percent score in 2003 and the scores in the 60’s range two years ago. “We have 54 operators, and every single one of them works really hard,� Hinson said. “This is a very big achievement, and we need to give them all a pat on the back.�

ERCOT Files 2006 Fee Application Keeping Current Rate

ERCOT filed its application for approval of the ERCOT system administration fee for 2006 with the Public Utility Commission (PUC) Oct. 3. The application proposes maintaining the existing fee amount of $.42 per megawatt-hour. ERCOT has posted a copy of its fee and rate application on the ERCOT Web site under Legal Notices. Persons who wish to intervene in or comment in this proceeding should notify the PUC by Nov. 3, 2005.

The ERCOT Board of Directors voted in the September meeting to approve the $0.42/MWh fee request. The board also approved the proposed 2006 budget of $144.4 million in total spending, consisting of a base budget of $140 million and $4.4 million for market monitoring and potential additional debt reduction. The proposed budget does not include funding for wholesale market redesign, currently the subject of a PUC-contested case.

The ERCOT system administration fee is assessed on wholesale energy transactions in the ERCOT market and, therefore, embedded in the overall cost of all electric energy. If the costs were passed straight through to the consumer, the fee would translate to about $.42 per month for the average residential customer.

TAC To Discuss Nodal Transition Plan Oct. 11

The Technical Advisory Committee (TAC) has scheduled a special meeting for Tuesday, Oct. 11, to work with ERCOT to develop a nodal transition plan for presentation at the Oct. 18 board meeting.

The board voted in its September meeting to approve the filing of the draft protocols for the wholesale market redesign. The resolution noted that the action was not an endorsement of the final nodal market design or draft protocols, but fulfilled a directive to ERCOT to file the protocols as established in the PUC rule (PUCT Subst. R. 25.501).

With the completion of the Texas Nodal Team’s directive, Bill Bojorquez, director of transmission services and TNT facilitator, reported a summary of statistics regarding the TNT process:

  • 40 general sessions
  • 224 meetings
  • 211 votes taken
  • 566 pages of protocols
  • 13,200 person-days of meetings.

Andrew Dalton Chosen For Industrial Consumer Board Seat

Andrew Dalton of Valero will join the ERCOT Board of Directors filling the industrial consumer position, formerly held by Tom Payton who recently resigned.

Steve Byone Named Chief Financial Officer

Steve Byone has been named vice president and chief financial officer for ERCOT, CEO Tom Steve ByoneSchrader announced. Byone came to ERCOT earlier in the year in a consulting role to develop ERCOT’s Internal Control Management and Enterprise Risk Management programs, most recently serving as acting vice president of finance.

Mr. Byone has over 25 years of experience in financial aspects of the energy and electric industry. Before coming to ERCOT, he was vice president and chief risk officer at Progress Energy. His experience also includes financial, risk and commercial responsibilities for Mirant’s European business (1996- 2002) and at Enron (1980-1996). Mr. Byone holds a master’s degree in business with a specialty in finance, and he is a CPA.

Roy Bowman, who previously served as interim CFO, will continue under contract for an additional few weeks to complete several projects and assist in the transition. “Roy has earned our gratitude for his guidance and invaluable contributions to ERCOT during a challenging time,� Schrader said.

Correction

The 2001 peak reported in the Sept. 7 ERCOT AT A GLANCE was incorrectly stated, and the 2005 peak has changed slightly due to adjustments related to settlement data. The correct peak history is:

1999: 54,849 MW
2000: 57,606 MW
2001: 54,862 MW
2002: 56,248 MW
2003: 60,095 MW, occurred Aug 7
2004: 58,531 MW, occurred Aug 3 (after true-up settlement)
2005: 60,272 MW, occurred Aug 23 (according to settlement data)

ERCOT Meeting Calendar

October 2005

The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to more than 26 million Texas customers -- representing about 90 percent of the state’s electric load. As the independent system operator for the region, ERCOT schedules power on an electric grid that connects more than 46,500 miles of transmission lines and 710+ generation units. It also performs financial settlement for the competitive wholesale bulk-power market and administers retail switching for nearly 8 million premises in competitive choice areas.

ERCOT is a membership-based 501(c)(4) nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature. Its members include consumers, cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities, transmission and distribution providers and municipally owned electric utilities.

Contact

media@ercot.com

512-275-7432