News Release
November 20, 2012

Winter power plant assessment under way, CREZ development on track for 2013 completion

AUSTIN, TX, Nov.  20, 2012 -- The Electric Reliability Council of Texas (ERCOT), grid operator for most of Texas, is evaluating how well the power plants that serve the region are prepared for winter weather extremes.

During a report at its Nov. 13 meeting, the ERCOT Board of Directors learned that ERCOT has requested information from all generators about winter preparation and operation plans and has begun visits to 40 sites to ensure those entities have completed previous weatherization recommendations.

"We developed a checklist of best practices for winterization, based on lessons learned during the February 2011 weather event, and we are using those checklists and interviewing field personnel," said ERCOT CEO Trip Doggett.

Doggett noted that it is the responsibility of generators to ensure proper winter preparedness. However, ERCOT and the Public Utility Commission of Texas (PUC) are working to track those efforts and report results to the Texas Legislature. Additionally, the Federal Energy Regulatory Commission recently hosted a workshop at ERCOT’s Austin offices to discuss actions taken by ERCOT and its market participants to improve winter preparations since February 2011.

Among other criteria, ERCOT has determined that 47 units serving the region can generate power using either natural gas or fuel oil, although the generation capacity could be reduced using the alternate fuel.

The ERCOT board also received an update on the Competitive Renewable Energy Zones (CREZ) projects. By 2014, ERCOT anticipates about 2,400 miles of new high-voltage transmission facilities will be ready to move wind power from West Texas to more populated regions of the grid.

CREZ was a result of Senate Bill 20, which was passed by the Texas Legislature in 2005. The law set targets for renewable energy development and the necessary infrastructure to move it to other parts of the state. Of 101 total projects under the CREZ umbrella, 25 are scheduled for completion by the end of 2012. Of the other 76 projects, 52 should be completed by the end of summer 2013 and the remainder by the end of 2013.

ERCOT Director of Grid Coordination Woody Rickerson indicated increased construction-related outages have contributed to transmission congestion in the West Texas region during 2012, and outages likely will increase in the coming year as the projects draw closer to completion. ERCOT staff continues to coordinate outages with project developers to minimize impacts to the grid.

The ERCOT board also approved a pilot that will enable resources to provide up to 65 megawatts (MW) of fast-responding regulation services (FRRS) each hour to help maintain system frequency on the ERCOT grid at the target 60 Hz range. ERCOT staff estimates that the pilot project, scheduled to run from Jan. 19, 2013, through July 19, 2013, will cost about $3.4 million.

The six-month pilot, to begin in January, will enable ERCOT to test the integration of fast-responding resources, including instantaneous response from new energy storage facilities in West Texas, for frequency control purposes. Staff will provide an update to the Board after the first three months of the pilot and will update working groups monthly.

The board accepted results of the recent Service Organization Control Audit from the ERCOT Finance and Audit Committee. ERCOT’s independent service auditor, BrightlLine, provided the report on ERCOT’s settlement processes and systems.

"This is a critical annual check on the settlement systems that handle the multiple millions of dollars of transactions that pass through ERCOT on a daily basis," said ERCOT Board Chair Craven Crowell. "The 2012 audit report found that ERCOT’s internal controls are properly designed and that its settlement systems are working effectively — a clean bill of health for this critical function of this organization.

Following executive session, the board also voted to approve CEO Trip Doggett’s participation as an advisory director for the Center for the Commercialization of Electric Technologies.

Other November board meeting updates

Chief Executive Operator Report

ERCOT CEO Trip Doggett provided several updates, which included:

  • A loss-of-load probability study will be available for review by the Generation Advisory Task Force by January 2013. The report has been delayed to ensure accuracy of wind generation forecasts and will not be used in development of the next Capacity, Demand and Response (CDR) Report, which is due out Dec. 10, 2012.
  • Four ERCOT engineers — Sarma Nuthalapat, Resmi Surendran, Diran Obadina and John Adams — led and supported development of the new "Independent System Operators in Unregulated Power Utilities" section in the McGraw Hill Handbook for Electric Engineers.
  • An Oct. 24 hearing of the Texas House State Affairs Committee included resource adequacy updates from ERCOT, the PUC, the Brattle Group and several stakeholders.
  • ERCOT is working to automate some posting Congestion Revenue Rights auction results.

Independent Market Monitor (IMM) Report

In addition to his regular monthly update on electric prices, energy use, heat rate, congestion costs, ancillary services procurement and wind production, Dan Jones from Potomac Economics presented a report comparing market statistics related to the impacts of summer 2011 and summer 2012. Among other comparisons, Jones noted that wholesale prices in 2011 were at the system-wide offer cap for 28.44 hours, compared to 1.51 hours in 2012. 

Technical Advisory Committee (TAC) recommendations

The board approved eight Nodal Protocol Revision Requests (NPRRs) on consent. The board also sent Planning Guide Revision Request 18: Clarify the Prerequisites for Adding a New Generation Resource to the Planning Models and Capacity Demand and Reserves (CDR) Report, back to the TAC to ensure language related to financial security accomplishes the desired result. NPRR 466 also returned to TAC for language review. 

The next meeting of the ERCOT Board of Directors is scheduled for Tuesday, Dec. 11, in Austin.

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The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to 24 million Texas customers -- representing 85 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 41,500 miles of transmission lines and 550 generation units. ERCOT also performs financial settlement for the competitive wholesale bulk-power market and administers retail switching for 6.7 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. ERCOT's members include consumers, cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities (transmission and distribution providers), and municipal-owned electric utilities.

Contact
Robbie Searcy (512) 225-7213
rsearcy@ercot.com