News Release

March 09, 2006

ERCOT at a Glance: News Update - March 9, 2006


Nodal Market Protocols Approved with Changes

The Public Utility Commission Wednesday approved the stakeholder-developed protocols for the Texas Nodal wholesale market redesign but called for additional projects or rulemakings on several issues.  Commissioners expressed an interest in moving forward with the proposed 2009 implementation but asked for additional study, simultaneous with nodal development, regarding:

  • Real-Time Co-optimization
    Directed ERCOT to explore best practices on this issue and report back to the PUC; also stated a need for the stakeholders to agree on a definition of real-time co-optimization
  • Load participation
    Commented on the importance of load response in an energy-only market and proposed opening a separate rulemaking to develop incentives
  • Creating and changing load zones
    Asked for a project to create a mechanism or procedure for creating and changing load zones.

The cooperative tax issue agreed upon by stakeholders will be rolled into the protocols.  Contested issues that the commissioners agreed to dismiss from further review included heat-rate-based offer caps and the municipal contracts issue.

PUC Issues Instructions on ERCOT Fee Case

The commissioners instructed PUC staff to prepare an order for the March 30 open meeting to reduce the ERCOT administration fee from the proposed $.4200 per megawatt-hour to save $858,000 in revenue (this would reduce the fee to an estimated $.4172).  Commissioners said ERCOT management would have the responsibility for adjusting expenditures to find the savings, but specifically requested review of expenses in several areas:

  • New employee relocation
  • Tuition and registration fee reimbursement
  • Corporate events
  • Research consulting services
  • Management/leadership training

Funds budgeted for accelerated debt reduction and the Independent Market Monitor will be redirected to fund additional capital projects.

A project will be opened to further evaluate the methodology behind ERCOT’s compensation structure.  ERCOT employee pay raises for 2006 will be delayed pending completion of the project.

System Planning Begins Wind Generation Assessment Process

ERCOT’s System Planning Group has taken a first step to assess wind generation potential throughout Texas for designation of renewable energy zones. 

Senate Bill 20, signed into law August 2005, requires the Public Utility Commission to designate Competitive Renewable Energy Zones (CREZs) and develop transmission plans to deliver the power from these zones to customers.   ERCOT is working with the PUC to develop the transmission plans and other information necessary for the PUC to make this determination.

The first step was gathering input from wind generation developers and other stakeholders to identify the counties which they believed merited consideration for wind development.  System Planning is now inviting proposals from qualified consultants to assist in the analysis of the potential counties identified by the stakeholders.  ERCOT will work with the selected wind consultant to define the potential CREZs based on consistency of wind patterns, sufficiency of wind generation potential, inclusiveness of most areas from stakeholder input, and similarity of transmission interconnection.  The resulting definitions will be posted for stakeholder comment and issue resolution before the wind consultant proceeds with developing representative wind power output profiles for each potential CREZ. 

A map illustrating the aggregated input received from the stakeholders on counties to be considered for inclusion in competitive renewable energy zones has been posted under the Long Term System Study folder on the Operations and Planning page of the ERCOT Web site.

ERCOT ERO Documents Posted on ERCOT Web Site

ERCOT filings and documents related to transition issues surrounding creation of the electric reliability organization (ERO), as required by the Federal Energy Policy Act of 2005, have been posted on the ERCOT Web site in the News Room under Reports and Presentations.

The postings include:

  •  ERCOT ERO Comments to NERC, Jan. 24, 2006
  • Invitation to Present at NERC Board of Trustees Compliance Committee, January 2006
  • NERC Comments on Readiness Audit of ERCOT Local Control Centers, December 2005
  • NERC Entity Registration Request to Regional Managers, Jan. 13, 2006
  • ERO Transition Presentation to ERCOT Board of Directors, February 2006

The North American Electric Reliability Council (NERC) is reviewing comments received on its second draft application, posted in late January, according to a NERC March 8 news release.  NERC is developing a final draft application, which will be posted this month for review prior to consideration by the NERC Board of Trustees March 28.

NERC is expected to file its ERO application April 4 with the Federal Energy Regulatory Commission (FERC) and government authorities in Canada.  If approved, NERC’s application will result in the formation of an independent, international ERO with the authority to develop and enforce reliability standards for the entire North American bulk electric system.  NERC’s goal is to become certified and begin operation as the ERO by January 1, 2007.

The latest draft of NERC''s ERO application and the comments submitted to date are available on NERC''s Web site.

Vice President of Human Resources Resigns

Vice President of Human Resources and Organization Development Nancy McIntire will be leaving ERCOT March 17, to pursue a new opportunity, CEO Tom Schrader announced Wednesday.  Schrader thanked Nancy for her year of working with ERCOT and her dedication to improve ERCOT’s human resource services to employees.

Schrader Presents ERCOT Update in Dallas

CEO Tom Schrader spoke to some 70 electric industry professionals at the Dallas Electric Club February meeting.  His presentation, “State of the Market & What’s Ahead at ERCOT” included updates on ERCOT, the retail market, congestion management, reserve margin and generation, electricity prices, wholesale market redesign and transmission planning.

ERCOT Meeting Calendar

March 2006

The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to more than 25 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 650+ 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.