News Release

September 20, 2006

ERCOT at a Glance: News Update - Sept. 20, 2006


ERCOT Proposes Emergency Interruptible Load Program

ERCOT staff has asked the Public Utility Commission for fast-track authorization of an emergency interruptible load program to avoid power supply challenges anticipated as early as spring 2007.  The reserve margin, or amount of generation available in excess of the peak load forecast, is currently projected to be near or below the minimum levels in 2007 and 2008.

ERCOT presented the proposal at a PUC demand-response workshop last week, the first of three workshops being led by the PUC staff to evaluate demand response in the region and to identify promising programs that could be considered by the commission for further actions (Project #32853).

As outlined by ERCOT staff, emergency interruptible load response would provide an additional reliability tool for system operators to call on during abnormal events, primarily weather related, such as the extreme cold weather in February 2003 or the unusually high temperatures in April when 20 percent of capacity was offline for seasonal maintenance.  The emergency loads would be called upon to curtail their usage after the existing Loads Acting as a Resource (LaaR) were instructed to curtail, but before ERCOT instructs transmission operators to initiate involuntary firm load shedding (rotating outages).

Potential program participants would be large commercial and industrial accounts, government and municipal facilities, retail chains and others who would agree to have their power interrupted for a performance-based payment.

Commission staff will be evaluating load participation in both the current zonal market and the upcoming nodal market and will make recommendations to the commission.  The additional workshops are planned for Oct. 2 and 3.

Board Meeting Highlights

In Tuesday''s meeting, the ERCOT Board of Directors approved an appeal of a protocol revision request regarding under-scheduled charges relating to replacement reserve service, which had been rejected by the Technical Advisory Committee.  Constellation NewEnergy filed an appeal with the board after TAC rejected PRR 674 and approved PRR 676, a replacement reserve service solution with a type of procurement and cost allocation similar to that in the nodal market.

After a lengthy discussion, the board voted to approve both PRR 674 and PRR 676, including a clause to end PRR 674 by February 1, 2007, or when PRR676 is implemented, whichever comes first.

Nodal Implementation Timeline

CIO and Nodal Executive Sponsor Ron Hinsley presented a proposed timeline for implementation of the Texas Nodal Market in compliance with the PUC rule (Project #28500).  The Technical Advisory Committee and the nodal Transition Plan Task Force have approved a three-phased implementation timeline:

  • Release 1, March 31, 2008 – Single-entry model; implements a common information model; zonal and nodal market running simultaneously
  • Release 2, December 1, 2008 – Real-time operations; locational marginal pricing; real-time congestion revenue rights; zonal market stops
  • Release 3, December 8, 2008 – Day-ahead market and full congestion revenue rights market; physical shutdown of zonal market completed.

The board agreed to vote on the timeline next month in conjunction with an anticipated vote on the nodal implementation budget.  Hinsley reported that the nodal budget work has not been completed and that it needs to be reviewed with the nodal task force.

2007 Budget Meetings

The board''s Finance and Audit Committee announced its schedule for review of ERCOT''s 2007 budget.  ERCOT plans to host an open meeting for public input on Tuesday, September 26, at ERCOT''s Austin facility.  (Additional details will be posted on the ERCOT Web site calendar later this week.)  The Finance and Audit Committee will meet on October 5 and 25 to review the budget and form a recommendation to present to the board for approval at the November board meeting.

The committee chair Clifton Karnei said the plans are to keep the system administration fee at the current level, $.4171 per megawatt-hour, for the 2007 budget.  The system administration fee, which is approved by the Public Utility Commission, represents approximately 98 percent of ERCOT''s total revenue and is assessed on wholesale energy transactions.  The fee is not itemized on residential bills, but if the retail electric provider passes the cost to the end-use customer, it would be approximately 42 cents/month or $5/year (based on a 1,000 kilowatt-hour usage).

System Planning Report Shows 40,753 MW Under Review

New generation interconnection requests for 2,258 megawatts were received by ERCOT System Planning in August, bringing the total active requests under review to 40,753 MW of potential capacity, according to the System Planning division monthly report.

Additional highlights in the report included:

  • Atkins Reliability-Must-Run Exit Strategy Underway.  Construction of the transmission improvements necessary to exit the Atkins RMR contract are to be completed by October 31.
  • CREZ Long-Term System Study Progressing.  ERCOT staff continues modeling and evaluation of possible transmission upgrades related to potential Competitive Renewable Energy Zones (CREZs) and development of a Long-Term System Assessment pursuant to new requirements under Senate Bill 20.
  • Developing Methodologies to Comply with System Adequacy Rule.  ERCOT staff is developing a plan to implement new requirements of the new resource adequacy rules, particularly for monthly projection of transmission constraints as required in the Projected Assessment of System Adequacy rule.
  • Load Forecast Methodology Reviewed.  ERCOT staff completed a simulation to determine what the forecast would have been if the actual 2006 temperatures had been used in preparing the 2006 forecast.  Results validated the model utilized.

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.