News Release

November 15, 2006

ERCOT at a Glance: News Update - November 15, 2006


Board Meeting Hightlights

2007 Budget Approved

ERCOT Board of Directors approved the 2007 budget at Tuesday''s monthly meeting.  The approved budget incorporates a temporary funding ratio of 27 percent revenue and 73 percent debt.  The board directed management to return to the standard target ratio of 40 percent revenue and 60 percent debt by year-end 2008.

The 2007 budget retains the system administration fee at the current approved level of $.4171 per megawatt-hour and includes $120.1 million for base operations, $44 million for projects and $1.65 million for market monitoring.  The temporary modification to the target debt-funding ratio was approved to accommodate the acceleration of multiple critical-path projects supporting both the current zonal market and the nodal market redesign, scheduled for December 2008 implementation.

The system administration fee, which represents over 98 percent of ERCOT''s total revenue requirement, is assessed on wholesale energy transactions.  It does not appear on residential bills, but if it were passed directly through to end-use customers, it would average about 42 cents/month or $5/year, based on 1,000 kilowatt-hour usage/month.

Emergency Curtailment Plan Revised

The board also approved Protocol Revision Request 682 which revises the Emergency Electric Curtailment Plan (EECP) to allow earlier communication of reliability concerns by ERCOT system operations to market participants.

The Reliability and Operations Subcommittee recommended changes to the EECP following implementation of rotating outages for the first time in 17 years last April.  The EECP revisions change how operating reserves are monitored and base emergency notices on a discounted value.

In addition, the previous plan''s four steps were reduced to three by incorporating the media appeal for public conservation within step 2.  (The PRR specifies that ERCOT management may decide to issue the appeal before step 2, based on an evaluation of existing and expected system conditions, but makes the appeal mandatory in step 2.)

The EECP revisions, effective December 1, include:

Step 1 – To maintain 2300 megawatts (MW) of Physical Responsive Capability (PRC):

  • Use generation available from asynchronous connections to neighboring grids (DC ties).
  • Dispatch uncommitted units.

Step 2 – To maintain 1750 MW of PRC:

  • Deploy all responsive reserves, including 1150 MW of interruptible load (large industrial customers who have contracted to voluntarily have their service interrupted).
  • Implement block-load transfers of load to neighboring grids.
  • If not already in effect, issue public appeal through the media for voluntary load reduction.

Step 3 – To maintain system frequency at 59.8 hertz or greater:

  • Instruct transmission operators to shed firm load via rotating outages in blocks of 100 MW to prevent a region-wide uncontrolled blackout.
Renewable Energy Zones Study Update Presented

Director of System Planning Bill Bojorquez made a presentation on the progress of the Competitive Renewable Energy Zones (CREZ) study.  The CREZ study was initiated in response to Senate Bill 20, signed into law August 2005, requiring the Public Utility Commission (PUC) to designate CREZ zones and develop transmission plans to deliver the power from these zones to the customers.

Working with a leading wind consultant, ERCOT staff and stakeholders have identified 25 areas throughout Texas with the best wind resource potential.  Transmission upgrades needed have been grouped into four general clusters: 1) Coastal, 2) McCamey area, 3) Abilene area, and 4) Panhandle.

ERCOT staff is performing additional analysis based on comments from the Regional Planning Group meetings and from stakeholder comments received through November 6.  ERCOT staff expects to file a detailed report with the PUC in early December.

Other board action at Tuesday''s meeting included approval of:

  • Texas Regional Entity delegation agreement and bylaw changes
  • 2007 ancillary services requirements
  • Closely Related Elements
  • PRR673 – Modifies the performance charge scale factor
  • PRR675 – Allows Qualified Scheduling Entities to submit a ramp rate curve to ERCOT that would be used to calculate an equivalent ramp rate for clearing the balancing energy service market.

Chief Information Officer Ron Hinsley presented a nodal market redesign status report and proposed budget.  ERCOT staff will begin preparing a fee filing to submit to the PUC in January.

The complete board meeting agenda and related documents are available on the ERCOT Web site.

Retail Market Tops 3 Million completed Switches

On November 1, ERCOT reached 3 million completed switches since the opening of the retail market.  In addition, over 10.1 million move-in''s and 5.8 million move-out''s have been completed as of November 1.

The percent of load migrated from the incumbent retail provider, as of October 1, is 44 percent for residential customers, 85 percent of small non-residential and 73 percent of large non-residential.

Annual Membership Meeting Scheduled December 12; Former Rep. Wolens Keynote Speaker

Dallas lawyer Steve Wolens, former Texas state representative and chief sponsor of the 1999 retail electric deregulation bill (Senate Bill 7), is scheduled to speak at ERCOT''s thirty-sixth annual membership meeting, 11 a.m. - 1 p.m., Dec. 12, at the Hilton Austin Airport Hotel, 9515 New Airport Drive, Austin.  The annual meeting will also include votes to approve the 2007 Board of Directors and Technical Advisory Committee.  Invitations will be sent to ERCOT members in the next few weeks.  For more information, contact Tisa Weston,

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.