News Release

October 22, 2008

ERCOT News - ERCOT Board Approves 2009 Congestion Zones

The Board of Directors approved the 2009 transmission congestion zones and changes to ancillary services procurement methodology during Tuesday’s monthly meeting.   

After consideration of an appeal by AEP, the board approved the congestion zones, commercially significant constraints (CSC), and closely related elements (CRE), as recommended by the Technical Advisory Committee (TAC), effectively denying AEP’s appeal of TAC’s recommendation.  The board is required by ERCOT Protocols to review the CSCs, CREs and congestion zone designations each year. 

The board also approved changes to ERCOT’s ancillary services methodology to account for increases in wind generation.  Effective Nov. 1, ERCOT will purchase reserves based on accuracy of wind and load forecasts, rather than a flat 1,354-megawatt procurement, historically based on the size of the largest generation unit in ERCOT.   

Also, the increase in installed wind capacity will be taken into account when determining upcoming reserve requirements.  The current installed wind capacity in the ERCOT region is 6,023 MW and expected to be more than 8,000 MW by the end of 2008 and around 8,500 MW in 2009. 

PROTOCOL REVISIONS APPROVED

The board approved six Protocol Revision Requests (PRR) and nodal PRRs (NPRR):

  • PRR 765 – Time of Use Revisions
  • NPRR 102 – Implementation of PUC Subst. R. 25.505(f), Publication of Resource and Load Information
  • NPRR 113 – Load Resource Type Indicator for Ancillary Service (AS) Trades and Self-Arranged AS
  • NPRR 124 – Resource Node Updated Definitions
  • NPRR 129 – Synchronization of Zonal Protocols
  • NPRR 144 – Five Reliability-Unit-Commitment Deployments Needed Before Requiring Verifiable Costs.  

In addition, the board remanded one protocol revision request back to the Technical Advisory Committee for further study.  PRR 769 would remove the required energy conservation appeal from the emergency procedures and allow ERCOT management to issue an appeal for energy conservation at management’s discretion, without requiring CEO authorization.   

The board also approved a process for making price adjustments as required by PRR 772 – Description of MCPE Cap and Shadow Price Cap Methodology.   

Other votes during the meeting included approval, with some minor changes, of:

The Finance and Audit Committee did not ask for a vote on the Market Participant Guarantee Agreements, saying that they were requesting additional information from the Credit Working Group regarding justification for changes made to the original proposal from ERCOT staff.

STAFF REPORTS

Chief Financial Officer Steve Byone discussed the effect of the current financial crisis on ERCOT’s investments in two funds managed by The Reserve.  ERCOT has requested all its investments from The Reserve, including $48 million in the Primary Fund and $148 million in the U.S. Government Fund.  All new investments are restricted to funds which invest in U.S. Treasury or Treasury-backed securities.  The presentation also included information on purpose, management and oversight of ERCOT investing activity. 

Other staff reports included:

Grid Operations Report

  • The peak demand of 62,174 MW on Aug. 4 was below the all-time peak of 62,339 MW in August 2006 and the forecast 2008 peak of 63,702 MW.
  • Day-ahead load forecast error for June was 3.65 percent, higher than usual due to unusual weather in August, including several tropical storms.
  • Zonal congestion was reduced from previous months, probably resulting from board actions in June.
  • Termination agreements for all three reliability-must-run units were effective Sept. 30  

Market Operations Report

  • Continued increase in small-nonresidential switching activity
  • Energy Services continued to show higher use of balancing services in 2008 compared to 2007.
  • Summary Balancing Energy Price Data and Total Load Data – West prices in August were up significantly due to high prices in certain intervals where balancing-energy-up as a percent of load was significantly higher than average.
  • Added two new Retail Electric Providers
  • Added ten new Qualified Scheduling Entities  

System Planning Report

  • ERCOT is currently tracking 253 active generation interconnect requests totaling more than 108,000 MW; includes 53,000 MW of wind generation.
  • 152 MW of new wind generation began commercial operations, bringing total installed wind capacity to 6,023 MW.
  • One 249 MW wind project was cancelled* and two projects totaling 236 MW were delayed beyond 2010.
  • Regional Planning is reviewing proposed transmission improvements with a total cost of $549 million.
  • Transmission projects approved in 2008 to date total $256 million.  

Nodal Update

  • Overall program status remains “red,” driven by schedule and budget indicators which are on hold until completion of an updated cost-benefit analysis, as directed by the Public Utility Commission.
  • Multiple vendors met and agreed on “freezing” the schema for the Common Information Model, establishing a common format for all the elements, attributes, associations, and vendor-specific extensions required to define the network model data.  

Information Technology Board Report

  • Retail and Wholesale Systems Performance
  • Market and Grid Control Systems Performance 
  • Nodal Systems Performance

* CORRECTION: The 249-MW project was removed from the interconnection queue, however  the project itself was not cancelled.  It was merged with another wind project and is now in service and included in the 6,023 MW total.

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.

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