News Release

May 21, 2009

ERCOT News: May 20 Board Meeting Highlights

TOPICS:

  • Board Approves Seven Market Rules Changes
  • Renewable Energy Credit Program 2008 Annual Report Filed
  • NERC Summer Reliability Assessment Released

BOARD APPROVES SEVEN MARKET RULES CHANGES

The Board of Directors for the Electric Reliability Council of Texas, grid operator for most of the state, approved seven market rules revisions at Wednesday’s regular board meeting. 

The Protocol Revision Requests (PRR) Nodal Protocol Revision Requests (NPRR), and System Change Request (SCR) approved were:

  • PRR 797: “Removal of Reference to ERCOT Business Processes;” revises the term “Generation Resource Asset Registration Form” to a generic phrase “as registered with ERCOT.”
  • PRR 800: “Qualified Scheduling Entity Day-Ahead Metric;” re-defines the day-ahead metric for both wind-powered generation resources (WGR) and non-WGR qualified scheduling entities to ensure that both categories schedule enough capacity in the day ahead market to meet their planned energy schedules plus ancillary service obligations; removes the WGR exemption established in PRR 777. 
  • NPRR 157: “Extending Black Start Service Bid Timeline;” changes the bids from a one-year period to a two-year period to allow transmission operators and market participants more time to prepare and train their system operators.
  • NPRR 163: “Removal of Late Fee Language;” removes conflicting instructions for late fees.
  • NPRR 166: “Timing for Required Black Start Unit Load Carrying Test;” changes the required black start unit test from once every six years to once every five years; this change matches the North American Electric Reliability Corporation black start unit testing requirement of every five years. 
  • NPRR 167: “Options for Filing Verifiable Costs: Qualified Scheduling Entities or Resources;” verifiable costs are resource-specific costs which are used by ERCOT in various calculations and internal processes; current protocols require verifiable costs to be submitted by qualified scheduling entities, some resource entities are concerned with confidentiality issues, and some QSEs do not want responsibility for accuracy of the resource entity’s data; the change will allow either allows either entity to file verifiable costs.
  • SCR 753: “Transmission Outage Notice Detail Enhancements,” effective upon system implementation; system change to add additional data to ERCOT’s public database of transmission outage detail; proposed to enhance transparency of transmission outages, allowing market participants to better forecast grid conditions and improve operating plans.   

The board discussed a “parking deck” process for managing NPRRs that are not determined as necessary prior to the nodal market launch.  Technical Advisory Committee Chairman Mark Bruce presented a whitepaper on an interim vehicle to manage the items for post go-live consideration.  The board voted to refer the issue to the board’s Special Nodal Program Committee to review and report back to the board next month. 

PERMIAN BASIN RMR AGREEMENT 

ERCOT staff reported on completion of a new Reliability-Must-Run (RMR) contract with Luminant’s Permian Basin Unit 5, which runs through the end of 2009.  Luminant notified ERCOT in February of plans to suspend operations at 15 generation units, totaling approximately 3,900 MW.  ERCOT system operations determined two of the units would be needed to maintain system reliability.  ERCOT is also negotiating an RMR contract with Permian Basin Unit 6.   

The protocols allow ERCOT to enter into a reliability-must-run agreement with generation owners to continue operations to maintain local reliability until the reliability issue is resolved through transmission projects or by new generation added at the location. The board has asked staff to present an exit strategy for the Unit 5 RMR contract at the July board meeting. 

EILS REVIEW 

Vice President of System Planning and Operations Kent Saathoff presented an annual review of the Emergency Interruptible Load Service (EILS).   The report noted that the program has experienced steady growth since the Public Utility Commission eliminated the 500 megawatt (MW) floor and increased the cap on annual costs from $20 million to $50 million.  However, the growth was interrupted following the economic downturn but is now rebounding. 

NODAL UPDATE 

Chief Technology Officer Mike Cleary presented an update on the nodal market implementation progress and risks and reviewed the timeline of major deliverables and testing required before the 2010 launch date.  Ten of the 13 major milestones scheduled for April were completed as required.  The three that were not completed were not on “the critical path” and do not impact the overall schedule and budget, Cleary said.  Fourteen milestones are scheduled for May.  

CARBON STUDY 

Director of System Planning Dan Woodfin gave a presentation on ERCOT’s recent carbon study requested by Public Utility Commission Chairman Barry T. Smitherman. The report, Analysis of Potential Impacts of CO2 Emissions Limits, focused on the near-term impacts of proposed climate change legislation.  Woodfin reviewed several scenarios resulting in an increase in wholesale power costs from $10 billion to $20 billion, depending on the level of natural gas prices.  At $7/MMBtu for natural gas, the annual increase in wholesale power costs was estimated at $10 billion and estimated to increase a typical consumer’s monthly bill (based on 1,000 kilowatt-hour/month usage) by $27.  

Other staff reports included: 

Grid Operations and Planning Report

March 2009 Operations

  • The peak demand of 39,309 MW for the month of March was less than the long-term forecast of 41,539 MW for March.
  • Day-ahead load forecast error for March was 3.24 percent
  • Increased zonal transmission congestion in March was due to significant planned transmission outages.

Planning Activities

  • Tracking 243 active generation interconnect requests totaling over 97,000 MW, down from 262 requests for 105,000 MW in March.
  • 8,135 MW of wind capacity on line as of April 30; up from 8,065 in March. 

Market Operations Report

Retail Activity

  • Retail switching activity continues to be strong.
  • All customer groups show a higher migration away from the native affiliated retail electric provider, compared to last year, with 47 percent of residential customers (load) switched to a competitive retailer.

Wholesale Activity

  • Total market volume (energy) continued down in March. Down balancing energy continues at much higher levels than 2008 – primarily due to wind.  Natural gas prices continue to be at the lowest levels seen in more than five years.
  • Balancing energy price data shows prices in March were at almost half the level that occurred during the same period last year.
  • One new retail electric providers was added and two new qualified scheduling entities; one qualified scheduling entity was terminated.

Advanced Metering Update

  • On target for go-live in November 2009, with project completion scheduled for May 2010.

Market Operations Supplement

Compares January-April 2009 to 2008 for:

  • Total market volume in energy services
  • Natural gas price index
  • Balancing energy services volume and cost
  • Load zone price data (weighted average market clearing price for energy)

Information Technology Report

Financial Summary Report

All board meeting documents are available at this link. 

Renewable Energy Credit Program 2008 Annual Report Filed

The 2008 Annual Report for the Texas Renewable Energy Credit (REC) Program, administered by ERCOT, is now available on the Texas Renewables website. 

There are currently 93 REC generation accounts with an installed capacity of 8301.4 MW and six offset generator accounts representing 297.6 MW of capacity. 

The total energy generated by renewable energy resources tracked by the program for 2008 is 17,192,589 megawatt-hours (MWh), an increase of approximately 70 percent from 2007.  The following table shows total participating renewable generation by technology type for each quarter in 2008, including “offset” generation.  (Since the program is optional for generation entities, some renewable generation in the state may not be registered in the program.) 

Technology Type

Quarter 1

Quarter 2

Quarter 3

Quarter 4

Total MWh

Biomass

21,154

14,019

12,564

23,095

70,833

Hydro

98,510

177,051

78,751

91,116

445,428

Landfill gas

105,217

97,361

88,470

95,558

386,606

Solar

446

862

992

1,038

3,338

Wind

4,030,973

4,737,188

2,639,509

4,878,713

16,286,383

Totals

4,256,300

5,026,481

2,820,287

5,089,520

17,192,589

 

NERC Summer Reliability Assessment Released

The North American Electric Reliability Corporation (NERC) recently released its annual summer reliability assessment.   

Under the ERCOT highlights, the report states more than 3,500 MW of generating capacity was added in the ERCOT region since last summer.  It also notes the impact of the current economic conditions is reflected in the decrease in the peak demand forecast, from last year’s peak projection for 2009 of 66,247 MW to the current projection for 2009 of 64,218 MW.  The report calculates a 15.9 percent deliverable capacity reserve margin for ERCOT. 

[NOTE: Information for the NERC report is submitted in March.  ERCOT’s 2009 summer assessment, to be released at the end of the May, will have updated generation totals and reserve margins.]

The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to more than 26 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 710+ 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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