News Release

    May 21, 2010

    ERCOT NEWS: May Board Meeting Highlights


    Nodal market less than 200 days from launch; All systems go  

    Market trials for the nodal market have been running for 15 weeks, and all systems are “go” for the market launch less than 200 days away, Electric Reliability Council of Texas (ERCOT) executives said at Tuesday’s monthly board of directors meeting. 

    Full-functionality market trials began on schedule May 3, adding settlement processes and credit management, Interim CEO Trip Doggett reported.  ERCOT continues to have strong participation from market participants, averaging approximately 175 energy schedulers participating in the day-ahead market trials. 

    Chief Technology Officer Mike Cleary said there are no major items causing issues for the Dec. 1 go-live date.  Cleary briefed board members on key functionalities achieved in the market trials:

    • Monthly and annual congestion-revenue rights auctions and invoices
    • Real-time markets and financial settlements
    • Day-ahead market
      • Twelve completed; running twice a week currently; moving to three times a week this week
      • Day-ahead market settlements are being completed in conjunction with the day-ahead market
    • Ancillary services
    • Credit module. 

    ERCOT, grid operator and manager of the electric market for most of the state, was charged by the Public Utility Commission of Texas in 2003 to develop a nodal wholesale market design to improve market and operating efficiencies through more minutely detailed pricing and scheduling of energy services.  Funding for the project is provided by a nodal surcharge ($0.375 per megawatt-hour), which is assessed to generation owners until the costs are recovered – anticipated by the end of 2012. 

    Five market rule changes approved

    The board approved five market rules changes (Protocol Revision Requests [PRR]), Nodal Protocol Revision Requests [NPRRs]):

    • PRR 844 / NPRR 205: Transmission and/or Distribution Service Provider Definition Revision
    • NPRR 214: Wind-powered Generation Resource High-Sustained Limit Update Process
    • NPRR 211: Clarify Capacity Obligations of Energy Trades
    • PRR 833: Primary Frequency Response Requirement from Existing Wind-powered Generation Resources 

    In addition, the board voted to return NPRR 208 (Registration and Settlement of Distributed Generation Less Than One MW) to the Technical Advisory Committee for clarification on some language inconsistencies. 

    Also online:

    The board also had a lengthy discussion on transmission planning policy, based on a request from PSEG Texas.  Board members voted to direct the Technical Advisory Committee to review the current policy regarding economic criteria for transmission planning. 

    The Technical Advisory Committee update also included the Texas Renewables Integration Plan Quarterly Report. 

    Other board action included approval of the Market Credit Risk Standard, 

    Favorable audit report highlighted

    In addition to the nodal report, Doggett’s CEO update reported that the Texas Regional Entity audit found ERCOT operations compliant with all ERCOT protocols and operating guides included in the scope of the audit. 

    Another accomplishment noted by Doggett was that ERCOT transmission planning staff worked through the Regional Planning Group process to develop an alternative to a proposed project addressing congestion in the Lamesa area.  The alternative plan is expected to reduce the project cost by $30 million and increase savings due to reduced congestion by $4 million.  

    In the information technology area, Doggett reported that a trademark application was filed for “Macomber Map,” the name given to a visualization tool developed at ERCOT to help system operators integrate multiple data sources and see all data for a single element of the grid across applications and systems.  The Macomber Map provides situational awareness for control room operators, allowing operators to navigate from high- to low-level network model, energy and market data, geographically and temporally.

    Storage technologies reviewed

    John Dumas, manager of supply integration and grid applications, made a presentation on Storage Technologies in the ERCOT Market, which summarized presentations at an April 13 workshop.  Dumas said the duration of deployment appears to be the main technical barrier for storage resources since energy storage is typically limited to 15 minutes.  Current qualifications for ancillary services require the service to be fully deployable for an hour.  Also system modifications would be needed to manage regulation deployments and state of charge.

    Economic barriers include load fees and transmission delivery charges in addition to issues related to load payments based on a weighted-zonal average price rather than the locational marginal price at a node. 

    Staff reports

    Other staff reports included: 

    Market Operations Report; Market Operations Report - Supplement

    • Energy Services – Monthly energy volumes for March are comparable to last year, but year-to-date volumes are up significantly in 2010 compared to 2009 due to colder weather.  In addition, natural gas prices are up from the same period last year.
    • Capacity Services – Capacity service costs are up from a year ago – market-clearing prices are higher; procured a higher volume of non-spin reserves due to changes in ancillary services procurement methodology late last year.  In addition, the percent procured for regulation-down services is significantly more in 2010 than 2009 due to increased wind. 
    • Balancing Energy Price Data – Price by zone is up from same period last year but somewhat down from the first months in 2010.
    • Congestion Management – Local congestion (volumes and costs) are down from the same period last year.
    • Three new retail electric provider added and one terminated; two new qualified scheduling entities added and three terminated. 

    Grid Operations and Planning Report

    • Peak demand for April was 40,174 megawatts (MW), less than the April 2009 peak demand of 43,448 MW;
    • ERCOT System Planning is tracking 217 active generation interconnect requests totaling more than 72,000 MW as of April 30, 2010, down slightly from last month;
    • Wind capacity remains at 9,117 MW;  no increase since February;
    • Several transmission projects and remedial action plans have been developed as alternatives to the Spencer 5 reliability-must-run contract. 

    May 2010 Load Forecast and Reserve Margin Update

    (See also May 12 news release “ERCOT Expects Adequate Power Supplies for Summer”) 

    Information Technology Report

    • Site failover tests were completed successfully for several nodal systems.  Site failover capability is a key part of ensuring high availability and reliability and is a requirement of operational readiness. 

    2010 to 2014 ERCOT Strategic Plan

    Includes nine strategic objectives supported by prioritized initiatives:

    • Manage the grid in a manner that maintains a high level of reliability.
    • Effectively manage the evolution of the wholesale and retail markets to meet the changing business environment.
    • Manage the interrelationships and dependencies between reliability actions and market impacts.
    • Manage the deployment and stabilization of the nodal market which will more efficiently direct-assign local transmission congestion costs, provide better price signals for locating generation and transmission, and develop a day-ahead market.
    • Meet the increasingly demanding and complex requirements for compliance with Federal Reliability Standards and cyber and physical security requirements while ensuring ERCOT ISO’s compliance with ERCOT Protocols and Operating Guides.
    • Manage the complex systems, infrastructure and development processes to enhance and operate the grid and markets.
    • Develop and maintain productive external relationships through proactive, effective and comprehensive communications.
    • Attract and retain the right people with the right skills in the right position to develop a culture of excellence that empowers, incents, recognizes and celebrates our achievements.
    • Prudently ensure adequate funding for the provision of resources needed to pursue and achieve ERCOT’s objectives. 

    All board meeting documents are available online at this link.  Live and archived broadcasts of all board meetings are available at this link.  Agendas and documents for ERCOT stakeholder meetings can be found via the ERCOT calendar. 

    Special meeting of board, governance committee called for May 27

    A special joint nominating committee and board meeting will convene at 3 p.m. on Thursday, May 27, at ERCOT. It will be preceded by a special called meeting of the human resources and governance committee at 2:30 p.m.   Agendas for both meetings include no items other than an executive session. 

    Legislative presentations available on line

    Interim CEO Trip Doggett and Chief Technology Officer Mike Cleary made presentations at the May 12 hearing of the House Committee on State Affairs.  Doggett also made a presentation at the April 29 joint hearing of the House Committee on State Affairs and House Committee on Energy Resources.  The presentations are available on ERCOT’s website in News/Reports and Presentations section (under Legislative Reports):

    Long-Term Study Task Force formed

      The Long-Term Study Task Force provides the primary forum for discussion between representatives of appropriate state agencies, non-governmental organizations, policy-makers, other planning stakeholders, and ERCOT regarding issues affecting long-range power system planning in the ERCOT region and specific inputs, results and feedback on long-term planning studies.  To subscribe to the task force’s email distribution list or find meeting dates and details and contact information see Long-Term Study Task Force webpage.

      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 600+ generation units. It also performs financial settlement for the competitive wholesale bulk-power market and administers retail switching for 7 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.