News Release

    October 25, 2010

    ERCOT NEWS: October Board Meeting Highlights

    TOPICS:

    Board approves nodal contingency funds for post go-live

    The Board of Directors for the Electric Reliability Council of Texas, grid operator and manager of the electric market for most of the state, voted last week to use a portion of the nodal contingency fund for market stabilization expenses – avoiding the need for a fee increase in 2011. 

    ERCOT filed a request today with the Public Utility Commission seeking approval to use $25.2 million of the remaining nodal budget funds for nodal expenses occurring after the Dec. 1 go-live date

    The nodal market implementation is funded by a temporary nodal surcharge established by the commission to support the nodal budget.  The budget, which was revised in 2009 to $644 million, included $58.6 million in a contingency fund to be used only with the board’s authorization.  None of the board’s discretionary fund has been used to date, and the fund has increased to $117.7 million as the nodal program monthly under-runs have been added to it. 

    The $25.2 million includes $13.3 million for one-time nodal project charges expected in 2011, such as systems stabilization, and $11.9 million is for recurring annual charges, such as hardware and software licensing and maintenance.  These will be added to ERCOT’s base operating costs starting in 2012. 

    Directing the $25.2 million to post go-live expenses is expected to extend the collection period of the nodal surcharge by approximately three months, from approximately January 2013 to March 2013. 

    “Using the board’s discretionary fund for post go-live expenses will enable ERCOT to effectively manage the transition to the nodal market in 2011 without seeking increases in either the nodal surcharge or the ERCOT system administration fee,” Controller Mike Petterson said.   

    Without use of the board discretionary fund, the 2011 preliminary budget schedules suggest an increase of $0.05 per megawatt-hour (MWh) in the system administration fee would be needed. 

    The system administration fee, which is assessed on wholesale energy transactions, has been set at $0.4171 per MWh for the last six years (approximately $0.42 per month, based on a 1,000-kilowatt-hour/month bill).  The nodal surcharge, which is assessed to generation owners, is $0.375 per MWh and will be discontinued when costs for the nodal market implementation are recovered. 

    The board is scheduled to vote on the 2011 budget in November. 

    See related news release: ERCOT Board Certifies Full Nodal Systems Ready for Go-Live. 

    Credit parameters, market rule changes approved

    In other action, the board established the credit requirements for congestion revenue rights auction, setting the obligation margin adder at $0.75 and the multiplier at zero, as recommended by the Technical Advisory Committee.   

    The board also approved 14 nodal protocol revisions (NPRRs), and one Nodal Operating Guide revision request (NOGRR):

    • NPRR 219: Resolution of Alignment Items A33, A92, A106, and A150 – TSPs Must Submit Outages for Resource-Owned Equipment and Clarification of Changes in Status of Transmission Element Postings
    • NPRR 244: Clarification of Other Binding Documents
    • NPRR 246: Requirement for Resource Entities to Update Resource Parameters
    • NPRR 253: Congestion Revenue Right Balancing Account Invoice and Settlement and Billing Dispute Process
    • NPRR 255: Resolution of Alignment Item A81 – Daily Reliability Unit Commitment Timing and Execution when Day-Ahead Market is Delayed or Aborted
    • NPRR 259: Resolution of Alignment Items A175 and A176 – Settlement of Generation Resources Dispatched to Meet System Reliability Requirements
    • NPRR 261: Revision of Data Submission Timeline for Network Model
    • NPRR 262: Protocol Synchronization for Nodal Implementation Surcharge
    • NPRR 263: Resolution of Alignment Item A99 – Settlement Point Price Calculation When Busses are De-energized.
    • NPRR 273: Allow Use of the ONTEST Resource Status to Indicate Resource Start-up, Shut-down, and Test Operations
    • NPRR 274: Generic Start-up Costs for Combined Cycle Generation Resources Removal of Temporal Constraint
    • NPRR 279: Resolution of Alignment Item A144 – Clarify Posting of Market Clearing Price Capacity for DAM and Supplemental Ancillary Services Market
    • NPRR 280: Move Shift Factor Posting Requirement to Real-Time
    • NPRR 284: Cost Allocation Zones as They Relate to Non-Opt-In Entity Load Zones – As Built Systems.
    • NOGRR 050: Resolution of Reporting Issues Related to NPRR 219  

    Also online:

    CEO reports favorable year-end budget anticipated

    In his monthly update, CEO Trip Doggett said the year-end budget is projected to have an $11 million favorable variance, up from 10.6 million last month.    

    The unusually hot August and warmer-than-normal September were reflected in energy usage above forecast and in comparison to last year.  Actual energy usage year-to-date for the ERCOT region through September is 249,361,862 megawatt-hours (MWh).   

    Description

    August

    September

    2010 Energy Usage, MWh

    35,774,779

    28,844,062

    Forecasted Energy, MWh

    32,794,537

    25,615,629

    Difference (forecast)

    9.1%

    12.6%

    2009 Energy, MWh

    33,451,890

    26,273,161

    Increase (from 2009 to 2010)

    6.9%

    9.8%

    Source: ERCOT Monthly Demand and Energy Report, October 11, 2010. 

    Market, grid and IT reports presented

    Highlights from the Market Operations Report include:

    • Significantly lower retail switching activity in August/September 2010 as compared to the same period in 2009 (higher numbers in August/September 2009 were due to the new expedited switch rule that allowed more switches to be completed within the reporting month);
    • August wholesale energy volumes were up 7 percent in 2010 compared to 2009; also reflected in the new ERCOT-wide peak demand records set in August 2010;
    • Load zone prices for balancing energy increased in August due to higher load volumes;
    • Local congestion (volumes and costs) are down significantly from the same period last year;
    • Two new retail electric providers and five new energy schedulers have been added. 

    Highlights from the Grid Operations and Planning Report include:

    • ERCOT is currently tracking 188 active generation interconnection requests totaling more than 65,000 MW; includes almost 39,000 MW of wind generation;
    • Proposed transmission improvements under review total $80.8 million;
    • Transmission projects endorsed in 2010 total $230.4 million;
    • All projects in engineering, routing, licensing and construction total $9.4 billion. 

    Quarterly Update on PRR 763 (Wind Power Forecasts)

    • Concludes that protocol changes have reduced the tendency to under-forecast the wind output and improved accuracy of the wind forecasts. 

    Other staff reports included the Information Technology and Facilities Report and the

    Risk Management Event Profile Matrix.

    Also online:

    Nodal workshop for retail providers Nov. 9 in Austin

    ERCOT is hosting an additional nodal market workshop for retail electric providers on Nov. 9 in Austin.  The workshop aims to provide a forum for presentations and discussion of key nodal market concepts and to facilitate the exchange of ideas between market participants on the impacts of the nodal market rules on load-serving entities and retail providers. 

    Registration information and course materials are available at this link.  The workshop will also be available via WebEx for those unable to attend in person.  

    CEO’s legislative presentation available online

    ERCOT President and CEO Trip Doggett testified at the Senate Business and Commerce Committee hearing this morning.  The presentation is available on the ERCOT website at this link. 

    The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to 24 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 570+ 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.

    Contact
    Robbie Searcy (512) 225-7213
    rsearcy@ercot.com