ERCOT NEWS: January Board Meeting Highlights

TOPICS:

• Nodal market shows savings from improved grid management
• Price corrections for Dec. 15 approved
• Three protocol revisions adopted
• New board chair elected, committee leadership chosen
• CREZ reactive study recommendations reviewed
• 2010 accomplishments, monthly reports presented

Nodal market shows savings from improved grid management

January 20, 2011, Austin – Costs for regulation reserves were $8.52 million less in the first month of ERCOT’s nodal market operations compared to December 2009, the independent market monitor for the Electric Reliability Council of Texas, told board members Tuesday. 

Dan Jones of Potomac Economics, the market monitor appointed by the Public Utility Commission, reported that the grid operator is using about half as much of regulation reserves – energy used to regulate grid frequency – because of the more efficient five-minute dispatch in the new nodal market.   He also reported that the more precise dispatch available with the new systems is improving efficiency in the management of transmission congestion, enabling the grid operator to maximize the flow over the constraints. 

"Our operators love the nodal system," Kent Saathoff, vice president of grid operations and system planning, said.  "We are operating more efficiently with less capacity.  We’re also managing our limits a lot closer." 

John Dumas, director of wholesale market operations, reported that hedged energy exceeded the day-ahead load forecast on average during December, indicating a conservative approach. 

"The strong participation in the day-ahead market is a very good thing," Dumas said.

Dumas also noted that day-ahead prices and real-time prices were closely correlated in December and followed the load profile.  Real-time prices were slightly higher during peak hours due to ramp-rate constraints.

Betty Day, director, commercial market operations, reported that the volume of wholesale market settlement disputes in the first month of nodal were lower than expected.

Price corrections for Dec. 15 approved

The board approved the staff recommendation for price corrections of real-time locational marginal prices and real-time settlement point prices for the settlement interval 15 minutes after midnight on Dec. 15.   

ERCOT protocols consider prices as final at the close of the next business day and prohibit the prices to be changed after they are final, unless the board determines that the prices were "significantly affected by a software or data error."  Staff presented an explanation of the error and said they are working on a long-term fix.

Three protocol revisions adopted

In other action, the Board approved three nodal protocol revision requests (NPRRs) and one binding document revision (OBDRR):

• NPRR 260 – Providing Access to Market Information System (MIS) Secure Area to MIS Registered Users;
• NPRR 282 – Dynamic Ramp Rates Used in Security Constrained Economic Dispatch (SCED);
• NPRR 302 – Correct Fuel Type Language for Mitigated-Offer Cap;
• OBDRR 001 – TX SET Implementation Guides Revision Process. 

New board chair elected, committee leadership chosen

As a requirement of the first meeting of the year, the board also voted on leadership for 2011, electing Laura Doll as the new chair and former interim chair Michehl Gent as vice-chair.  (See news release.)   

In addition, the board voted on leadership of the two committees, re-electing Clifton Karnei as the Finance and Audit Committee chair and Andrew Dalton as the Human Resources and Governance Committee chair.   Jorge Bermudez was chosen as the new vice-chair of Finance and Audit.   A.D. Patton was re-elected as vice-chair of Human Resources and Governance.

CREZ reactive study recommendations reviewed

ERCOT staff presented a summary  of the Competitive Renewable Energy Zone (CREZ) Reactive Study which analyzed reactive power needs to achieve the cost-effective and reliable implementation of the approved CREZ transmission infrastructure.   Reactive power supports the flow of real power on the system. 

The study recommended the installation of shunt static reactors and capacitors, and several shunt dynamic reactive devices at various substations, as well as providing specifications for the series capacitors that will be installed on six of the CREZ lines and analyzing the effects of these devices on existing generation.  Estimated cost of the shunt devices is $395 million. 

The presentation also included the need for additional studies to define system operation and interconnection requirements necessary for reliable grid operation with high levels of CREZ wind generation. 

"There are a lot of solutions.   Our goal is to facilitate the most cost-effective solution for a reliable grid going forward," Saathoff said. 

The study was conducted by a team of outside consultants under the supervision of ERCOT and CREZ transmission providers.

2010 accomplishments, monthly reports presented

CEO Trip Doggett reviewed 2010 accomplishment in his update to the board.  ERCOT ended the year with a $15.3 million surplus.  The cold February weather and above-average temperatures in the summer contributed to the variance, in addition to employees’ efforts to control expenses, Doggett said.    Energy consumed in 2010 was 319,097 gigawatt-hours, nearly 3 percent above the forecast which is based on normal weather. 

Doggett recognized employees for the successful launch of the nodal market on Dec. 1.  Other accomplishments included:

• Processed more than 400 million advanced metering usage data transactions;  currently performing financial settlement for more than 2 million advanced meters – a process unique to ERCOT.  No other independent system operator is using advanced metering data in wholesale financial settlements.
• Completed construction of the Bastrop facility and Taylor data center ahead of schedule and under budget for a savings of $2.9 million;
• Achieved an 80 percent reduction in cost per terabyte of data storage through implementation of an information life-cycle management project;
• Received an "unqualified opinion" on the SAS 70 audit;
• Received a 100 percent compliant rating on an operating procedures internal audit;
• Maintained grid reliability through Tropical Storm Hermine on Sept. 6, a new winter demand peak, four new summer peaks,  and numerous new wind output records, ending the year with a wind generation record of 7,227 megawatts on Dec. 11, representing nearly 26 percent of the load at the time;
• Developed and implemented the Macomber Map^TM, a visualization tool for improving operator situational awareness. 

Monthly staff reports included:

• Wholesale Markets Operations Report
• Commercial Market Operations Report - Revised FINAL
• Grid Operations and Planning Report
• Information Technology and Facilities Report
• Business Integration Update
• Financial Summary
• External Affairs
• Risk Event Profile Matrix

ALSO ONLINE

Archived broadcasts of ERCOT board meetings

Jan 18 ERCOT Board meeting

Jan 17 Finance and Audit Committee meeting

Jan 17 HR and Governance Committee meeting