ERCOT NEWS: March Board Meeting Highlights

Topics

• Board approves 13 protocol revisions
• Additional purchase of emergency interruptible loads approved
• Board briefed on ‘dead bus’ issue
• Severe weather impact noted in commercial market operations
• New finance, risk officers ratified
• CEO reports on favorable budget variance
• ERCOT staff reports

Board approves 13 protocol revisions

March 25, 2011, Austin – The Board of Directors for the Electric Reliability Council of Texas (ERCOT), the state grid operator and manager of the wholesale electric market, approved 13 market rule revisions at Tuesday’s monthly meeting. 

Following a discussion on budget impacts and benefits, the board approved 11 Nodal Protocol Revision Requests  (NPRRs), one Nodal Operating Guide Revision Request (NOGRR), and one System Change Request (SCR):

• NPRR 275 – Clarify Qualified Scheduling Entity’s Ability to Make Changes to Ancillary Service Resource Responsibility in Real Time;
• NPRR 283 – Clarification of Pre-Assigned Congestion Revenue Right Allocation Eligibility;
• NPRR 289 – Clarify Use of Raise/Lower Block Status Telemetry;
• NPRR 291 – Reduce the Comment Period for NPRRs and SCRs;
• NPRR 292 – Add Key Provisions of Regional Planning Group Charter to Protocols;
• NPRR 297 – Add Administrative NPRR Process to Nodal Protocols;
• NPRR 303 – Requirement to Post Point-to-Point Options Cleared in the Day-Ahead Market or Taken to Real Time;
• NPRR 305 – Timeline for Calculating the Value of X;
• NPRR 307 – Change Supplemental Ancillary Services Offer Procedures;
• NPRR 323 – Correct Day-Ahead Market Credit Exposure Language and Enable Qualified Expiring CRRs to Offset Point-to-Point Bid Exposure;
• NPRR 325 – Price Correction during Security Constrained Economic Dispatch Process Failure;
• NOGRR 057 – Daily Report Containing Loss of Generation Greater than 450 megawatts (MW);
• SCR 760 – Recommended Changes Needed for Information Model Manager and Topology Processor for Planning Models. 

The Technical Advisory Committee chairman also noted in his update that the committee had approved the Fourth Quarter 2010 Emerging Technologies Integration Plan Report and voted to create an Emergency Response Team Task Force that would be responsive to requests of the board subcommittees investigating the Feb. 2 event.

Additional purchase of emergency interruptible loads approved

In other action, the board ratified a petition for an emergency rulemaking at the Public Utility Commission (PUC) to allow ERCOT to procure additional emergency interruptible load service to cover April 1-May 31.   

Due to the extreme cold temperatures and temporary decrease in available electric supply on Feb. 2, ERCOT deployed 468 megawatts (MW) in emergency interruptible loads for a total sustained response period of 28 hours.  Deployment limitations in the current contract prevent ERCOT from using them again during Feb. 1-May 31, necessitating the creation of a new contract period for April and May.  The petition, which was later approved in the PUC’s March 24 meeting, gives ERCOT the flexibility to create a new contract period for April 1-May 31 without the 90-day notice normally required in the PUC Substantive Rule 25.507. 

The board also approved:

• 2011 Type 1, SAS 70 Audit Report
• Financial Corporate Standard
• Market Credit Risk Standard 

Three board task forces reviewing the Feb. 2 events presented their reports concerning operations, external communications, and credit:

• Board Task Force on Operations Report
• Board Task Force on Feb. 2 Communications 

The chair of the credit task force noted they had no changes to recommend at this time.

Board briefed on ‘dead bus’ issue

John Dumas, director of wholesale market operations, briefed board members on two issues that have surfaced after three months of operation in the new nodal market.  

Some weighted-average locational-marginal prices (LMPs) at electrically close locations are different even though congestion is not present.   A pending protocol revision (NPRR 326) will address this issue, Dumas said. 

The biggest challenge in the new nodal market stabilization is a problem with inconsistent pricing at de-energized resource nodes, also known as dead buses.  ERCOT has addressed part of the problem by adding 609 electrical buses to 140 stations.   

Another cause for the inconsistent pricing is due to split bus stations and de-energized resource nodes being assigned an average LMP within the same station.  ERCOT staff will be filing an "urgent" protocol revision request to modify the pricing rules.    

Also in the wholesale market operations report, Dumas reported that energy prices and ancillary service prices for February were much higher on average, compared to December 2010 and January 2011, due to a few days of extreme weather in February.  (ERCOT broke its all-time winter peak demand record on Feb. 2, and again on Feb. 10.) 

The congestion revenue rights auction for February completed with 158,560 bids and 23,660 auction awards for a total auction/allocation revenue of $15.1 million.

Severe weather impact noted in commercial market operations

Betty Day, director of commercial market operations, reported that average dollars transacted in the wholesale market was similar to the first three months of the new nodal market – approximately $7 million a day – except for the extreme weather days which averaged around $65 million with the highest day, Feb. 2, at $190 million. 

Congestion payments for February were substantially higher than prior months, totaling over $80 million, due to the cold weather events. 

New finance, risk officers ratified

The board ratified two new ERCOT officers for the 2011 year:  Mark Ruane , vice president of credit and enterprise risk management, and Michael Petterson, vice president of finance and treasury.  ERCOT bylaws require that the board ratify ERCOT officers for terms not to exceed one year.  Officers may be re-elected or re-ratified for consecutive terms without limitation.

CEO reports on favorable budget variance

CEO Trip Doggett reported a $1.2 million favorable variance in the February budget, for a year-to-date favorable variance of $7.5 million. 

In his departmental updates, Doggett noted that the operating committee from the North American Electric Reliability Corporation (NERC) unanimously passed a resolution commending ERCOT operators for their decisive action in shedding load to maintain system security on Feb. 2.  In addition, staff from the Federal Energy Regulatory Commission (FERC) visited ERCOT to get an overview of the February cold weather event, Doggett reported.

ERCOT staff reports

Monthly staff reports included:

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

ALSO ONLINE

Archived broadcasts of ERCOT board meetings

March 22 ERCOT Board meeting

March 21 Finance and Audit Committee meeting

March 21 HR and Governance Committee meeting