ERCOT Reviews Impact of Cross State Air Pollution Rule

The Electric Reliability Council of Texas (ERCOT), the state grid operator and manager of the wholesale electric market, released today an evaluation of the potential impacts of the Environmental Protection Agency’s (EPA) Cross State Air Pollution Rule on generation facilities in ERCOT, as requested by the Public Utility Commission in July 2011.  

The report, “Impacts of the Cross-State Air Pollution Rule on the ERCOT System,” is available on www.ercot.com in the News/Reports and Presentations section under Operations and System Planning. 

Based on the information provided by the resource owners, ERCOT developed three scenarios of potential impacts from CSAPR: 

• The first scenario, derived directly from the compliance plans of individual resource owners, indicates that ERCOT will experience a generation capacity reduction of approximately 3,000 MW during the off-peak months of March, April, October and November, and 1,200 – 1,400 MW during the other months of the year, including the peak load months of June, July and August.  
   
• Scenario 2, which incorporates the potential for increased unit maintenance outages due to repeated daily dispatch of traditionally base-load coal units, results in a generation capacity reduction of approximately 3,000 MW during the off-peak months of March and April; 1,200 – 1,400 MW during the remainder of the first nine months of the year; and approximately 5,000 MW during the fall months of October, November and possibly into December. 
   
• Scenario 3 includes the impacts noted for Scenario 2, along with potential impacts from limited availability of imported low-sulfur coal.  This scenario results in a generation capacity reduction of approximately 3,000 MW during the off-peak months of March and April; 1,200 – 1,400 MW during the remainder of the first nine months of the year; and approximately 6,000 MW during the fall months of October, November and possibly into December.

When the CSAPR rule was announced in July, it included Texas in compliance programs that ERCOT and its resource owners had reasonably believed would not be applied to Texas.  In addition, the rule required implementation within five months – by January 2012.  The implementation timeline provides ERCOT an extremely truncated period in which to assess the reliability impacts of the rule, and no realistic opportunity to take steps that could even partially mitigate the substantial losses of available operating capacity described in the scenarios examined in this report.  In short, the CSAPR implementation date does not provide ERCOT and its resource owners a meaningful  window for taking steps to avoid the loss of thousands of megawatts of capacity, and the attendant risks of outages for Texas power users.