ERCOT NEWS: October Board Meeting Highlights

TOPICS:

• Board approves changes to market rules, credit standards
• CEO reports new wind record
• Drought impact reviewed
• Other staff reports
• Interim report completed for long-term transmission analysis
• More than 600 participate in black-start training
• New CIO, other staff news

Board approves changes to market rules, credit standards

Oct. 20, 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 several market rule revisions and changes to credit and ancillary services requirements at  Tuesday’s meeting. 

Five Nodal Protocol Revision Requests (NPRRs) were approved including:

• NPRR 364 – Clarify Active and Inactive Security-Constrained Economic Dispatch (SCED) Constraint Reporting;
• NPRR 370 – Supplemental Ancillary Services Market Modifications;
• NPRR 389 – Modification of Voltage Support Requirements to Address Existing Non-Exempt Wind-powered Generation Resources;
• NPRR 391 – Shortening Real-Time Market Settlement and Payment Timeline and Eliminate Automated-Clearing House as a Mode;
• NPRR 400 – Eliminate Unsecured Credit for Congestion Revenue Rights Auctions and for Future Credit Exposure (FCE) and Eliminate Netting of FCE with Current Credit Exposure. 

Board members also approved revisions to the ERCOT Credit-worthiness Standards, reducing the maximum allowed amount of unsecured credit from $100 million to $50 million.  The revision is consistent with the maximum at other independent system operators and is expected to reduce the overall credit risk in the ERCOT market. 

As part of an annually required review, the board approved the ancillary services methodology for 2011-2012.  The new requirements include changes to account for the recent switch to the nodal market.

In other action, the board voted to increase the not-to-exceed ceilings for Wide-Area Network fees  to $25,000 per connection for initial installations and $1,500 for monthly network management. 

The board discussed at length a response from the Technical Advisory Committee on the board’s operations task force recommendations following the Feb. 2, 2011 extreme weather event.  The task force report included six recommendations regarding seasonal assessments, operational communications, further technical investigation, load shedding, and other operational issues. 

The board did not take up a recommendation from the Technical Advisory Committee on a holistic methodology for setting appropriate shadow price caps for constraints not resolvable by security-constrained economic dispatch.   The discussion was postponed until the board’s next meeting in December to allow hearing on an appeal from a market participant. 

CEO reports new wind record

CEO Trip Doggett announced the grid hit a new wind record of 7,400 megawatts (MW) on Oct. 7, at 3:06 p.m.,* exceeding the previous record of 7,355 MW from June 19, at 10:26 a.m.   At the time of the new record, wind was supplying 15.2 percent of the total system load, 48,733 MW.  

The new record included 967 MW from coastal wind farms and 6,433 MW from the west and north zones.   ERCOT currently has 9,452 MW of installed wind capacity – including 7,942 MW in the western part of the state, 292 MW in the north, and 1,216 MW in the coastal region.   

Doggett also reported that staff is analyzing the impact of the proposed changes to the Cross State Air Pollution Rule announced by the EPA on Oct. 6.  ERCOT is gathering information from generators regarding how the changes will affect their compliance plans.  

Drought impact reviewed

Vice President of Grid Operations and System Planning Kent Saathoff discussed the effect of drought on ERCOT generation in his Grid Operations and Planning report.  Based on the most recent survey of generators, one small unit (24 MW) is currently unavailable due to the ongoing drought, Saathoff said. 

If East Texas receives only half its normal winter/spring rainfall, generation unavailability due to the drought could go up to 434 MW by May, Saathoff said.  If no significant rainfall occurs, the unavailability is estimated to be more than 3,000 MW by May. 

Saathoff said generation owners have been taking actions to reduce the impact of the drought on generation coolant by building pipelines to remote water sources, procuring additional water rights and adding pumping capability. 

Other staff reports

In the Wholesale Market Operations update, John Dumas, director of wholesale market operations,  reported on market enhancements under consideration including:

• Non-spinning reserve pricing proposals
• Look-ahead SCED functions
• Emergency Interruptible Load Service rule enhancements
• Feasibility of implementing an energy storage pilot. 

Other staff reports covered:

• Commercial Market Operations  
• Financial Summary  
• External Affairs  
• Information Technology and Facilities  
• Business Integration
• Risk Event Profile Matrix  

 The board’s next meeting is scheduled for Dec. 13. The November regular meeting has been cancelled.  

ALSO ONLINE

Archived broadcasts of ERCOT board meetings
October 18 ERCOT Board meeting
October 17 Finance and Audit Committee meeting 
October 17 HR and Governance Committee meeting  

Interim report completed for long-term transmission analysis

The Long-Term Study Task Force recently filed its interim status report for the ERCOT Long-term Transmission Analysis 2010-2030 with the Department of Energy (DOE).  The report includes two volumes:  Volume 1 provides the project status, stakeholder contributions to date, and a summary of future work expected to be completed by 2013; Volume 2 includes a description of the tools and processes, as well as the technical analysis that has been completed. 

ERCOT received grant funding from the DOE in April 2010 to conduct interconnection-wide long-range transmission planning for the Texas Interconnection.  The DOE funds are being used to enhance the existing long-range planning efforts for the ERCOT region.  The final report for the grant-funded study is due to the DOE by June 2013. 

More than 600 participate in black-start training

More than 600 operations staff from ERCOT and across the region participated in recent training sessions on system restoration – also known as “black start.”  Six sessions, each lasting one and a half days, were conducted in Taylor from July to August, using ERCOT’s operator training simulator. 

In the 10-hour simulation day, the participants operated a simulated portion of their own system equipment and had to restore their “islands” of responsibility after a system-wide blackout.  ERCOT system operators monitored their progress in the simulator control room using the ERCOT-developed Macomber Map which indicated each transmission line as it was energized during the restoration process. 

ERCOT contracts every two years for black-start units and holds an annual drill with the black-start unit providers to test the black-start procedures.   In the event of a major blackout, the units must be able to start on their own without support from the grid and then pick up their own load.  The units would then be required to build a stable island with the ultimate goal of reaching synchronization points with other neighboring black-start islands.  When the islands are ready to be synchronized, ERCOT will coordinate the resynchronization. Once the islands are tied, ERCOT would take control of the combined islands and coordinate frequency control and restoration of load.  

New CIO, other staff news

Jerry Dreyer was ratified as vice president and chief information officer at last month’s board meeting, replacing Richard Morgan who recently retired.   Dreyer was formerly serving as director of application services.  

Jim Brenton, principle of regional security, was recently elected as vice chair of the North American Electric Reliability Corporation (NERC) Critical Infrastructure Protection Committee. 

Kent Saathoff, vice president of grid operations and system planning, was elected as a member of the NERC Operations Committee Executive Committee.

* Correction: The time of the wind record was incorrectly reported originally as 3:06 a.m.  The actual time was 3:06 p.m.