'Unprecedented' pandemic conditions see ERCOT mulling bylaw changes

Houston — As the social distancing restrictions caused by the coronavirus pandemic are expected to last several months, Electric Reliability Council of Texas staff and stakeholders have begun a process to ensure rule changes that are needed quickly can be voted upon electronically and without legal challenge.

On Wednesday, ERCOT's Technical Advisory Committee discussed potential changes in ERCOT bylaws to allow the board of directors to meet and vote electronically on such issues.

ERCOT's board of directors has not met in person since mid-March because of the risk of spreading the pandemic.

"A situation of the scale and duration such as the unprecedented COVID-19 pandemic was not contemplated by the bylaws," according to a presentation by ERCOT legal staff.

The bylaws allow the board to conduct teleconference meetings to act on urgent matters, but ERCOT legal staff wants to "expand the definition of urgent matters so that, if it would be difficult or impossible for a quorum of the directors or subcommittee members to physically convene in one location, then the board or its subcommittees may meet via teleconference and take action on matters that, if action was otherwise delayed, would be reasonably likely to result in operational, regulatory, legal, organizational or governance risk."

COMMERCIAL RISK AT ISSUE

Randy Jones, principal at Mountaineer Market Advisors, a Texas energy market consultancy, suggested that commercial or financial risk should also be a condition that ought to be considered in determining the urgency of action.

"If there's a commercial event that happens nationally, that can have even more ramifications" than some of the other, previously included risks, Jones said. "What if one or more of the large banks that supports large numbers of ERCOT market participants went kaput at once?"

Language that addresses this concern was deemed appropriate to include in an email vote by TAC members to be completed Friday.

ERCOT staff expects the board of directors to vote on June 9 on whether to issue a call on June 10 for a vote of corporate members to approve the bylaw changes by special meeting ballot vote, with ballots to be returned by July 2. If the changes are approved, they would be submitted for Public Utility Commission of Texas approval by July 31. If the changes are not approved, a special meeting of the members would occur July 10.

The ERCOT board of directors and committee meetings would be scheduled for August 10-11.

ERS ANNUAL REPORT

TAC also received the annual report on the performance of ERCOT's Emergency Response Service, a program by which distribution-level resources – demand response and behind-the-meter generation – receive a capacity payment to provide resources, either by curtailing load or exporting power to the grid, in the event of an Energy Emergency Alert. The program has three contract periods: February through May, June through September and October through January of the following year.

This year's total rose 1.6% from the previous year, with the largest increase, about $800,000, or 6.1%, during the June-through-September time period.

For the 2019-20 planning period, these resources received $48.2 million across the three contract periods. This is up from $47.5 million for the previous 12-month period.