Weatherization, warm winter may cut Texas grid reliability risk: executives

The Electric Reliability Council of Texas is unlikely to have reliability issues in the winter of 2024-25, as weatherization has improved and temperatures are expected to be above normal, executives said during an ERCOT Board of Directors meeting Dec. 3.

The board also acted to safeguard reliability in the summer of 2025, given the planned retirement of San Antonio municipal utility CPS Energy's three natural gas-fired generators totaling 894 MW of capacity.

ERCOT President and CEO Pablo Vegas said ERCOT's weatherization requirement, mandated by the Texas Legislature in the wake of a deadly mid-February 2021 winter storm, as being "one of the most statistically significant changes" that improved the grid's risk profile, especially in winter. That storm, known locally as Winter Storm Uri, left more than 4 million customers in the ERCOT market without electricity, some for days.

"We have since evolved and had several winters of increasing inspections and also increasing requirements which were more stringent and more focused around where the actual risk profiles are from the northern part of Texas down to the southern part and really tailoring the weatherization requirements based on what the risks are in each of the regions," Vegas said. "So facilities that have seen issues with performance during winter events will go up higher on the list to get reinspected again in a future cycle. Since these requirements have been established in December of 2021, we've completed nearly 3,000 weatherization inspections. Almost 2,000 of those have been on the generation fleet and a little under 1,000 on the transmission service provider fleet."

These numbers exceed Public Utility Commission of Texas weatherization rule requirements, Vegas said.

"We have really seen very significant increases in performance due to this weatherization" since the February 2021 winter storm, Vegas said.

'Mostly warm winter' forecast

ERCOT Chief Meteorologist Chris Coleman forecast "a mostly warm winter, which is the most likely pattern, but either mid- or late winter would be the most likely time period if we do have a cold extreme event."

The winters with analogous weather patterns so far in 2024 include 2020-21, Coleman said.

"Now, that doesn't mean we're going to have another Uri, but it does again say that we're in a pattern that supports something like Uri this winter," Coleman said.

Citing a weather map showing most of Texas to have red and orange colors indicating above-normal temperatures, Coleman said "gives you some good feeling," but added, "The more I look at this winter, the more cold potential I see."

"I rarely update the winter forecast midwinter, but I'm going to have to keep an eye on it as we move from December into January, in particular, to see if there is any potential that this winter could trend colder," Coleman said.

Reliability-must-run deal on tap

Regarding summer 2025, ERCOT Senior Corporate Counsel Davida Dwyer noted that CPS Energy had issued formal notice March 13 of plans to retire three gas-fired generators at the V.H. Braunig Power Plant in the San Antonio area effective March 13, 2024. ERCOT's stability analysis showed the units were needed to maintain grid reliability.

After pursuing alternatives without success, ERCOT staff proposed to negotiate a reliability-must-run agreement to keep the third, newest unit, with capacity of 417 MW, operating for two years beyond the planned retirement, Dwyer said.

Staff also proposed delaying a decision on RMR agreements for the other two units, totaling 477 MW, until a February board meeting as ERCOT explored the possibility of moving into the San Antonio area several mobile generation units, totaling about 400 MW, now leased to Houston-based CenterPoint Energy.

Dwyer said CPS Energy estimates the cost of keeping the units operational two years as follows:

• Unit 1: $24 million, $113,920/MW
• Unit 2: $27 million, $151,012/MW
• Unit 3: $31 million, $76,888/MW

Based on an estimated value of lost load that might occur if all the Braunig units were offline during an ERCOT-wide load shed event, the two-year cost to the market could be $179 million, compared with an estimated $90 million to keep all three units operating on an RMR basis.

PUC Chairman Thomas Gleeson supported ERCOT staff's recommendation on an RMR agreement for Unit 3 and delaying a decision while exploring the possibility of moving generation from Houston to San Antonio.

"I think what we're working towards with mobile generation is an elegant solution to the issue that we're dealing with," Gleeson said. "I've spoken to executive and legislative leadership at the Capitol, and I think everyone is in favor of us moving towards that as a solution."

Chad Seely, ERCOT vice president and general counsel, said the goal is to have the mobile generation in place by April, but the grid operator may have to seek a "good cause" exception to certain state and ERCOT rules to accomplish that.