ERCOT must prioritize new ancillary services for electric reliability: Texas PUC

Electric Reliability Council of Texas system project managers need to implement new ancillary services to enhance reliability as soon as possible, the Public Utility Commission emphasized Jan. 18, but ERCOT staff said the complexity of a major system upgrade may slow projects.

"The Public Utility Commission over the last six months has undertaken an extensive review of resource adequacy, " said Will McAdams, a Texas PUC member during the Jan. 18 ERCOT Board of Directors meeting, the second day of a two-day meeting.

After that review, the PUC adopted an extensive Phase I blueprint of market reforms to address resource adequacy needs, McAdams said, adding that "that is our guiding star over the next two years on the part of the commission, on the part of the governor of Texas, that we must satisfy these near-term challenges in light of a changing resource mix."

"We can control what we can control, and that [Phase I] package of ancillary services and market-based mechanisms that we have imposed on the staff of ERCOT to work out the details and come back to us with an execution plan is absolutely ... the priority for us," McAdams said. "If we do not achieve those goals, the consequences could be significant in terms of restoring confidence for the public in this system. Any other effort should be subordinated to that target."

Some Phase I proposals, such as lowering the high systemwide offer cap from $9,000/MWh to $5,000/MWh and revamping the Emergency Response Service so it can be deployed before an Energy Emergency Alert is declared, have already been implemented, and another, integrating load resources in ERCOT's Non-Spin Reserve ancillary service, is targeted to go live by June 2022.

However, market participant systems were unready to participate in the new Fast Frequency Response Service when ERCOT had it ready in December. Mandy Bauld, ERCOT senior director for project portfolio management, said a go-live date has not yet been set, but ERCOT hopes to launch it in October.

Another Phase I ancillary service is the ERCOT Contingency Reserve Service, a ramping service to help with increasing intermittent renewable penetration. Approved by the ERCOT board in February 2019, Bauld said the organization has targeted a launch by the summer of 2023, when systems will be frozen for about 12 months.

New Energy Management System

During those 12 months, ERCOT will begin installing its new Energy Management System, a $27 million, comprehensive computer system upgrade that started in October 2019 and is targeted to go live in June 2024.

Asked about the likelihood that ERCOT projects are completed within the time estimate, Troy Anderson, ERCOT senior manager for portfolio management, said ERCOT completes a rigorous estimation process, but projects are "rarely" delivered earlier than estimated and sometimes projects are delivered three or four months later than the initial estimate.

In response to board member Zin Smati's question about using outside contractors, Jayap Parakkuth, ERCOT chief information officer, said the usefulness of using contractors "depends on the system" involved.

"Let's say we have changes in the market system," Parakkuth said. "It's not like we have the source code for that system. We are completely dependent on the vendor for that system to provide the solution. So, in this case, us adding [workers] around that product would not help us."

One of the ERCOT information technology staff's challenges is that it has been making ERCOT-specific enhancements to the ERCOT EMS since the early 2000s.

"Every time there's an upgrade, we have to take those enhancements and put them on the next upgrade," Parakkuth said. "So, it's not like a conversion of an off-the-shelf product that we have. Every year that we add ERCOT-specific enhancements, the next EMS upgrade becomes that more complex."

The current EMS upgrade's vendor is converting several core systems from the Fortran computer language to C++, Parakkuth said, "which means ... we have to completely rewrite some of the special [functions], which makes it harder to upgrade."

Grid better prepared this winter

ERCOT board members learned Jan. 17 that generation and transmission resources are much better prepared this winter than they were for the deadly mid-February 2021 winter storm during a weatherization inspection update from Woody Rickerson, ERCIT vice president for system planning and weatherization, and David Kezell, ERCOT director of weatherization and inspection.

ERCOT ultimately received 850 Winter Weatherization Readiness Reports from generators and 54 WWRRs from transmission service providers. Several of the generation WWRRs were late, and PUC Chairman Peter Lake, who sits on the ERCOT board ex officio, said the PUC has levied $7.5 million in fines on some of them.

"Of course, each of these companies has the right to due process ... but I mention that so that everyone listening and everybody on this board knows that the commission is taking a very aggressive posture in terms of compliance, and we will be utilizing every bit of the fining ability that the Legislature empowers us with," Lake said.

Of the generation WWRRs, 532 included assertions for good cause for noncompliance, of which 418 were satisfactorily resolved by Dec. 31, Rickerson said. Another 54 had later completion dates that ERCOT is tracking, and ERCOT referred the remaining 60 for PUC evaluation and enforcement.

The 54 generation units for which ERCOT is tracking weatherization efforts, several may be affected by supply chain or personnel issues, Kezell said, and are slated to be complete in the first quarter.