ERCOT stakeholders tackle storm-related items, await legislative, PUC action

Houston — The Electric Reliability Council of Texas Technical Advisory Committee is working through more than 100 issues related to the deadly mid-February winter storm that may result in rule or procedure changes to reduce the chances of a recurrence of more than 4 million customers losing power over several days.

Of 124 items on the "Emergency Conditions List" of subjects requiring attention, one of the two items in progress as of May 26 is to "accelerate ongoing efforts to improve" the Capacity, Demand and Reserves report and Seasonal Assessment of Resource Adequacy and "incorporate probabilistic modeling to evaluate the risk of various magnitudes of ERCOT emergency events."

This item also stipulates that if the existing deterministic scenario is retained, methods to account for "more extreme and overlapping events" should be considered by ERCOT's Wholesale Market Subcommittee in resolving this item.

Systemwide offer caps

The other item deemed to be in progress also requires WMS activity -- in particular, developing and implementing an updated methodology used to determine the cost of new entry. The CONE is used in market-power related protocols and in determining which systemwide offer cap -- the "high" cap (HCAP) of $9,000/MWh or the "low" cap (LCAP), which currently is the higher of either $2,000/MWh or 50 times the fuel index price.

During the mid-February winter storm, the LCAP would have topped $17,000/MWh, if the Public Utility Commission had not intervened to set the systemwide offer cap at $9,000/MWh during the February energy emergency.

The trigger mechanism that would normally cause that change in systemwide offer cap is when the Peaker Net Margin exceeds $315,000, considered to be three times the annual cost of new entry for a natural gas peaking generator.

PNM is a measure of how much net revenue a hypothetical natural gas generator might have earned in a year, given real-time power prices and spot natural gas prices. The 2020 total was less than $50,075. Before 2020, ERCOT's record high PNM was almost $150,000 in 2019, according to Potomac Economics, ERCOT's independent market monitor. The most recent PNM was unavailable at press time, but it approached $582,273 on Feb. 18.

TAC is the highest-level of stakeholder committees, second only to ERCOT's board of directors.

Legislative, PUC action

Of the remaining items facing TAC, 19 topics are awaiting action by the Texas Legislature, which is slated to end its current regular session May 31.

Items awaiting such action cover topics such as emergency communications, gas-electric coordination, ERCOT's governance, weatherization requirements, retail markets, efforts to harden critical infrastructure, raising the $2.5 million/month default uplift limit, compensation for excessive fuel costs during energy emergencies, and integrating intermittent renewable resources with dispatchable resources.

TAC is awaiting PUC action for another 18 items, covering subjects such as:

• Communication among the customers, retail electric providers, and transmission and distribution utilities
• Potential default uplift impacts to residential customers
• Emergency preparedness and response
• Increasing the detail of distribution circuits so as to facilitate rotating outages more equitably
• Prohibiting critical infrastructure from participating in demand response programs
• Critical infrastructure identification upgrades
• Changing the systemwide offer cap
• Changing the point at which physically responsive capacity triggers an Energy Emergency Alert