Texas regulators OK ‘good cause exception’ for cutting power grid’s load forecast

The Public Utility Commission of Texas on June 5 approved a one-year "good cause exception" for rules regarding how the Electric Reliability Council of Texas forecasts load for transmission planning purposes, partly because recently approved state legislation will likely change the process.

But that approval came after a testy questioning of Kristi Hobbs, ERCOT vice president for system planning and weatherization, by Commissioner Courtney Hjaltman, over "the math" ERCOT used to chop original load projections ranging from 130 GW in 2027 to 218 GW of load by 2031 to a range of 115 MW in 2027 to 150 MW by 2031.

In Project No. 55999, Reports of the Electric Reliability Council of Texas, ERCOT filed on June 4 "ERCOT's Revision to Adjusted Load Forecasts and Amended Draft Proposed Order" to provide more details about why ERCOT should not be required to use the higher load forecast, which is generated based on combined transmission service provider load forecasts and signed retail utility provider attestations of large load interconnection requests, as required by a 2023 state law.

"We did provide a graphic that shows kind of the progression of how the forecast has changed or progressed as we've gone through the different changes," Hobbs said. "This is where we applied some adjustments for how we've seen historical performance of officer letters as well as data center load. We also applied some shifting metrics of 180 days based off of how we see those loads actually materializing, compared to their initial projected date when they would be in service. We realized we needed to make some additional adjustments for transmission planning, and that's where the good cause exception comes in."

But the graph did not satisfy Hjaltman's curiosity.

"You can send some graphs to some people, and they will 100% be like, 'OK, I get it,'" Hjaltman said. "I need to be walked through it, alright? I might sit here and do a lot of math, but I need someone to sit there and talk through it and tell me how you got there, because sending me a chart is not going to get me far."

Exploring 'uncharted territory'

For example, previous discussions have shown that ERCOT discounted certain large load projects by 48% or 55%, but Hjaltman said, "When I go back and use your numbers of 48% or 55%, I get different numbers ... and that's where I start to question, and I don't want to question."

"I understand this is all uncharted territory," Hjaltman said. "We are trying to fly the plane together. What I have a concern with is that I don't know what math ERCOT is working with, and I am on a plane with you, flying it, and we're building it. I want to see your work. I want to be able to understand where you get the data."

Asked whether ERCOT had briefed any of the commissioners in detail about the adjusted load forecasts, Hobbs said Chairman Thomas Gleeson was briefed June 4, but Hjaltman urged ERCOT to "do better" and brief everyone on the commission beforehand.

New bill to affect expectations

Hobbs noted that the load forecast's relevance and "good cause exception' is primarily relevant for 2025, as, "We expect there'll be a lot of work coming up in the next couple of months after the passage of Senate Bill 6 and how that translates into forecasts going forward."

The Texas Legislature on June 1 sent to Governor Greg Abbott Senate Bill 6, which contains several provisions regarding large loads and how they must contribute covering interconnection costs and minimizing impact on other, smaller customers.

"The commission shall establish a demand threshold of 75 MW unless the commission determines that a lower threshold is necessary" to "support business development ... while minimizing the potential for stranded infrastructure costs and maintaining system reliability," the bill states.

As the good cause exception only applies to one year, and future load forecasts would be affected the bill, Hjaltman said she was "good with" granting the exception.

Gleeson said, "That's something we did talk about, that coming out of Senate Bill and the [legislative] session, the need to make sure that we standardize how we're counting loads and a lot of our processes, and that will be something that we prioritize here at the commission and at EROT to make sure that we have a better process in place for next year."

A motion to direct staff to draft a final order for the exception passed unanimously.