ERCOT's conservation event results from two rare generation setbacks

The Electric Reliability Council of Texas' tight supply conditions on June 14, which prompted calls for conservation through June 18, represented a confluence of two conditions, each of which had a probability of about 5%, the Public Utility Commission of Texas learned June 17.

Warren Lasher, ERCOT senior director of system planning, told the PUC that ERCOT's final Seasonal Assessment of Resource Adequacy for the summer of 2021 considered two scenarios – extreme generation outages and extreme low wind output – that each had a one-in-20 chance of occurring.

Around 2:30 pm on June 14, ERCOT had 12.7 GW of generation on forced outage, meaning that mechanical repairs had to be made. Of that amount, about 9 GW was thermal, while the rest was in the renewable category.

ERCOT's final SARA included a scenario with an extra amount of thermal generation offline, 6.2 GW versus a typical total of 3.6 GW.

A different scenario included a 6.6-GW dip in wind output, compared with an expected 12 GW of wind. Testifying before the PUC, Woody Rickerson, ERCOT vice president for grid planning and operations, said wind output fell as low as 118 MW on June 14, but that was in the morning, well before the day's afternoon.

ERCOT set a new monthly peak load for June on June 14, 69.9 MW, compared with the previous record of 69.1 GW set in 2018, but ERCOT had forecast load to top 73 GW this June 14.

In response to Lasher's probability assessment, PUC Chairman Peter Lake compared the situation to flipping a coin, in which the averages over time may be clearly 50%, but each particular outcome is a discrete event, unaffected by previous outcomes.

"The business we're in, in terms of providing reliability to Texans, the math resets every morning, and we don't get infinite flips of the coin," Lake said. "Every morning, we're skydiving, and you only get one chance for it to go wrong – after that, the averages don't matter."

Rickerson said ERCOT relies on several forecasts, including wind and solar output, weather and load, plus thermal generators "current operating plans," in order to determine whether it has enough resources operating to meet demand. If not enough is determined to be available the day before an operating day, then ERCOT uses the reliability-unit-commitment process to ensure sufficient dispatchable generation is on hand.

More transparency may be needed

Under ERCOT rules, generators are not required to reveal their operating status until 60 days after an operating day, in the interest of maintaining confidentiality and fair competition, which can prevent the public from even knowing which plants went offline.

However, Lake raised the possibility of waiving the 60-day delay in the public interest, especially as certain companies provide reports about which generators are operating in real-time.

"[Peer] pressure is a real thing, and public eyes on these individual events may have benefit," Lake said. "I think the potential for market manipulation from having that information in the public has a minimal impact."

Commissioner Will McAdams expressed confidence in generation operators' incentives for "doing the right thing" so that they are ready to operate when called upon.

"Their shareholders have an interest in maintaining those facilities, but there's probably a benefit that could be considered in transparency," McAdams said. "When these things go down, you have an interest in getting them back up."

In a related matter, Governor Greg Abbott on June 17 appointed Lori Cobos to a term on the PUC to expired Sept. 1. Cobos has served as the state Office of Public Utility Counsel's chief executive and public counsel since April 2019. OPUC serves as an agency to protect the interest of residential and small commercial utility consumers.