The Electric Reliability Council of Texas announced that it will end a reliability must-run, or RMR, agreement earlier than it had originally planned for one of NRG Energy Inc.'s natural gas-fired power plants in the state. As a result, the company's Greens Bayou unit 5 in Harris County, Texas, will be mothballed May 29, a little more than a year ahead of schedule.
ERCOT notified NRG that it was terminating the agreement for the unit in February, which ERCOT said was based on several factors, including an RMR study completed last year, a recent generation interconnection status report, and its own judgement.
In June 2016, ERCOT executed its first RMR agreement in five years for the plant, requiring the facility to remain in service June through September 2016, the same period in 2017 and in June 2018. The plant has been in service since 1973 and is rarely used, according to S&P Global Market Intelligence data.
The RMR agreement was only proposed for peak summer months because ERCOT's planning studies only showed reliability violations occurring during that time of the year. ERCOT also said at the time that it would look at lower-cost alternatives to the agreement, including the issuance of a request for proposals for demand response service to support transmission stability in the Houston area.
In September 2016, ERCOT said it would not pursue alternatives to its agreement with NRG because it found that none of the qualified offers submitted would sufficiently meet reliability needs provided by Greens Bayou unit 5.
ERCOT issued a notice in October 2016 that after completing additional studies regarding the unit, it was still necessary to support transmission system reliability. But ERCOT also noted that it may not be needed after July 31, 2017, if Exelon Corp.'s Colorado Bend Energy Center II comes online as scheduled. The studies were conducted using adjusted standards for measuring a generator's necessity for reliability purposes, approved by ERCOT's board of directors the same month.
According to S&P Global Market Intelligence data, the Colorado Bend Energy Center II will begin operating as planned in June.