Texas regulators directed the state's grid operator to make market rule changes that could add to generator revenues.
During a March 8 open meeting, the Public Utility Commission of Texas directed the Electric Reliability Council of Texas to enact rule changes that would remove reliability-must-run and reliability-unit-commitment capacity from the calculation of the market's available operating reserves.
Proponents of doing so have argued that units committed to providing service through out-of-market actions distort price formation.
A March 1 back-cast analysis performed by ERCOT found that removal of the capacity would have increased generator revenue by $6.6 million and $19 million in 2016 and 2017, respectively, or by 0.07% and 0.2%.
The grid operator cautioned that the commission should view the study "as an estimation of the general magnitude of potential pricing impacts rather than as a prediction of a specific pricing outcome."
ERCOT expects to have the rule change ready to present for approval during the grid operator's April board meeting.
Beyond this single market tweak, Texas regulators declined to take further action on rules governing power price formation ahead of the summer.
The PUCT had been considering major power market rule changes before the announced exit of 4,200 MW of coal-fired capacity from the market drove power prices for the upcoming summer to record levels.
ERCOT expects inadequate reserves to meet peak demand this coming summer, increasing the likelihood of high prices.
"When we started this entire project, the market looked one way … and the market has drastically changed with those retirements. And everything that precipitated us even opening this project, the overabundance of energy in the market ... that is not our issue today," PUCT commissioner Brandy Marty Marquez said during the meeting. "There are a whole lot of … substantive rules that have never really been triggered because we have never been through a summer quite like this."
