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Texas grid operator moves to protect its independence from federal oversight

During a Feb. 20 meeting, the Electric Reliability Council of Texas board of directors approved a market rule change that clarifies the grid operator's authority to block cross-border power transactions, either by ordering the disconnection of transmission facilities or by denying or curtailing cross-border flows of electricity.

On Dec. 14, 2017, the Public Utility Commission of Texas instructed ERCOT to implement the rule change in order to shield the market from federal oversight after PUCT Chairman DeAnn Walker raised concerns that transmission projects outside of ERCOT, including proposed projects in Mexico, could enable ERCOT's power to be commingled with that of other states, putting its current regulatory status at risk.

Because ERCOT is located solely within Texas and is not synchronously connected with other parts of the U.S. transmission system, the PUCT has oversight over wholesale power market rules and transmission rates within ERCOT. Elsewhere in the U.S., that regulatory authority lies with the Federal Energy Regulatory Commission.

ERCOT has two commercially operational direct-current ties with the Eastern Interconnect, both of which are operated by units of American Electric Power Co. Inc. and three DC ties that connect its system to the Mexican power grid, two of which are operated by AEP and one by Sharyland Utilities LP.