Regulatory Updates by Region

ERCOT Regulatory Highlights: August 2015

This month…

  • The PUC is reviewing the Reserve Margin Target for ERCOT.  
  • ERCOT filed the Board-approved ERCOT Budget and associated System Administrative Fee for approval at the PUC.  A hearing is scheduled for August 19th.
  • ERCOT continues work on the Ancillary Services Overhaul with the next step being the completion of the cost benefit analysis.


ERCOT and the PUC

Resource Adequacy at ERCOT

The Commission continues to review the appropriate Reserve Margin Target for ERCOT in Project No. 42302.  PUC staff filed a memo in June asking the commissioners for further guidance on how to proceed.  At the June 18 open meeting, the commissioners agreed to have a workshop on the reserve margin target later this year.  The Fall Seasonal Assessment of Resource Adequacy (SARA) is due from ERCOT on September 1.

ERCOT 2016-2017 Budget and Fee

The ERCOT Finance and Audit Committee recommended, and the Board approved the ERCOT 2016/2017 budget and associated System Administrative Fee.  ERCOT submitted the budget and fee request to the Public Utility Commission of Texas for approval.  The Board-approved System Administrative Fee would increase from the current $0.465/MWh to $0.555/MWh.  ERCOT filed the budget for PUC approval on July 1 and a hearing is set for August 19.  The fee that is approved by the PUC would be effective on January 1, 2016.

Ancillary Services Overhaul

In 2013 ERCOT announced its intention to overhaul the Ancillary Service Markets.  After a year of stakeholder involvement, ERCOT filed Nodal Protocol Revision Request (NPRR) NPRR667 – Ancillary Service Redesign. 

ERCOT also hired the Brattle Group to perform a cost/benefit analysis (CBA) for the NPRR.  At the June TAC meeting, ERCOT reviewed the schedule and next steps for this NPRR. 

  1. ERCOT to file comments on NPRR 667 (early July 2015)
  2. Stakeholders provide comments on NPRR 667 and ERCOT comments  (by early fall)
  3. Complete CBA (October 2015)
  4. Review and discuss comments on NPRR 667 and CBA
  5. Provide “polished” NPRR 667 and completed CBA to PRS/TAC (Late Fall 2015)

At the July TAC meeting, ERCOT provided an update on the development of the Cost/Benefit Analysis for the Future Ancillary Services Redesign effort.  The update included a review of assumptions used in the analysis as well as a preview of the base case ancillary service quantities for 2016 using both the current ancillary services and the proposed future ancillary services. 

As a reminder, ERCOT has committed to implement the Ancillary Services Overhaul proposal no earlier than three years after Board approval of the NPRR.




Energy Management System (EMS) Coding Issue

ERCOT reported that they received an inquiry related to shift factors on a radial line that seemed to be incorrect.  After investigation, ERCOT discovered that, since market open on December 1, 2010, the shift factor calculation included a variable not consistent with industry standards.  ERCOT reported that over the course of the period of time this was incorrect, 52 percent of SCED runs had binding constraints, but ERCOT contends that while dispatch and corresponding prices in some of these intervals may have been impacted, they believe the impact was minimal.  An attempt to recalculate a new set of prices would require significant assumptions and ERCOT indicates that there is no way to accurately and confidently resettle the market.  The variable was set correctly beginning July 8, 2015.

Upcoming ERCOT and PUC Meetings:

Retail Market Subcommittee – August 4

Wholesale Market Subcommittee – August 5

Reliability and Operations Subcommittee – Cancelled

ERCOT Board Meeting – August 11

Commercial Operations Subcommittee – August 12

Protocol Revision Subcommittee – August 13

Technical Advisory Committee – August 27

Public Utility Commission Open Meeting – August 14

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