Regulatory Updates by Region

ERCOT Regulatory Highlights: February 2017

This month…

  • An NPRR was introduced to change the load participation limitations for Responsive Reserve Service.
  • The Emergency Response Service (ERS) proposed rule for adoption was filed by PUC staff. 
  • The Reliability Must Run (RMR) rulemaking continues, a workshop was held in December.
  • The testimony and reply testimony for the acquisition of Oncor by NextEra has been filed.
  • The Texas Legislature convened January 10, 2017.
  • Texas PUC Issues Final Report On Alternative Ratemaking.

ERCOT and the PUC

New NPRR to Revise the Limitation of Load Resources Providing Responsive Reserve Service (RRS)

A new NPRR filed would revise the current limit of 50 percent for Load Resources providing (RRS).  As allowed in the current protocols, the amount Load Resources are allowed to provide RRS is capped at 50%.  ERCOT requires a minimum amount of RRS to provide Primary Frequency Response.  The new language would allow any amount over the PFR requirement to be provided by load.  The NPRR is in the initial phase of review in the ERCOT Stakeholder process.

PUC Rulemaking on Emergency Response Service

The PUC continues to work on Project No. 45927 – Rulemaking Regarding Emergency Response Service (ERS).  The PUC staff released a proposed rule for adoption.  The rule includes language that would allow ERCOT to use ERS to forestall or mitigate involuntary load curtailment in the event of actual or anticipated local transmission congestion. It also includes language that would release ERS resources which are selected to provide Must Run Alternative (MRA) services to replace a Reliability Must Run (RMR) unit from their current contract at ERCOT.  The Commissioners did not discuss the rulemaking at the February open meeting, so it will likely be up for discussion in March.

Reliability Must Run (RMR) Issues

The PUC opened Project No. 46369 to consider changing the timeline for a Notice of Suspension of Operation/RMR review from 90 days to 180 days as well as reviewing the timing for when alternatives to an RMR agreement are considered.  After a workshop was held in December, PUC staff issued a second strawman rule and questions for comment.  The questions included limiting Must Run Alternative (MRA) resources to demand-side, prohibiting MRA participation from entities owning the RMR resource, and other possible limitations so MRA resources do not receive a windfall.  Comments were filed February 3.  Next steps should include a proposed rule for publication and comment.

PUC Consideration of NextEra Acquisition of Oncor

Oncor and NextEra Energy jointly filed for the regulatory approval of NextEra Energy’s acquisition of Oncor.  The initial filing was made on October 31, 2016, and the PUC has 180 days to rule on the transaction and determine if it is in the public interest.  The PUC approved the Preliminary Order in Docket No. 46238.  Initial and Reply testimony has been file.  A hearing is scheduled for February 21 – 24.  The deadline for decision is April 29, 2017. 

Texas Legislature

The 85th Session of the Texas Legislature began January 10, and ends 140 days later.   A number of electric industry bills have already been filed.  Several bills related to infrastructure hardening and protection have been filed (SB 83, HB 407, HB787, and HB788).  There are also several bills related to Austin Energy in the House (HBs 1458, 1459, 1460, and 1461).  In addition, HB1685/SB736 relates to the authority of the General Land Office to sell retail electric power, SB 735 is an electric omnibus bill for utilities and industrials, and HB 1475 creates criminal penalties for certain unauthorized REP switches. As a reminder, these bills must pass numerous steps including passage in House and Senate committees before being considered by each chamber.  The session ends on May 29th.

Texas PUC Issues Final Report On Alternative Ratemaking

The Public Utility Commission of Texas has provided to legislators a final report on alternative ratemaking mechanisms, that generally finds that a major revision is not needed to the rate-setting and design process used for the utilities located within ERCOT.  The Commission determined after review of a consultant’s study that existing streamlined methods of recovery are generally achieving their intended purposes.

Upcoming ERCOT and PUC Meetings:

Wholesale Market Subcommittee – February 1

Reliability and Operations Subcommittee – February 2

Retail Market Subcommittee – February 7

ERCOT Board Meeting – February 14

Commercial Operations Subcommittee – Cancelled

Protocol Revision Subcommittee – February 9

Technical Advisory Committee – February 23

Public Utility Commission Open Meeting – February 9

All data provided in this report is intended for general information use only.  Direct Energy does not guarantee the completeness or accuracy of this data, nor does Direct Energy assume any liability for any loss that may result from the reliance by any person or entity on this information.

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