Regulatory Updates by Region

ERCOT Regulatory Highlights: March 2017

This month…

  • ERCOT announces termination of the Reliability Must Run (RMR) contract with NRG.

  • ERCOT released the Spring Seasonal Assessment of Resource Adequacy (SARA).

  • Stakeholders continue to discuss the NPRR introduced to change the load participation limitations for Responsive Reserve Service (RRS).

  • The Emergency Response Service (ERS) proposed rule for adoption was filed by PUC staff. 

  • The RMR rulemaking continues. Next steps include a proposal for publication.

  • The hearing for the acquisition of Oncor by NextEra took place in February.

  • The 85th Session of the Texas Legislature continues and committees are meeting regularly.

ERCOT and the PUC

ERCOT Announces the Termination of the RMR Agreement with NRG

In late February, ERCOT issued a market notice indicating that the Greens Bayou Unit 5 (GB5) would not be needed for the remainder of the contract.  The contract includes a 90 day cancellation period, so the official termination of the contract will be May 29.  ERCOT re-evaluated the need for the unit following the passage of new market rules at ERCOT.  While they initially found that the unit be needed for June of this summer, it was based on the projected July operational status of the Colorado Bend II Generating Station.  That unit is expected to be operational a month earlier than originally projected, therefore GB5 is not needed for this summer.

ERCOT Released the Final Spring, and Preliminary Summer SARA

ERCOT released its final Seasonal Assessment of Resource Adequacy (SARA) for spring and a preliminary outlook for summer.  ERCOT includes multiple scenarios in its analysis of seasonal resource adequacy.  Even under the most extreme scenarios, generation reserves remained adequate to maintain system reliability.  ERCOT’s meteorologist indicates they expect a warmer than normal spring in the ERCOT region.  The preliminary summer outlook includes a peak load forecast of nearly 73.000 MW, which is higher than the summer peak demand record set last August.  ERCOT also developed a low wind output scenario for summer to further test the resource adequacy.  Under a few extreme conditions, ERCOT could enter into an Energy Emergency Alert. 

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 (PFR).  The new language would allow any amount over the PFR requirement to be provided by load.  The NPRR is being reviewed 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 RMR unit from their current contract at ERCOT.  The Commissioners may discuss the proposed rule one of the two open meetings 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.  Reply Comments were filed February 17.  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 held hearings in February on Docket No. 46238.  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 on May 29th.   As of this week, more than 4500 bills have been filed in the Texas Senate or House.  A number of electric industry bills have 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.   Committee meetings are well underway at the Capitol, and the last day to file a new bill is March 10.  As a reminder, these bills must pass numerous steps including passage in House and Senate committees before being considered by each chamber.  

Upcoming ERCOT and PUC Meetings:

Wholesale Market Subcommittee – March 1

Reliability and Operations Subcommittee – March 2

Commercial Operations Subcommittee – March 8

Protocol Revision Subcommittee – March 9

Technical Advisory Committee – March 23

Retail Market Subcommittee – March 28

ERCOT Board Meeting – April 4

Public Utility Commission Open Meeting – March 9 and 30

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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