Regulatory Updates by Region

ERCOT Regulatory Highlights: May 2017

This month…

  • ERCOT Released the Final Summer Seasonal Assessment of Resource Adequacy and the Capacity, Demand, and Reserves Report.

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

  • The Commissioners rejected the acquisition of Oncor by NextEra.

  • ERCOT finalized its study on Multi-Interval Real-Time Markets and stakeholders began scoping the study for Real-Time Co-Optimization.

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

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

ERCOT and the PUC

ERCOT Releases the Final Summer SARA and Capacity, Demand, and Reserve Report

The Capacity, Demand, and Reserve Report was released May 2.  As a reminder, the report format has been changed, showing the first five years on one page, with years six through ten shown separately.  The first five years indicate a reserve margin above the reserve margin target of 13.75 percent.  Outlying years begin to dip below the target at 2025.  The 2018 summer peak demand forecast is 74,149 MW. Note the load forecast does not reflect recently revised load projections for Gulf Coast industrial loads or oil and gas exploration in the Permian Basin region.  That information will be incorporated into the next CDR in December. The 2018 summer planning reserve margin is projected to be 18.9 percent.  This is lower than the December 2016 projection of 20.2 percent, which is due to delays in forecasted commercial operation dates for several generation projects.  Greens Bayou unit 5 was moved from Reliability Must Run status to Mothball status.  In addition, winter wind peak average capacity contributions changed from 35 percent to 42 percent.  Finally the solar winter peak average capacity contribution almost doubled from 5 percent to 9.8 percent.

ERCOT also released the Summer Seasonal Assessment of Resource Adequacy (SARA), as well as the preliminary outlook for Fall.  ERCOT expects to have sufficient generation capacity to serve the forecasted peak demands this summer and fall.  ERCOT anticipates average weather conditions for the summer.  They believe that they have sufficient capacity if there is either extremely low wind output or extreme generation outages.  ERCOT forecasts a summer peak load of 72,934 MW and a total generation capacity of 81,685 MW. 

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 as well as reviewing the timing for when alternatives to an RMR agreement are considered.  After a workshop, and several iterations of comments, PUC staff released a proposed rule for publication and comment.  The proposed rule extends the required notice of suspension of operations from 90 to 150 days, with an RMR decision made within the first 60 days.  It also allows ERCOT to consider the economic value of lost load when deciding whether to consider an RMR or Must Run Alternative (MRA) contract, and each decision requires Board approval.  At the March 30 open meeting, the PUC approved the proposal for publication.  Comments are due May 15 and reply comments are due May 29.

Real-Time Co-Optimization and Multi-Interval Real-Time Market

At the end of 2013, the PUC opened Project No. 41837 to investigate potential changes to the market.  ERCOT and stakeholders determined, through market simulations, that the Multi-Interval Real-Time Market (MIRTM) did not produce significant cost savings and that the estimated cost are in excess of the measured benefits.  They did not support moving forward with MIRTM at this time.

The PUC asked stakeholders to proceed with studying the feasibility and benefits of Real-Time Co-Optimization. The Supply Analysis Working Group (SAWG) began to investigate an issues list.  Some of the issues include adjustment to the offer cap, creation of Ancillary Service Demand Curves in the Day-Ahead and Real-Time, and Locational Operating Reserve Demand Curve/Reserves.   

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.  A hearing was held February 21 – 23.   At the March 30 open meeting, all three commissioners expressed that they did not believe that the acquisition was in the public interest.  A final order to that effect was approved on April 13. 

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

Nodal Protocol Revision Request (NPRR) 815 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 percent.  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. 

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 6500 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, HB 787, and HB 788).  The only one of those voted out of committee is HB787.  There are also several bills related to Austin Energy in the House (HBs 1458, 1459, 1460, and 1461).  None of those bills have been voted out of committee.  In addition, HB 1685/SB 736 relates to the authority of the General Land Office to sell retail electric power.  SB736 has passed the Senate and is now tied up in a House committee awaiting a vote.  SB 735 is an electric omnibus bill for utilities and industrials and has also passed the Senate and is now in the House for consideration.  HB 1475 creates criminal penalties for certain unauthorized REP switches.   It remains in committee.  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 – May 3

Retail Market Subcommittee – May 2

Reliability and Operations Subcommittee – May 4

Commercial Operations Subcommittee – May 10

Protocol Revision Subcommittee – May 11

Technical Advisory Committee – May 25

ERCOT Board Meeting – June 13

Public Utility Commission Open Meeting – May 4 and 18

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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