ERCOT board reviews summer 2012, supports grid improvements

AUSTIN, TX, Sept. 25, 2012 – Although the electric grid in Texas experienced new monthly peaks in June and July, overall peak electric demand in summer 2012 was lower than the records set the previous year. The Electric Reliability Council of Texas (ERCOT) Board of Directors received this update on summer electric use during its September meeting.

“It turns out that June was hotter than August this year, so that was different for us,” said ERCOT Board Chair Craven Crowell. “But, regardless of when it occurs, we know we will have hot weather and high electric demand every summer. We shouldn’t let our guard down. We should continue working on resource adequacy.”

During the blistering 2011 summer, ERCOT issued seven energy emergency alerts (EEAs) as temperatures and air conditioner use soared. In summer 2012, the grid has experienced no EEAs and only one control room watch, which occurred when operating reserves dropped below 2,500 megawatts (MW) after two large units tripped off-line. One MW is enough electricity to power about 200 Texas homes during periods of peak demand. Milder weather and fewer generation outages were key factors in keeping operating reserves available.

“As we were anticipating, we did have weather that was hotter than our 15-year average, but nothing like the outlier that we experienced last summer,” explained ERCOT CEO Trip Doggett.

One tool ERCOT added this summer to help address tight reserve situations when they do occur is a 30-minute Emergency Response Service (ERS) pilot. Doggett reported that, although the pilot brought in less than 20 MW of participation during its first contract period, it also attracted three new players to ERCOT’s demand response programs. One new participant is an aggregator that represents 284 residences as one ERS resource. Those homes will have 30 minutes to reduce electric use if directed to do so by ERCOT.

“This is the first time we have had an aggregation of residential customers participating, which is very good news,” said Doggett.

Transmission system challenges

ERCOT experienced four transmission watches this summer due to high demand and tight capacity in some areas. Increased oil and gas exploration and production activities, especially in West Texas, are straining some portions of the transmission grid. The board voted to endorse about $57 million in transmission improvements recommended by the Regional Planning Group to increase transmission capacity in the Eagle Ford Shale area. South Texas Electric Cooperative seeks to increase capacity in Dimmit, La Salle and McMullen to support future reliability of the system.

The board this month also received an update on transmission congestion in West Texas, where fast-growing electric use due to increased oil-related activities is straining the transmission system. Sending electric generation from less efficient units to serve the region’s growing electric demand through available transmission circuits is resulting in additional costs for electric users, according to Dan Jones, the Independent Market Monitor; John Dumas, director of Wholesale Market Operations; and Jeff Billo, manager of Transmission Planning.

Presenters explained the steps that are under way to address the issue, including long-term transmission improvements, temporary changes to the grid during off-peak months, and additional training to increase market participants’ understanding of the role of congestion revenue rights and how to access and use them to hedge against pricing risks.

The board also approved its meeting schedule for 2013 and an adjunct membership request for Smart Wire Grid, Inc., a transmission solution company that does not fit into other ERCOT member categories.

In executive session, Patricia Hoffman, Assistant Secretary for the U.S. Department of Energy, provided a briefing on cyber security.

Other September board meeting updates

CEO Report

In addition to his report on summer 2012, ERCOT CEO Trip Doggett provided several updates, which included:

·         ERCOT recently released the fall assessment of resource adequacy and the preliminary outlook for winter, which project sufficient resources for both upcoming seasons based on anticipated conditions.

·         Newly available non-binding forward hourly price projections have been reasonable during the first 30 minutes, and a recent logic update is helping address inaccuracies related to the wind forecast and generator data.

·         Fourteen ERCOT staff members recently presented innovative information at the Institute for Electrical and Electronics Engineers (IEEE) Power and Energy Society July conference in San Diego.

·         ERCOT recently received the Top Community Partner award for its volunteer efforts with Taylor Independent School District from Texas Afterschool Centers on Education, a Texas Education Agency program.

Independent Market Monitor Report

In addition to the regular monthly update on electric prices, energy use, heat rate, congestion costs, ancillary services and wind production, Beth Garza of Potomac Economics presented an overview of the recent State of the Market report.

Technical Advisory Committee (TAC) recommendations

•       The board modified TAC’s recommendations on 2013 competitive constraints, restoring previously defined constraints and directing TAC to study and develop alternatives.

•       TAC presented four unopposed revisions to Nodal Protocols (NPRRs), which the board approved:

o   NPRR 464, SASM Procurement Reporting

o   NPRR 470, Real-Time PTP Option Modeling Language Cleanup

o   NPRR 472, Implementation Clarifications for Consideration of DC Tie Lines and Outages in CCTs

o   NPRR 477, Exception for Block Load Transfers at Presidio


The next ERCOT board meeting is scheduled for Tuesday, Nov. 13.