ERCOT says it’s in good shape on gas-electric coordination

At this time the Electric Reliability Council of Texas (ERCOT) is not aware of any concerns, generally or specifically, related to electric-gas coordination issues for the upcoming winter of 2013-2014.

That was among the points made by ERCOT in a July 2 filing with the Federal Energy Regulatory Commission. The filing is part of the commission’s ongoing review of how to make sure natural gas is there, when needed, for power generators that are increasingly reliant on that historically volatile fuel.

On May 16, representatives from Independent System Operators (ISOs) and Regional Transmission Operators (RTOs) presented findings to FERC on the impact of electric-gas coordination issues in their respective regions during recent operational periods. On June 4, Commissioner Philip Moeller issued a series of follow up questions to the ISO/RTOs, and requested that responses be filed by July 5. ERCOT’s July 2 filing was its response to those questions.

Question 1:

Many ISO/RTOs have ongoing stakeholder processes looking at issues associated with gas-electric coordination. What are the specific recommendations emerging that can be implemented quickly (e.g., by January 2014), for example, without requiring expensive and time-consuming software changes, while stakeholders are evaluating longer-term solutions? Please explain whether these require tariff changes.

ERCOT Response:

The primary stakeholder group in the ERCOT region that looks at gas-electric coordination issues is the Texas Energy Reliability Council (TERC). Participants in this forum include Texas pipelines, gas distributors, gas producers, electric generators and ERCOT. TERC meets at least twice annually in addition to conference calls when there may be widespread gas supply challenges. Presently, there are no specific recommendations for changes in short- or long-term gas-electric coordination procedures in the ERCOT region that are being discussed or endorsed by TERC.

Question 2:

Some of the challenges associated with gas-electric coordination occur when gas-fired generators are asked to obtain gas supply and pipeline transportation capacity, or additional gas supply and pipeline transportation capacity, on short notice or outside of the normal day-ahead nomination cycles. Is ERCOT exploring ways to improve the day-ahead scheduling process to better reflect the expected real-time generation requirements? Are there “best practices” in this area that each ISO/RTO should be considering? ISO-NE recently implemented changes to its day-ahead schedule to better align the gas and electric trading days. Is ERCOT considering similar modification for bidding and clearing in the day-ahead market?

ERCOT Response:

Generators in the ERCOT region are required to provide their Current Operating Plans (COPs) for their generating units to ERCOT for a prospective seven-day period. COPs can be changed at any time before the operating hour. ERCOT executes its Day-Ahead Reliability Unit Commitment (DRUC) to commit additional units for the next day if needed to maintain reliability based on COPs effective at 2:30 pm CPT. This occurs, after the ERCOT Day-Ahead Market has cleared. Any DRUC commitments are communicated to the generators by 4:00 pm CPT. ERCOT also executes Hourly Reliability Unit Commitments (HRUC) for the remaining hours of the current day and next day. The HRUC process procures resources necessary to address system changes that occur after the DRUC process.

DRUC and HRUC processes utilize software that selects units on an economic basis relative to the system need, like for congestion relief or capacity. ERCOT ensures that units selected in DRUC or HRUC processes are able to meet the obligations by checking the COPs for those units. Regardless of the obligation (e.g. Day-Ahead, DRUC or HRUC), resources are responsible for managing the risk associated with those positions, including obtaining adequate gas supply.

In the ERCOT region the timing of the Day-Ahead market and subsequent reliability commitment processes relative to the timing of the relevant gas markets has not presented operational problems for ERCOT. This is arguably attributable to abundant gas supply and pipeline capacity in ERCOT and the ability of generators to change their offer curves to reflect any increased costs of gas that may result from having to obtain it on short notice. Since no significant problems exist in this regard, ERCOT is not considering changes to its day-ahead and reliability commitment processes.

Question 3:

What are the specific concerns that ERCOT has for this coming winter? Are there specific actions the commission can take to help address those concerns?

ERCOT Response:

ERCOT will issue a preliminary Seasonal Assessment of Resource Adequacy (SARA) on Sept. 1 and a final SARA on Nov. 1. These assessments will identify any resource adequacy concerns for the coming winter. In addition, TERC is expected to facilitate a conference call of its members in the October/November period to discuss any gas supply or pipeline concerns. At this time ERCOT is not aware of any concerns, generally or specifically related to electric-gas issues.

Question 4:

There has been some discussion about shifting the start of the gas operating day ahead of the electric morning ramp. Would such a change improve gas-electric coordination in ERCOT?

ERCOT Response:

Electric-gas coordination matters have not presented operational issues in the ERCOT region. Accordingly, such a change is not being considered in the region at this time. However, ERCOT said it will continue to monitor the electric-gas issues in all relevant forums and in concert with all relevant market participants and regulators to assess the impact of prospective market changes – e.g. demand changes and changes in gas supply or pipeline capacity.

Question 5:

Are gas system contingencies included in ERCOT’s system planning? If so, what are they, how were they selected and how often are they updated?

ERCOT Response:

ERCOT plans to conduct additional gas-electric studies as part of a transmission planning analysis starting in 2014. The objective is to understand pipeline and gas system modeling capabilities. This initiative is intended to realize the benefits of the relevant modeling data available in ERCOT system planning, with the intent being to assess the possibility for ERCOT to utilize that data to: identify and quantify single points of failure of the gas supply system that may impact the Bulk Electric System; and identify the probability of occurrence for common mode gas supply system interruptions in order to quantify the risk to the ERCOT system.

Question 6:

What specific steps is ERCOT taking to improve situational awareness of local conditions, such as planned or unplanned maintenance of natural gas pipelines? Are these steps on track to be implemented before the next winter heating season? What actions should FERC consider taking to facilitate improvements in this area?

ERCOT Response:

Generators are required to notify ERCOT of any fuel limitations that suppliers have indicated may limit the availability of generating units. This includes planned or unplanned maintenance of pipelines. These limits are considered by ERCOT in the DRUC and HRUC processes, which are reliability unit commitment processes conducted after the day-ahead market closes to ensure electric supply adequacy. Additionally, TERC’s pre-winter conference call will also discuss any planned pipeline maintenance that might have an effect on gas supply. ERCOT believes these provisions provide ERCOT with a sufficient level of situational awareness with respect to how gas pipeline outages may impact generation resource availability.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.