The Public Utility Commission of Texas, in a Feb. 17 order, directed all transmission and distribution utilities (TDUs) in the ERCOT region to rotate customers who are properly subject to curtailment under ERCOT’s Emergency Energy Alert Level 3 (EEA3) in a manner that no such customer is subjected to an outage of more than 12 hours.
ERCOT on Feb. 15 declared an EEA3, which is the system operator’s highest state of emergency, due to exceptionally high electric demand exceeding supply, the commission said, adding that ERCOT has directed transmission operators in its region to curtail more than 10,000 MW of firm load.
ERCOT’s system is expected to remain in EEA3, and firm load shed is expected to continue, for a sustained period of time in light of the expected duration of the extreme weather event, the commission said.
The National Weather Service reported at 2:40 p.m. EST on Feb. 18, in part, that the prolonged stretch of frigid temperatures courtesy of a strong Arctic high pressure system continues to gradually loosen its icy grip over the Heartland. That said, abnormally cold temperatures will hang around through the weekend of Feb. 20, the website noted, adding that record cold daily maximum and minimum temperatures are likely to transpire in the South-Central U.S. through the morning of Feb. 20. The Plains and Mississippi Valley can expect daily temperature anomalies ranging between 20 and 30 degrees below normal, the website said, noting that the Ohio Valley will also remain in a deep freeze through Feb. 20 with high temperatures remaining below the freezing mark.
The Texas commission noted in its order that many customers who were subjected to load shed have remained in an outage status for days. “The expectation is that customers will be rotated through outages so that the burden is shared: that no customer’s outage will last so long as to precipitate endangerment and so that all customers shared this burden in as equitable a manner as circumstances will allow,” the commission said.
Under the “Nodal Operating Guides,” load shedding obligations are imposed on distribution service providers, the commission said, adding that of that type of entities, its jurisdiction for purposes of its Feb. 17 order extends to only such entities that meet the definition of transmission and distribution utility, which expressly does not include a municipally owned utility or an electric cooperative.
ERCOT to modify pricing models
As TransmissionHub reported, the commission on Feb. 15 said that it has directed ERCOT to ensure that firm load being shed in ERCOT’s EEA3 operating condition is accounted for in ERCOT’s scarcity pricing.
As noted in the related commission order, ERCOT informed the commission that energy prices across the system are clearing at less than $9,000, which is the current systemwide offer cap, and that at various times that day, energy prices across the system were as low as about $1,200.
Noting that energy prices should reflect scarcity of the supply, the commission said that if customer load is being shed, scarcity is at its maximum, and the market price for the energy needed to serve that load should also be at its highest.
The commission also said that ERCOT informed it that generator revenues are approaching the established peaker net margin (PNM) threshold, which is $315,000/MW-year. Once that threshold is achieved, the systemwide offer cap is set at the low systemwide offer cap (LCAP), which is “the greater of” either $2,000 per MWh and $2,000 per MW per hour, or 50 times the natural gas price index value determined by ERCOT, expressed in dollars per MWh and dollars per MW per hour, the commission said.
The commission said that due to exceptionally high natural gas prices at this time, if the LCAP is calculated as “50 times the natural gas price index value,” then it may exceed the high systemwide offer cap (HCAP) of $9,000 per MWh and $9,000 per MW per hour.
That outcome, the commission said, would be contrary to the purpose of the rule, which is to protect consumers from substantially high prices in years with substantial generator revenues. The commission added that it would make little sense to expose consumers to prices that are higher than the usual maximum price after a generator revenue threshold has been achieved.
The commission ordered that ERCOT is to suspend any use of the LCAP until after the commission’s regularly scheduled next open meeting and that ERCOT is to continue to use the HCAP as the systemwide offer cap until then.
Dan Woodfin, senior director of System Operations with ERCOT, in a Feb. 18 statement, said that the system operator is “allowing transmission owners to bring back any load they can related to this load shed event.”
While there is no additional load shed occurring at this time, a little more than 40,000 MW of generation remains on forced outage due to the winter weather event, ERCOT said.
Customers who remain without power likely fall into such categories as being in areas that are out due to ice storm damage on the distribution system, or in areas that were taken out of service due to the energy emergency load shed that need to be restored manually.
American Electric Power’s (AEP) AEP Texas, in its Feb. 18 update, noted that it restored electric service to about 150,000 customers, as more generation came online in ERCOT. At 10:15 a.m., on Feb. 18, about 124,000 customers remained without power, the company said.
CenterPoint Energy on Feb. 18 said that as of 2 p.m. CT, about 1.37 million customers have had their power restored, leaving less than 25,000 customers remaining without power.
Separately on Feb. 18, Oncor Electric Delivery Company said that as of 5:30 a.m., that day, there were about 150,000 remaining customers without power.
Louisiana-based Cleco noted on Feb. 18 that it has restored power to nearly 18,000 customers since the second winter storm moved across its service territory on Feb. 17. As of 3 p.m., on Feb. 18, about 25,000 customers were without power, the company said.
The Southwest Power Pool (SPP) on Feb. 18 noted that as of 9:30 a.m. Central time, it was no longer under an energy emergency alert, and that due to continuing high loads, as well as other implications of severe cold weather, it remains in a period of conservative operations until 10 p.m. Central time on Feb. 20 for its entire balancing authority area.