Dive Brief:
- Staff of the Public Utility Commission of Texas on Thursday endorsed a reliability standard framework proposed by the state’s grid operator, and said they agree with the bulk of stakeholder comments in support of including multiple metrics in the standard.
- The Electric Reliability Council of Texas has recommended a standard defined by a three-part framework tied to probabilistic reliability metrics of duration, frequency and magnitude of outages. The standard is being developed at the direction of state lawmakers.
- Staff also acknowledged stakeholder concerns about the cost of a reliability metric and recommended the commission direct ERCOT to estimate the “anticipated cost of meeting the various reliability standards and provide sensitivity analysis.”
Dive Insight:
Several parties filed comments earlier this month recommending the PUCT adopt a reliability standard that will measure a range of metrics, and staff said it agreed.
“The ERCOT duration/frequency/magnitude framework will achieve this objective,” staff said, though it “reserves judgment on the specific reliability standard pending further policy review.”
Utilities, system operators and regulators often rely on a 1-in-10 reliability standard that requires planning margins sufficient to ensure load shedding occurs only once in a decade. Experts say this standard may no longer recognize the reality of today’s constrained electric grids, and requiring greater reliability means higher prices.
“Thorough analysis is required before moving away from the traditional industry standard of 0.1 LOLE,” staff said, referencing a metric known as Loss of Load Expectation. “Deviation from the industry standard, particularly to a lower threshold for the reliability standard, needs to have a reasoned justification.”
Following Winter Storm Uri in 2021, which resulted in widespread blackouts and led to the death of almost 250 people in the state, lawmakers directed the PUCT to take a series of actions to improve reliability including development of a reliability standard.
In January, the commission endorsed a new Performance Credit Mechanism as part of the market overhaul. That mechanism must be approved by lawmakers before it can be put in place. However, there are concerns the credit could add billions to consumer power bills without a significant boost to reliability.
Commission staff noted in its April 20 comments that in order for the PCM “to be effective, Staff believes that the reliability standard must be a mandated requirement once the final market design goes live.”
Other staff recommendations to the PUCT include:
- Directing ERCOT to conduct a full deliverability study after the market design is completed;
- Excluding a locational requirement or seasonal component from the reliability standard “as these should be captured within a robust region-wide, annual reliability standard;” and
- Establishing an initial schedule where the requirements to meet the reliability standard are reviewed annually.
Staff also said distributed energy resources and load resources “should be considered within the reliability standard analysis,” and recommended ERCOT and stakeholders “continue to work to identify any improvements that are needed to consider these resources more accurately within the model.”
