Power outages cost Texas consumers $35,685 for every megawatt-hour of load that goes unserved, according to a Brattle analysis the Public Utility Commission of Texas adopted at its Aug. 29 open meeting.
The analysis calculated the cost of unserved load, known as the Value of Lost Load, “a proxy for the costs and impacts experienced by customers due to a power outage,” the state’s grid operator said in a topic brief published Wednesday. It is “an important value to weigh the benefits of future investments to improve grid reliability.”
The VOLL figure is based on a survey of residential, commercial and large industrial customers that the PUCT commissioned in March, as part of the state’s work to develop an electric reliability standard.
The metric “will be used in planning studies as well as the performance credit mechanism analysis,” Brattle Principal Sanem Sergici, an author of the VOLL study, said in an email. Texas lawmakers approved the PCM last year, allowing incentives for power generators in the Electric Reliability Council of Texas market to be available during times of grid stress.
PUCT staff performed an analysis of Brattle’s survey and came up with a lower figure, recommending the VOLL be set at $30,000/MWh.
“The challenge is that [the] small C&I class has small usage but disproportionately high VOLL,” Sergici said. “Staff essentially wanted to put a lower weight on the small C&I class due to the extreme value, and the prior lit review results.”
PUCT commissioners, however, said they were comfortable with Brattle’s higher figure.
“My understanding from staff feedback is the difference between 35 and 30 is not a huge impact and as a starting point, $35,000 would be good,” Commissioner Lori Cobos said at the Aug. 29 meeting. “As we move forward, we can continue to review and adjust as necessary. We have to start somewhere.”
A change to the VOLL estimate is not likely to happen any time soon, Sergici said. “This was a very robust effort, but required so much coordination, since ERCOT does not have access to individual customers,” she said.
