Dive Brief:
- The Public Utility Commission of Texas (PUCT) extended to the summer of 2015 the deadline for the major Texas grid operator to determine if a 13.75% reserve margin is adequate to meet a serious load loss and if that is the right reliability standard.
- Recent power shortages increased concern about resource adequacy and the Electric Reliability Council of Texas (ERCOT), the grid operator, forecasted reserve margins would fall below the 13.75% target by 2018, raising regulators’ concern about sending power producers in the deregulated market the right price signals to drive growth of new generation.
- The PUCT reliability standard review was ordered after a push for a capacity market by Calpine Corp., NRG Energy Inc., and others floundered due to cost concerns and politics, and tweaks to ERCOT's energy-only market, including a scarcity pricing plan, were in place.
Dive Insight:
A recent study of ERCOT supply options by the Brattle Group found that demand response and efficiency measures have eased reserve margin and resource adequacy concerns.
Changing demand and the Texas wind installation boom created new interest in natural gas peaker plants, with the PUCT recently approving expenditures for gas facilities because they are so valuable as reserves and in balancing wind’s variability.
ERCOT will hold a reserve margin staff workshop Sept. 12, take stakeholder comments until Aug. 15, and complete a new reserve margin study by Dec. 1, with stakeholder comments on that study in February 2015 and another workshop by April, leading to next summer's report to the PUCT.
