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ERCOT Ends Statewide Emergency, Further Adjusts Credit Metrics
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February
4, 2011
ERCOT ended statewide emergency conditions yesterday, however, local generation and transmission issues in the Rio Grande Valley required rolling outages for that area for a brief period overnight, with ERCOT warning such outages could continue Friday morning.
ERCOT said that there is an increased risk that it would implement rolling outages in the Valley area as early as 6 a.m. local time due to transmission import limitations to the Valley as well as local generation supply uncertainties. As of 8:30 a.m. local time, no outages had been called
Due to this week's unusual activity, ERCOT has changed the "uth" percentile used
to determine exposure for Point-
Additionally, certain portions of the credit calculations in the ERCOT Protocols use recent history to collateralize for forward risk. "While this generally produces reasonable results, underlying assumptions must be reviewed during periods of unusual activity," ERCOT said in a market notice.
The Protocols allow ERCOT flexibility to adjust exposure calculations to address unusual situations as they arise. "ERCOT does not consider activity like what was experienced February 3, 2011, as a good estimate of activity for the next weeks or months; therefore, ERCOT has made or will make the following adjustments to mitigate the impact of the unusual activity experienced so far this week while collateralizing for a) ERCOT's best estimate of exposure that has been incurred and b) maintaining reasonable coverage for forward risk."
Based on its review, ERCOT has or will make the following adjustments:
1) ERCOT has applied a factor of 0.05 to the Not Completed (Forward Days) section of the Aggregate Incremental Liability (AIL) component effective from February 3, 2011, through February 9, 2011, and
2) As previously reported, ERCOT will exclude Operating Day February 2, 2011, from the Average Daily Transaction Extrapolated (ADTE) calculated on February 18, 2011, before determining the Highest ADTE
3) ERCOT will freeze the Daily Average Liability Extrapolated (DALE) calculation on Friday, February 4, 2011, and will use this as the DALE through February 9, 2011. After February 9, ERCOT will calculate the DALE excluding the DAM runs for Operating Days February 3 and 4 from the DALE.
Additionally, ERCOT normally requires collateral to be posted by noon for it to be available for the next morning's Day Ahead Market run. Yesterday, however, ERCOT extended the deadline to 16:00 (for yesterday only at this time).
Focused on maintaining grid integrity until emergency conditions passed, ERCOT and
regulators have only preliminarily begun a post-
However, preliminarily, ERCOT said that there was no pattern to the generation outages, either geographically, or in terms of ownership. Problems, which forced online units to trip offline or prevented offline units from responding to dispatch instructions, were also diverse, such as problems with control systems, plant transmitters, transducers, and valves, due to the extreme cold.
During yesterday 's PUCT open meeting, Commissioner Kenneth Anderson said that, anecdotally, there is evidence that the failures should not have happened.
Anderson said that the big issue was not ERCOT, but rather with the generation fleet, calling the over 50 units which were offline, "unprecedented."
Additionally, Anderson said that a review of whether current responsive reserves are sufficient will need to be conducted.
Anderson praised ERCOT operators, describing the various emergency conditions as so dire that they should have been unrecoverable, but ERCOT maintained the integrity of the grid.
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