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Texas PUC Weighs "Informational", Multiple Reserve Margin Measurements, Commission In No "Hurry" Given Healthy Margins

June 19, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

Texas Public Utility Commissioners yesterday discussed next steps regarding their review of the reserve margin, with Chairman Donna Nelson stating that with ERCOT's "healthy" reserve margins, there is no "hurry" to resolve the issue.

Nelson said that while she has not made any decision, given that the Commission does not want to set a mandatory requirement, Nelson said that the Commission should not set a standard, and that she is leaning towards publishing an "informational" reserve margin measurement, such as the market equilibrium reserve margin.

Commissioner Kenneth Anderson highlighted one of Staff's proposals to publish more than one reserve margin standard, such as both the market equilibrium and economic reserve margin. Commissioner Brandy Marty Marquez also considered the multiple reserve margin approach as, "clever."

Anderson further said that as the Commission considers the issue, it should weigh whether the ERCOT Capacity, Demand, and Reserves report horizon should be shortened from the current 10-year horizon, as projections beyond four or five years amount to a, "WAG" [wild guess]. Anderson noted that the current 10-year horizon is set in rule.

Nelson suggested moving forward with a workshop, but Commissioners elected to take additional time to consider the issues before formally establishing a workshop process.

As many of the reserve margin standards rely on Value of Lost Load, Nelson said that she was awaiting the next update on full co-optimization from the ERCOT stakeholders.

Nelson said that in a healthy energy-only market, all resources must compete on a level playing field, including demand response, and expressed concerns with expansion of demand response capacity programs at ERCOT, such as ERS.

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