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Draft Texas Order Posted With Updated Conditions To Protect ERCOT Ratepayers From Costs Created By New Line Exporting Power to Eastern Interconnect

August 26, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

A draft Texas PUC order has been posted which would include revised conditions meant to protect ERCOT ratepayers from costs arising from the City of Garland's Rusk-to-Panola Double-Circuit 345-kV line, which is to facilitate the export, via DC Tie, of ERCOT power via the Southern Cross Transmission line (Docket 45624)

Commissioners discussed various protections necessary in considering a proposal for decision concerning a CCN for the project at last week's open meeting (click here for story)

Among other conditions, the draft order would prohibit the energization of the Garland project until ERCOT: (a) evaluates what additional ancillary services, if any, are necessary for the reliable interconnection of the Southern Cross DC tie; and (b) implements any necessary modifications to ancillary service procurement practices or procedures. It is appropriate to order ERCOT, in a separate project, to complete this task (noted below), the draft says.

Among other protections, including protections included in the original PFD, the new draft order would find that it is in the public interest, "for any additional associated costs that may arise because of the Garland project or the Southern Cross DC tie that would otherwise be borne by ERCOT ratepayers to instead be borne by Southern Cross Transmission or Rusk Interconnection."

"Such costs include, but are not limited to, transmission upgrade costs, ancillary services costs and the costs of negotiating and executing any coordination agreements with any independent system operator, regional transmission organization, or reliability coordinator," the draft order finds.

The new draft order would also find that it is in the public interest that, "any incremental transmission and ancillary services costs required in circler to support exports over the Southern Cross DC tie to be directly assigned to those exports."

The draft order would also provide that Southern Cross Transmission must pay for its use of the ERCOT grid, irrespective of whether it is importing or exporting power. "Rather than have the Southern Cross DC tie's exports treated as load and its imports treated as generation, all flows over the DC tie, whether import or export, should be accounted for in the assignment of transmission costs in ERCOT," the draft order states

"All flows across the Southern Cross DC tie, whether they be exports or imports, should be accounted for in ERCOT's transmission cost assignment in order to ensure that Southern Cross pays for its use of the ERCOT grid," the draft order states

The draft order would also require Southern Cross Transmission and Garland to back down exports if ERCOT determines such is necessary during an ERCOT energy emergency alert

The draft order does not explicitly address any requirement that the 2,100 MW DC tie operate below ERCOT's current most severe single contingency of 1,375 MW until ERCOT completes any required studies and implements any new standards and protocols

See the draft order here

Separately, a new project (46304) would be opened to address, and set the scope, of various ERCOT studies and tasks that must be completed before the line may be energized.

Under a draft order to open such project, apart from the ancillary services study and potential modifications noted above, one of the conditions required before energization is that ERCOT shall (a) study and determine whether some or all DC ties should be economically dispatched or whether implementation of a congestion management plan or special protection scheme would more reliably and cost-effectively manage congestion caused by DC tie flows, (b) implement any necessary revisions to its protocols and standards as appropriate

Another condition under the draft order is that ERCOT shall study price formation issues to determine whether any changes to pricing within the ERCOT market during emergencies are necessary and certify to the Commission when it has completed these actions.

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