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Texas PUC Leaning Toward Removing RUC, RMR From ORDC For This Summer, Holds Action Due To Concern With Impact On REPs

February 15, 2018

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

This story was first published on February 15, with an alert to our email alert subscribers

During today's open meeting, a majority of Texas PUC Commissioners indicated that they were leaning towards adopting, in time for this summer, changes to the Operating Reserve Demand Curve (ORDC) to remove RUC and Reliability Must-Run (RMR) capacity from the ORDC

Addressing a project concerning ERCOT energy market price formation, Chairman DeAnn Walker did not support any big changes for this summer, but the one change she leaned toward resolving at this time was elimination of RUC and RMR capacity from the ORDC

Walker noted that, typically, there isn't much RUC capacity in the summer. Therefore the impact in price formation from such action may be minimal, but Walker said that the policy was a correct one and would send a correct signal to the market

Commissioner Arthur C. D'Andrea was strongest among the Commissioners in leaning towards removing RUC and RMR capacity from the ORDC, though he said if the retail electric providers screamed "bloody murder" he would consider the matter further

Commissioner Brandy Marty Marquez initially said that she would not adopt any changes for this summer, as she was concerned with the impact on customers. Marquez also noted that this is an opportunity to see how the ORDC performs, as prior summers have had excess capacity, and that adopting an ORDC change would make it more challenging to determine how the ORDC would have performed overall absent such change

Representatives for ARM and TEAM agreed that the removal of RUC from ORDC would not be as big of a change as others considered in the project, but there was still a general concern among REPs of adopting a policy change affecting retail contract pricing so close to the change's implementation date, without a longer lead time for the market to reflect such change.

If adopted for this summer, the RUC change could be implemented as soon as this July.

Commissioners did not take any action on the issue, and will review a backcast analysis performed by ERCOT on what the impact would have been in prior years to further consider concerns about the impact on pricing and the retail market. The item will be revisited at the March 8 open meeting

On other potential changes, Walker said that she was not open to LOLP changes at this time

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