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Texas PUC Details Process To Consider Potential ERCOT Market Changes: Co-optimization, Marginal Losses

Chair Will Seek Info On Implementation Costs To Market Participants (System Change Costs)

Chair Expects Legislature To Have "Broad Look" At Market During 2019 Session

July 13, 2018

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

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During yesterday's Texas PUC open meeting, Commissioners discussed a process to further consider two potential changes to the ERCOT market -- Real-Time Co-optimization (RTC) of Energy and Ancillary Services (AS), and use of marginal losses.

ERCOT and the IMM recently filed reports on the issues (see story here)

"I just wanted to kind of set out what I was thinking about how to move forward with those," PUC Chairman DeAnn Walker said, "because we don't want to leave a vacuum of no knowledge out there, because people fill that in with things that aren't always very good."

"It was my thought that, and I've always said this, that I wanted to get through the summer before we did anything to change things or do much about that, and so my thought was, to give the rest of the summer to the parties, or interested persons, to review the model, to work with the model -- I understand some people may want more information on the model, I'd like for if it's given to one party, it be filed in the project so everyone has it -- but to give a few months for people to work with that model, to get to know it and test it," Walker said

Walker suggested further considering the process at the August 9 open meeting, at which time Staff can present proposed questions to be considered as part of the Commission's evaluation

Walker noted that she already has identified one question to be addressed -- the cost of implementation to market participants for any system changes market participants themselves would need to undertake as a result of any market changes

"Right now, ERCOT is saying, I think, $40 million [for implementation of co-optimization], but we know that the other parties are going to have to change their systems, and I want to understand what the total cost is," Walker said. Walker noted that she has already been highlighting this as a question to be considered as stakeholders visit her about the issue. Walker noted that such market participant implementation costs was similarly a consideration under nodal.

Walker envisions at the August 9th open meeting delegating to Staff the ability to set forth a specific process on how to conduct the PUC's evaluation during the fall, such as a workshop, comment process, or combination thereof.

"I didn't want those studies sitting out there and people not knowing what our intention was," Walker said

Commissioner Arthur D'Andrea, discussing specifically marginal losses, said, "I can imagine a point where this gets closer and closer to the legislative session, where they take up marginal losses, and we might be in the middle of it. I'm not sure if we want to be having that fight at the same time."

D'Andrea said that it would be useful to provide data to the Legislature, "but if it really heats up over there, I'm not sure we should be having the fight here."

Walker agreed, but said that the Commission should collect as much information and data as it can for the Legislature to make an informed decision

"I think it's become clearer and clearer to me, the closer we get to January 2019, is the Legislature is going to have a broad look at what is going on here with the market, and so I think, even for the summer, if we don't make changes, it's good to collect information so that they have the best understanding they can have," Walker said

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