Updated:
ERCOT Rotating Outages Expected To Last Into Tuesday

(Earlier:) ERCOT Institutes Rotating Outages Due To 30,000 MW Of Offline Generation

ERCOT Notes "Elevated Risk For Default" In Market In Coming Days

February 15, 2021

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Reporting by Paul Ring • ring@energychoicematters.com

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Update: 4:00 pm ET, 2/15

Due to the sheer amount of offline generation, outages are not rotating as would be done normally, due to the prioritization of emergency and other critical need loads

CenterPoint Energy Houston Electric said in a tweet that it is being required to reduce load at a higher level & longer than originally thought, which in turn is resulting in longer outages for customers. "Unfortunately, if you are a customer who is currently experiencing an outage, you should be prepared to be without power for at least the rest of the day," CenterPoint Energy Houston Electric said in a tweet



Updated, 12:05pm ET, Feb. 15

ERCOT said that the highest load shed during the event has been about 16,500 MW thus far

About 34,000 MW of generation was unavailable

ERCOT expects the need for rotating outages to last the rest of today (Feb. 15) and at least the first part of tomorrow (Feb. 16), if not all of Feb. 16

Earlier:

The Electric Reliability Council of Texas (ERCOT) entered emergency conditions and initiated rotating outages at 1:25 a.m. local time today, Feb. 15 (EEA Level 3)

About 10,500 MW of customer load was shed at the highest point, as of a news release issued around 4:30 a.m. local time

"Extreme weather conditions caused many generating units – across fuel types – to trip offline and become unavailable," ERCOT said

There was over 30,000 MW of generation forced off the system, ERCOT said in a news release issued around 4:30 a.m. local time. In other words, EEA conditions were instituted despite installed capacity well-exceeding demand, due to a shortage of available (not installed) generation

"Rotating outages will likely last throughout the morning and could be initiated until this weather emergency ends," ERCOT said

ERCOT also issued a market notice informing market participants of revisions to Total Potential Exposure (TPE)

TPE determines the amount of Financial Security a Counter-Party (CP) must provide for its market activity. On a daily basis, ERCOT monitors and calculates each CP’s TPE. Protocol Section 16.11.4.1(3) provides that ERCOT may modify TPE for CPs to adequately match financial risk.

"ERCOT has determined that, as a result of the significant weather event, the TPE calculation does not adequately match the financial risk of CPs registered with ERCOT," ERCOT said in the market notice

"Accordingly, this Market Notice serves to notify CPs that ERCOT is temporarily reducing the TPE for all CPs by 15% until further notice," ERCOT said in the market notice

"ERCOT is cognizant of the elevated risk for default in the ERCOT market in the upcoming days, and will not be making any further changes to CP credit exposure calculations during this event," ERCOT said in the market notice

"CPs should review the Available Credit Limit (ACL) Summary Report and TPE Summary Report for recalculated TPE amounts," ERCOT said in the market notice

ERCOT said in a separate market notice that it has received questions from Market Participants regarding high Market Clearing Prices for Capacity (MCPCs) in the Day-Ahead Market (DAM) for Ancillary Services (AS) for Operating Day (OD) February 15, 2021.

"To address these questions, ERCOT is issuing this Notice to explain the pricing dynamics that can lead to high MCPCs for AS, using as an example the MCPC for Responsive Reserve Service (RRS) for Hour Ending 10 for OD February 15, 2021," ERCOT said in the market notice

"As an initial matter, there were no DAM offers in excess of the applicable System-Wide Offer Cap (SWCAP) of $9,000/MWh for OD February 15, 2021. Per Protocol Section 4.5.1(9), the Day-Ahead MCPC for each hour for each AS is the Shadow Price for that AS for the hour, as determined by the DAM algorithm. This DAM algorithm takes into account lost opportunity costs associated with capacity providing RRS. Because the AS MCPC takes into account lost opportunity costs, it can exceed the SWCAP of $9,000/MW/hr," ERCOT said in the market notice

"For example, for Hour Ending 10 for OD February 15, 2021, the marginal Resource awarded RRS had an offer price of $5,790.96/MW/hr. As a result of being awarded RRS for Hour Ending 10, the capacity was precluded from being awarded offers for energy and Down Regulation Service (DRS) for that hour, resulting in lost opportunity costs for the Resource of $7,746.96/MW/hr and $8,281.46/MW/hr, respectively. Adding the marginal RRS offer price to the lost opportunity costs associated with the awarded capacity not providing energy or DRS resulted in an RRS MCPC for Hour Ending 10 of $21,819.38/MW/hr ($5,790.96 + $7,746.96 + $8,281.46)," ERCOT said in the market notice

"At this time, and subject to further review, ERCOT has not identified a need to correct DAM prices for OD February 15, 2021," ERCOT said in the market notice

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