Alliance for Retail Markets Says Two Proposed Load-Side Reliability Solutions In ERCOT Warrant Further Consideration
March 29, 2022 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
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In comments filed with the Texas PUC, the Alliance for Retail Markets said that two proposed load-side reliability solutions for the ERCOT market warrant further consideration
"While ARM is not advocating for any specific Phase II proposal at this time, ARM believes that a long-term load-side reliability solution could help ensure reliability and stability of the ERCOT market. To that end, two proposals filed in this project, the Load Serving Entity Reliability Obligation ('LSERO') proposal and STEC's Reliability Service proposal, warrant further consideration by the Commission. ARM strongly supports the Commission continuing its evaluation, development, and refinement of theses Phase II concepts, and each of our members have different issues they will be seeking to work through depending on the Phase II mechanism the Commission ultimately adopts," ARM said
ARM maintains that the following elements are important to consider to help ensure the continued health of the retail electric market:
• "Load-side reliability solutions could provide transparent and manageable costs for REPs. Such solutions should be designed to enable REPs to proactively cover supply sources for their anticipated load, which is similar in principle to the need for REPs to hedge their energy needs in today's market structure. This is a healthy activity that should be encouraged by the ERCOT wholesale market design.
• "The continued success of the retail electric market depends on the ability of REPs to know and manage costs. When costs are understood and risks are manageable, competition will drive the greatest value for customers.
• "Patchwork fixes (e.g., increased ancillary service procurement and Reliability Unit Commitment ('RUC') utilization) may shore up reliability in the shorter term but may create negative long-term reliability consequences and lead to higher prices for customers."
• "The sooner the Commission concludes its evaluation of Phase II market design proposals, the sooner REPs can plan for the future to help ensure the prices REPs offer customers are realistic and as stable as possible."