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NRG, Vistra Each Propose Settlement Mechanisms For New Texas Large Load Demand Management Service, To Mitigate Impact On Retail Providers
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In comments to the Texas PUC on a new Large Load Demand Management Service (LLDMS), NRG Energy said that the PUC should consider an alternative settlement mechanism for LLDMS compared to what is used for typical settlement charges today, in order to minimize the cost impacts on retail electric providers (REPs)
As previously reported, PURA § 39.170(b) directs the PUC to require ERCOT to develop a reliability service to competitively procure demand reductions from large load customers with a demand of at least 75 megawatts (MW) to be deployed in the event of an anticipated emergency condition.
One potential option raised by PUC Staff for consideration is an "as-needed" LLDMS service, rather than a seasonal service. See background here
NRG said that, under an as-needed LLDMS, the alternative mechanism should spread out charges to REPs over an extended period, rather than assessing charges only during the time of LLDMS deployment
If LLDMS charges were assessed to REPs only during the time of deployment, NRG said that, "significant costs would be charged to LSEs and REPs over a matter of days and could ultimately be financially burdensome to customers[.]"
NRG said that one alternative would be to collect a fee in advance from REPs and LSEs over time, to create a funding pool for the LLDMS program
LLDMS providers would be compensated from this pool, with NRG noting that the charges funding the pool could be capped
"If the service is not deployed with sufficient frequency to deplete the fund, excess funds collected compared to a pre-determined fund maximum, equal to the annual program budget, could be refunded to loads in a similar way as the Balancing Account for Congestion Revenue Rights," NRG said
In separately filed comments, Vistra Corporate Services Company proposed for consideration a similar mechanism, which Vistra termed a "hybrid" which would create a consistent and "self-leveling" fee to fund a LLDMS procurement budget pool.
Vistra said, for illustrative purposes, the hybrid method could use a flat $/MWh charge to set a practical limit on the budget for the new LLDMS.
"The cost could be uplifted to all loads -- so if the fee were set at something like $0.05/MWh, then in a year like 2024 that saw 461.6 TWh of load, the program would have accrued ~$23 million that could be used towards an event-driven procurement; if no event occurred, then the fund would continue to accrue up to an aggregate limit," Vistra said, with the stated amounts used for illustrative purposes
Project 58482
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April 8, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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