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Texas PUC Staff Recommend Modified Schedule To Address Any Future ERCOT Reliability Assessment Which May Recommend Market Changes To Cure Any Reported Deficiencies, To Provide PUC, Stakeholders With Ample Time For Review
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Staff of the Texas PUC have proposed a modification to the schedule for reviewing new triennial reliability standard assessments which must be developed by ERCOT, to provide the PUC and stakeholders with more time to review any recommended market changes proffered to address any deficiencies reported in the reliability standard assessment
Under PUC rule, beginning January 1, 2026, ERCOT must initiate an assessment
to determine whether the bulk power system for the ERCOT region is meeting the reliability
standard and is likely to continue to meet the reliability standard for the following three years.
Under 16 TAC § 25.508(c)(3), ERCOT must file the results of its assessment with the Commission, and if the assessment shows that any reviewed system fails to meet the reliability standard, ERCOT must provide the Commission with both a summary explanation of any identified deficiencies and a menu of proposed recommended market design changes, including a primary recommendation, to address the identified deficiencies.
In an April 10 filing, PUC Staff recommends that this step be broken into separate parts, "in order to allow the Commission and stakeholders ample time to evaluate results before evaluating market changes[.]"
Staff's recommended process is:
• Once ERCOT completes its work on the assessment, ERCOT will file the results at the Commission and report any identified deficiencies.
• Next, ERCOT should present these results at a meeting of the Technical Advisory Committee (TAC) or a TAC sponsored workshop.
• After this, ERCOT would then file ERCOT's recommendations for market design changes, including ERCOT's primary recommendation, at the Commission.
Staff stated, "This modification to the schedule most likely will further delay the end of the reliability standard assessment. However, Staff believes that this additional time for ERCOT stakeholders to review the results will provide valuable feedback and preparation before ERCOT files their final market design recommendations at the Commission."
Staff's filing addressed ERCOT's initial modeling assumptions for the triennial reliability standard assessment and a proposal from ERCOT to update the Cost of New Entry (CONE) value
Other notable recommendations from Staff on these matters include that, for the 2026 study, ERCOT should not move forward with a zonal analysis within the 2026 reliability standard assessment.
ERCOT had proposed using the multi-area reliability and economic dispatch modeling capability in the Strategic Energy Risk Valuation Model (SERVM) software to assess resource adequacy on a zonal basis that would account for transmission constraints between defined transmission zones. Staff said that, in the initial SERVM assumptions filing, ERCOT made it clear that any results from this analysis would be purely informational and not used to determine compliance with the reliability standard
Staff noted that a zonal and deliverability analysis is an item that the Commission has expressed interest in previously
However, Staff said that such analysis should not be included in the 2026 assessment
Staff stated, "This will be the first formal reliability standard assessment conducted in the ERCOT region, and any analysis or filings made by ERCOT in this project should focus on whether ERCOT is meeting the system-wide reliability standard."
Staff stressed as follows: "To be clear, Staff does not oppose continued work in this area by ERCOT and [the owner of the SERVM Software] and encourages further development that may be considered again for the 2029 reliability standard assessment."
Concerning the Cost of New Entry, Staff said that the PUC should direct ERCOT to conduct a "limited" update on the CONE value, with ERCOT continuing to use the frame combustion turbine as the selected reference technology.
The updated CONE value should be reported in real dollars, not nominal, Staff said
"The Commission should also direct Staff to plan to conduct a full CONE study in 2028 to better understand and consider a broader selection of reference technologies, and the expected market revenues each would receive, ahead of the 2029 reliability standard assessment," Staff said
Staff noted that while gas turbines are not expected to be widely available until 2030 or later, "Staff does not believe that current conditions warrant a change in approach," regarding the reference technology
"The inclusion of an updated CONE in the reliability standard assessment is to determine whether the market design is expected to produce the necessary price signal to incentivize sufficient generation in the long run. An assessment of the ERCOT energy-only market and any potential market design changes should not be based on short-term, abnormal conditions. Instead, it should assume that, in the long-run, things will stabilize, and conditions will return to normal until such time that sufficient evidence exists to indicate otherwise. Recent legislation has also emphasized the importance of building thermal dispatchable generation in the ERCOT region, so the CONE used in the reliability standard of the ERCOT region should reflect that," Staff said
Project 58777
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April 10, 2026
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Reporting by Paul Ring • ring@energychoicematters.com
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