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Texas PUC Staff Propose As-Needed Basis For Large Load Demand Response Program, Recommend Offer & Budget Cap
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Staff of the Texas PUC have filed a draft proposal for publication to implement, for the ERCOT market, a Large Load Demand Management Service (LLDMS) to competitively procure demand reductions from large load customers
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
Staff proposes that ERCOT would be authorized to procure LLDMS on an "as needed" basis to help prevent an anticipated EEA event due to an extreme weather condition or alleviate an actual EEA event due to an extreme weather condition.
This "as needed" design for LLDMS contrasts to a seasonal program
Staff also asked for comment on whether ERCOT should be allowed to deploy LLDMS for transmission emergencies.
Under LLDMS, a qualified scheduling entity (QSE) would submit an offer to ERCOT on behalf of a large load customer that is pre-qualified to participate in LLDMS. The offer must be expressed in dollars per megawatt hour units
Staff proposes that, among other criteria, ERCOT must reject an offer to provide LLDMS that is greater than $5,000 per megawatt hour, or an offer that is "unreasonable".
To be eligible for the program, a large load customer must be an entity with a total non-coincident peak demand at a single site that is equal to or greater than 75 megawatts (MW).
To participate in LLDMS, a large load customer must offer at least 1 MW of demand reduction
A large load customer participating in the following services or programs in the ERCOT market would not be eligible to participate in LLDMS:
(A) a different reliability service;
(B) an ancillary service;
(C) a program administered by ERCOT that compensates for curtailment;
(D) a demand response program in which the large load customer curtails in response to the wholesale price of electricity;
(E) an ERCOT-procured contract for capacity;
(F) a net metering arrangement that imposes a curtailment obligation on the large load customer under PURA §39.169;
(G) firming service under PURA §39.1592 and §25.65 of this title (relating to Firming Program Requirements for Electric Generation Facilities in the ERCOT Region);
(H) a demand response product, program, or service administered by a transmission and distribution service provider; or
(I) the Voluntary Early Curtailment Load program, as defined in ERCOT protocols, or its successor program.
ERCOT would deploy a large load customer as necessary to help maintain reliability during an EEA event due to an extreme weather condition throughout the LLDMS obligation period
Under the program, Staff proposes that a QSE representing a large load customer that deploys consistent with ERCOT instructions during the LLDMS obligation period may receive payment based on 100% of the market clearing price associated with the deployed capacity.
As previously reported, the ERCOT IMM has recommended a pay-as-bid compensation mechanic for LLDMS, rather than compensation based on market clearing price
In Staff's draft, a QSE representing a large load customer that is not instructed by ERCOT to deploy but which is subject to availability verification during the LLDMS obligation period may receive a payment based on 25% of the market clearing price
Concerning compensation for available, but not deployed, resources, Staff asks for comment on whether a large load customer that is available but not ultimately instructed to deploy during the LLDMS obligation period should be compensated some percentage of the market clearing price for the large load customer’s availability to reduce demand during the LLDMS obligation period
Staff recommended a maximum budget of $54 million in a calendar year for LLDMS, and asked for comment on the appropriate budget for the LLDMS program
Under the draft, ERCOT must provide at least 24-hour notice to a QSE that a large load customer represented by the QSE may be deployed to reduce its load during the LLDMS obligation period.
Staff proposes that ERCOT must charge each load serving entity for LLDMS deployment costs based upon the LSE’s load ratio share during the procurement period.
Docket 58482
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July 27, 2026
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Reporting by Paul Ring • ring@energychoicematters.com
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