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Texas Retail Provider Urges Texas PUC To Allow ADERs To Fulfill Deployments Under Large Load Demand Management Service
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In comments at the Texas PUC, Base Power Company has urged the PUC to avoid overly restrictive rules for the new statutorily required Large Load Demand Management Service (LLDMS), in order to allow innovative solutions such as the use of aggregated distributed energy resources (ADERs) to meet a directed deployment of LLDMS by a large load
See background on the proposed rules for LLDMS here.
As previously reported by ECM, a proposed rule provides 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 to alleviate an actual EEA event due to an extreme weather condition.
Base, "envisions a solution where a
large load could comply with a deployment request by partnering (in part or in full) with
aggregated distributed energy resources (ADERs) within the same load zone."
"Additionally, Base
sees benefit in this partnership extending to transmission emergency solutions, whereby ADER
capacity with congestion relieving benefits on identified constraints can assist in resolving a
significant risk of load shed," Base said
Base cited a recent study which Base said shows that "strategically sited" ADERs can resolve network constraints and unlock firm
withdrawal capacity for large loads
"Not only does this indicate that ADERs should be incorporated as an interconnection study tool in ERCOT's Batch process, but this benefit can and
should be leveraged for real-time transmission emergencies within the context of this rule," Base said
Addressing other matters of concern to REPs, Vistra and NRG Energy in separate comments addressed cost recovery for the new LLDMS
The proposal for publication would assign LLDMS costs on a load ratio share basis
Vistra said that LLDMS costs should be recovered on a fixed, "self-leveling" $/MWh-basis fee across the year, not on an event basis.
Vistra expressed concern that many large loads, not part of LLDMS, would curtail during LLDMS events (either under other statutory requirements or price responsiveness), and, as a result, "it is more likely that load ratio share allocation during a procurement period would over-allocate LLDMS costs to residential customers."
Vistra said that, "A more equitable and predictable cost recovery mechanism would be for ERCOT to establish a fixed, self-leveling $/MWh fee across the calendar year. For instance, ERCOT’s forecasted load for 2026 is 558,121,422 MWh. $54 million [the proposed rule's LLDMS budget] divided by that value yields $0.09675/MWh. ERCOT could assess that on every MWh, using the accumulated balance as the budget for the calendar year. If no procurements are made, the next year’s charge could drop to zero. If actual load exceeds the load forecast, the charge could drop to zero even before year-end. If load comes in below forecast, the procurement budget will simply continue to accumulate."
Vistra said, "This approach is also preferable for retail electric providers, because it is more predictable to plan for a known program fee than take on unhedgeable risk that ERCOT may make a spontaneous procurement/deployment".
Similarly, NRG also opposed an allocation of costs on a load ratio share basis, stating, "the Proposed Rule should establish a fund similar conceptually to the CRR Balancing Account, in order to make the charge more predictable for LSEs and thus better enable LSEs to enter hedging arrangements that cover those costs."
"Under NRG’s proposal, ERCOT would charge LSEs a modest flat fixed charge to accrue revenue in the fund over the course of the year until the fund reached the program budget. As ERCOT procured the LLDMS, the fund would be drawn down by ERCOT to issue payments to those awarded in the procurement. ERCOT would cease charging LSEs for the fund once it reached the budget," NRG said
The Independent Market Monitor for ERCOT, in comments to the PUC on LLDMS, recommended that the PUC terminate the Emergency Response Service (ERS) program in light of the creation of LLDMS, arguing that LLDMS is a more efficient service
The IMM said, "Upon implementation of the LLDMS, ERS will become redundant and should be discontinued."
"Both programs procure demand reductions to address the risk of an EEA event, but the LLDMS
offers a more efficient structure by procuring capacity in response to an identified reliability risk
rather than paying resources to remain available throughout predetermined seasons and time
periods," the IMM said
If ERS is maintained, the IMM said, "If LLDMS eligibility remains limited to loads above 75 MW, the ERS framework
should be revised to mirror the LLDMS framework for loads below that threshold. Ideally,
however, the Commission should expand LLDMS eligibility to include any load or aggregation
capable of providing at least 1 MW of demand reduction, creating a single service and a common
pool of prequalified participants."
The IMM also favors use of a sloped demand curve in procuring LLDMS
The IMM said, "The proposed rule requires all payments to be based on a single clearing price but does not
specify how ERCOT would determine that price. Under ERS, the clearing price and quantity
procured are functions of the budget allocated to a particular time period within a Standard
Contract Term. LLDMS procurement would operate differently because it would respond to a
modeled reliability risk associated with an anticipated emergency condition. Total annual
expenditures could therefore equal $0 if no qualifying conditions arise. However, the proposed
rule does not establish how much of the annual program budget ERCOT may spend in response
to any single emergency condition. Without additional parameters, ERCOT would appear to
procure the risk-based capacity target against a vertical demand curve, with the marginal
accepted offer setting the clearing price.
Instead, we recommend establishing a separate budget for each LLDMS procurement based on
the probabilistic need for the service and the value of lost load (VOLL). ERCOT could use its
probabilistic risk assessment to construct a sloped demand curve for each procurement."
The IMM said, "A sloped demand curve would limit unnecessary consumer costs and encourage more
competitive offers from prospective LLDMS providers. The curve would effectively cap the
price ERCOT is willing to pay for each volume of LLDMS capacity, making procurement more
efficient and less expensive than clearing a fixed quantity against a vertical demand curve. It
would also prevent any individual procurement, or series of procurements during a year, from
automatically exhausting the annual program budget. Finally, a sloped demand curve would limit
opportunities for providers to exercise market power through high-priced offers because ERCOT
would procure a given quantity only when the marginal reliability value of that capacity supports
the associated clearing price."
Project 58482
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IMM Favors End Of ERCOT ERS Program In Light Of LLDMS
September 8, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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