ERCOT to Address De-Energized Resource Node Pricing Deltas

"I think there at least arguably have been some violation of our rules," PUCT Commissioner Kenneth Anderson said during Friday's open meeting in discussing an issue identified by ERCOT regarding de-energized resource nodes.

ERCOT reported that, due to the application of current rules, there has been inconsistent pricing between Day-Ahead and Real-Time prices due to de-energized resource nodes getting assigned System Lambda in real-time.

ERCOT said that examples of the conditions leading to the deltas include circuit breakers that are closed in the Day-Ahead market but are open in Real-Time.

While ERCOT has taken some short-term measures to alleviate the deltas, such as through adding 609 electrical buses to 140 stations, ERCOT told the Commission that it is developing rules to submit via an urgent Nodal Protocol Revision Request to develop a more heuristic solution.

PUCT Chairman Barry Smitherman noted that the current Substantive Rules require market participants identifying any anomalies caused by the market rules to bring such anomalies to ERCOT and the Commission. Smitherman stressed that this obligation is particularly important in the first year of nodal implementation. Commissioner Donna Nelson agreed that it is not in market participants' best interest to not report such anomalies.

Anderson said that several of the transactions at issue appeared to lack "economic substance," and encouraged ERCOT to report any findings to the Commission's Enforcement Staff. ERCOT said it has already been working with Enforcement on this issue.