PUCT Directs ERCOT to Study Potential Adjustments to Offer Curves When Non-Spin, RUC Deployed

The PUCT has directed ERCOT to examine potential adjustments to the offer curves when Non-Spin or Reliability Unit Commitment is deployed for reliability purposes, to preserve scarcity pricing signals.

Describing the potential solutions as an intermediate step to address scarcity pricing, outgoing PUCT Chairman Barry Smitherman directed ERCOT Friday to study mechanisms which take into consideration the intrusion of Non-Spin and RUC into the offer curves, and whether adjustments are needed in such situations, though Smitherman was hesitant to describe the mechanism as adjusting the curve

Smitherman noted that any such adjustment mechanism is controversial, but said that it is also consistent with the goal of not allowing reliability deployment to affect market signals.

In the short term, the Commission directed ERCOT to continue to study the greater use of Non-Spin instead of RUC. ERCOT reported that it does not believe a Protocol revision is required for this change, but did counsel the Commission against any immediate change, stating that it needed to further examine the issue, especially as its preliminary analysis has found that much of the RUC is being used for voltage control and congestion, and thus might not be able to be displaced by Non-Spin.

ERCOT said that it could report back with specific proposals to increase use of Non-Spin within two weeks.

ERCOT also said that it would examine demand response solutions as well as potential new ancillary service products, such as a product for quick start generation.