PUCT Intends to Address System Wide Offer Cap, Peaker Net Margin By End of Summer

The PUCT intends to act on Commissioner Kenneth Anderson's "Category Three" issues relating to resource adequacy by the end of the summer, Commissioners agreed at yesterday's open meeting.

Such issues, among other things, include potentially raising the System Wide Offer Cap, and eliminating the cap on Peaker Net Margin (PNM).

Anderson said he hopes to see draft proposals on these issues in the spring.

Citing the efficiency of the nodal market, and noting that it has already been tested under very extreme conditions this past summer, Anderson questioned whether the so-called "guardrails" around Peaker Net Margin are needed. At a minimum, Anderson suggested that the guardrail triggers should be raised significantly, such as raising the Peaker Net Margin trigger to $225,000 to $250,000 from the current $175,000, and raising the "low cap" to $1,000 if not $1,500.

Regarding the Peaker Net Margin (which lowers the offer cap to the low cap when exceeded), Anderson said that generators need to know that even if they have really great year that the Commission isn't going to penalize them.

Aside from the efficiency of the nodal market, Anderson also said that look-ahead Security Constrained Economic Dispatch may eliminate the need for the guardrails.

In other developments, ERCOT's Wholesale Market Subcommittee has recommended that the Reliability Unit Commitment offer floor be set at the System Wide Offer Cap. The associated NPRR (435) now moves to the Protocol Revision Subcommittee.

PUCT Chair Donna Nelson also announced that the Commission will develop a conservation messaging group to be in place prior to the summer, to offer an offensive rather than reactive strategy to encourage conservation. The goal is to find the sweet spot that engages customers but that does not result in message fatigue, Nelson said.