Texas Staff Files Draft Final Rule to Replace, Expand EILS

Staff of the Public Utility Commission of Texas has filed a draft proposal for adoption to adopt new Subst. R. 25.507 regarding ERCOT Emergency Response Service (ERS), a replacement of the current Emergency Interruptible Load Service, and which would expand the resources eligible to provide the service.

The proposed final rule would allow a load or aggregation of loads, or a dispatchable generator that is not registered with ERCOT as a Generation Resource or an aggregation of such generators, to provide Emergency Response Service.

The draft declines to set an arbitrary limitation on the amount of distributed generation that may participate in the program.

The proposed rule removes much of the prescriptive details included in the current EILS rule, including the stated requirement for a 10-minute response time, to give ERCOT flexibility in developing ERS products.

The draft states that the suggestion that ERCOT establish classes of ERS participants with differing response times appears to have merit, and could encourage participation in the program by more load resources than currently participate. The draft would encourage ERCOT to expeditiously explore the feasibility and usefulness of implementing this feature.

The proposed rule retains a $50 million cap on ERS expenditures annually. The draft states that the Commission is willing to revisit this cap as the ERS program grows.

While the draft final rule retains the pay-as-bid nature of ERS, the draft would add language explicitly authorizing ERCOT to implement a market clearing price mechanism for ERS if ERCOT deems appropriate.

"The concept of establishing a market clearing price mechanism would appear to have the potential for solving some problems that exist in establishing prices for the service, and the commission encourages ERCOT staff to expeditiously explore the feasibility of implementing such a mechanism," the draft states.

The final rule would decline to adopt, in the rule, a specific mechanism to mitigate price impacts in the energy market from ERS deployments.

"The commission notes that discussions currently are taking place in the Reliability Deployments Task Force of the Wholesale Markets Subcommittee regarding a global approach to mitigating the pricing impact of all reliability measures taken by ERCOT during energy emergencies, including not only ERS, but other services such as Load Resources, Non-Spinning Reserve Service, and Reliability Unit Commitments. The commission believes that that forum is the correct venue to address any pricing impacts of the deployment of ERS, rather than to attempt to codify a solution in this rule," the draft states.