City of Seymour Asks Texas Commission to Address Congestion in ERCOT West Zone

The City of Seymour, Texas, which runs a municipal utility, has asked the Public Utility Commission of Texas to address congestion in the ERCOT West Load Zone.

In a letter to the PUCT, the city wrote as follows:

"The City of Seymour provides energy and related services to customers in West Texas. For purposes of ERCOT, the City's load is located in the ERCOT West Load Zone. Since the start of the ERCOT nodal market redesign in December 2010, congestion in the ERCOT West Load Zone has gone from a problem to a dangerous financial burden. Case in point, prior to the Nodal market beginning we paid no additional charges to take power from the point at which power trades in the forward markets (Trading Hub) to our load. From the beginning of the Nodal market through February of this year, this congestion has added 8% to the cost of the power at the Trading Hub. As difficult as that additional cost was, congestion cost has exploded to 62% since March with no end in sight. To give you an idea of this impact, congestion cost at this rate would add $1.2 million of costs on an annual basis to just 10 MW of load. We are writing to bring this matter to your immediate attention and to see if you can help support our efforts to cause ERCOT and/or the PUCT to address this matter.

"As a City that must secure and contract for its energy supplies, the current price spreads that exist between the West Load Zone and the West Trading Hub, there have been recent instances where the price spread has exceeded $500.00/MWh. This type of price spread is simply not consistent with a properly functioning zone/market, and we are very concerned that these issues are not being properly addressed by ERCOT and the PUCT.

"At the current time, loads in the West Load Zone are paying upwards of ten to one hundred times the amount of congestion as compared to other load zones within Texas. While the western area of the ERCOT grid may be less densely populated than other areas of Texas, all of the cooperatives and municipal systems within the West Load Zone are no less deserving of reliable and cost effective service.

"We are bringing this matter to your attention as we understand that customers within the South Load Zone last year were being negatively impacted by congestion in a similar manner and it is our understanding that this matter garnered the attention and support of parties to find a prompt solution to the issue/problem. We believe that customers in the West Load Zone are no less deserving of a solution to provide some relief to the current problem

"It is our belief that ERCOT and the Public Utilities Commission of Texas need to be more active in transmission planning efforts for the West Load Zone. We also do not believe that an adequate long term solution to the congestion problems have been identified or is in the works, and we respectfully submit that it is unfair for cooperatives and municipalities in the West Load Zone to be ignored about these issues. We respectfully submit that ERCOT and the PUCT should take some initiative to address these issues immediately as they did in the Southern part of our State, until the longer term solutions associated with transmission projects are identified and placed in service.