PUCT's Pablos Proposes Expanding Operating Reserves as "Interim" Solution to Texas Resource Adequacy

Texas Public Utility Commissioner Rolando Pablos has suggested that the Commission explore expanding operating reserves as a "good interim solution" as the Commission considers long-term resource adequacy.

Specifically, in a memo, Pablos said that he, "would like to encourage the Commission to continue to take additional interim steps that could help build upon the positive momentum that has been created by our recent efforts."

"I am intrigued by the concept of increasing ERCOT's operating reserves as a way to ensure overall real-time reliability. This interim solution is attractive to me due to its potential reliability benefits and ease of implementation," Pablos said.

"Increasing operating reserves appears to be a quick and easy operation that can be achieved by making an administrative change to an existing ERCOT mechanism. An increase in operating reserves could send immediate price signals to generation investors and improve scarcity price formation. Most attractive is that the expansion of operating reserves could provide these benefits under our existing energy-only market or other potential market structures," Pablos said.

"I would recommend that the Commission explore this concept further as we continue to evaluate our long-term reliability options. On its face, it appears to be a good interim solution. This being said, however, I would ask the Commission to direct ERCOT to perform an expedited due-diligence analysis of the effects of an expansion of operating reserves. If my analysis of this concept's potential benefits and ease of implementation proves correct, I would then recommend that the Commission direct ERCOT to work with the stakeholders to increase operating reserves without delay," Pablos said.